Shanghai's economy continued to grow strongly in the first nine months of this year. But foreign investment is slowing amid a nationwide backlash against market opening and uncertainty over the city's business environment due to a widening corruption scandal. The gross domestic product rose 12.4 per cent year on year in the first three quarters of the year, figures released yesterday showed, slowing marginally from the 12.6 per cent rise in the first half but still stronger than the 11.1 per cent recorded for all of last year. Foreign direct investment in Shanghai rose 1.5 per cent to US$5.7 billion in the first nine months and contracted foreign investment, an indicator of the future trend, rose 1.1 per cent to US$10.8 billion. Shanghai's foreign investment grew a stronger 4.7 per cent last year, while contracted investment surged 18.3 per cent. It was too soon to tell if the sacking of Shanghai party secretary Chen Liangyu for corruption late last month would result in policy changes that could make the business environment less attractive for foreign companies. But the leadership changes increased uncertainty, business executives and foreign government officials said. At the same time, the mainland appears less welcoming to foreign investment. The most prominent examples have been outright rejections or delays faced by foreign investors trying to buy stakes in mainland companies. The backlash against overseas investment has been manifested in Shanghai in criticism of foreign lawyers by the local bar association and officials expressing concern about foreign dominance of the local retail market. Policies made at the central government level, such as limits on foreign investment in property and planned rules for foreign retailers, will have an impact on the city. 'I see it as a reflection of success,' said Peter Corne, a lawyer and chairman of the EU chamber's legal working group. 'It arises out of a natural concern from market opening because foreign enterprises are able to acquire enterprises faster and in a greater number of industries than they ever have before.' The changes have not soured foreign investors yet. Retailer Toys 'R' Us plans to open its first mainland store in Shanghai next month.