City's GDP grows 10.3% in 1H

By Wang Yanlin  |   2008-7-17  |     NEWSPAPER EDITION

SHANGHAI'S gross domestic product rose 10.3 percent in the first half of this year to 657.4 billion yuan (US$96.4 billion), down 2.7 percentage points from the same period last year, figures revealed yesterday.

The city's economy managed to expand stably, but growth has slowed because of natural disasters, rising energy and raw material costs and increasing producer prices, said a statement on the Website of Shanghai Municipality yesterday.

Shanghai's GDP grew 11.5 percent in the first quarter, 1.1 percentage points lower than a year earlier and starting a moderate slowdown, in line with the national economy.

The National Bureau of Statistics is set to announce the national economic data today. Many economists estimate that China's GDP will ease to around 10.5 percent in the first half.

"Shanghai faces less pressure compared to other areas such as Guangdong Province and Zhejiang Province, where export-oriented or small and medium enterprises dominate. They are suffering more from the yuan's fast appreciation and the rising labor costs," said Li Maoyu, an analyst with Changjiang Securities Co.

The city's industrial output kept a double-digit growth in the first half, led by six key sectors - electronics, vehicles, fine steel, petrochemical processing, equipment and biomedicine, which by preliminary calculation increased 18.9 percent, 9.2 percent, 9.3 percent, 23.9 percent, 21.5 percent and 17.9 percent respectively.

Retail sales in the city also expanded more than 16 percent in the first half, with industrial exports gaining around 18 percent from a year earlier.

Zhou Minhao, secretary general of Shanghai Economic Committee, said the city would have to meet two major challenges in the second half. One would be shrinking company profit margins because of even higher producer prices. The other would be less industrial investment.