Shanghai’s economy turns in disappointing picture
Print Edition
SHANGHAI’S industrial production growth slowed last month while inflation accelerated, painting a disappointing picture of the city’s economy although investment remained stable, according to data from the Shanghai Statistics Bureau yesterday.
Industrial production edged up 1.6 percent from a year earlier in July, compared to the pace of 7.1 percent in June as output in oil refining, steel and information technology all dropped.
“The manufacturing sector seems to lose traction all of a sudden,” said Li Maoyu, an analyst at Changjiang Securities Co. “It is a result of the city’s efforts on economic restructuring, as well as a reflection of the weak property sector that leads to less demand for goods like steel.”
The production of fine steel fell 4.5 percent in July, while oil refining lost 6.5 percent and information technology shed 3.8 percent.
Meanwhile, the Consumer Price Index, the main gauge of inflation, rose 3 percent last month, compared to June’s 2.6 percent, and higher than the national average of 2.3 percent.
“It signals that Shanghai should be cautious against the potential risks of inflation,” said Xue Jun, an analyst at CITIC Securities Co. “More efforts should be made to stabilize the growth.”
Fixed-asset investment in Shanghai rose 4 percent in the first seven months, largely in line with the pace of 3.8 percent in the first half, the bureau said.
Shanghai’s gross domestic product grew 7.2 percent from a year earlier in the second quarter, picking up from the pace of 7 percent in the first three months of this year, the bureau said last month.
Yan Jun, chief economist at the bureau, said earlier that Shanghai’s growth has been advancing amid stabilization. He was optimistic about the prospects for the city’s economy due to opportunities including the construction of the pilot free trade zone and the planned BRICS new development bank in Shanghai.
China’s GDP grew 7.5 percent in the second quarter, also quicker than the pace of 7.4 percent in the first three months, according to the National Bureau of Statistics.
But the country’s activity data in July, including industrial production, fixed-asset investment, retail sales and imports, all pointed to weakening growth momentum.
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