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Shanghai GDP expands 7% in H1

By Wang Yanlin | July 16, 2015, Thursday | Online Edition

SHANGHAI'S gross domestic product expanded 7 percent in the first half of the year, picking up from the increase of 6.6 percent in the first three months and catching up with the national pace for the first time in seven years, the Shanghai Statistics Bureau said today.

The bureau did not give the exact growth figure for the second quarter, but it must have been above the nation's average of 7 percent.

The economic output in the city amounted to 1.18 trillion yuan (US$190.3 billion) in the first six months, with the service sector gaining 10.2 percent and producing 67.1 percent of the total output, compared with 67 percent in the first quarter and last year's 64.8 percent.

"Shanghai has seen signs of a solid rebound," said Tang Huihao, chief economist at the bureau. "With the city taking the initiative of adapting itself to the new normal, we have seen an economic growth with better structure and higher quality."

Shanghai was among the first to enter new normal, a state of slower growth speed but of more sustainability. The city's GDP rate has trailed the national level ever since 2008. But this year may mark a reverse thanks to the reform efforts and the service sector.

Finance, part of the service sector, has become a major industry to drive ahead the city's growth. Output from various financial services and products jumped 30.1 percent in the January-June period, partly based on an active stock market.

The manufacturing sector edged up 1.9 percent during the period, also better than the rise of 1.6 percent in the first three months, while the agriculture lost 8.1 percent

"Shanghai is likely experiencing a transition after deepening industrial restructuring," said Lian Ping, chief economist at Bank of Communications. "People are more confident towards the future due to various reforms taken out in the city, especially some milestone financial reforms taking place in the pilot free trade zone and the initiative of building a global center of science and innovation.

Shanghai's gross domestic product expanded 7 percent last year, a sharp slowdown from the pace of 7.7 percent in 2013. The city government did not set a target for this year as it used to do.

The local statistics bureau also said Shanghai's retail sales rose 8.2 percent in the first half, improving from the pace of 7.8 percent in the first quarter.

Fixed-asset investment gained 8.4 percent during the period, 5.2 percentage points faster than that in the first three months. Capital flowing into the property sector still jumped 15.8 percent, while investment in urban infrastructure construction also added15.8 percent.

Trade contracted 3.4 percent to 1.32 trillion yuan in the first half, weakening further from the drop of 1.6 percent in the first quarter as both exports and imports deterioated.

Foreign direct investment fell 7.1 percent during the period due to regulation factors related to the pilot free trade zone. It was set to increase as contracted investment surged by 1.3 times, indicating more funds in the pipeline.

The Consumer Price Index, the main gauge of inflation, increased 2.4 percent, almost flat with the rate of 2.3 percent in the January-March period.

Shanghai urban residents earned an average 25, 279 yuan in the first six month, up 7.9 percent on an annual basis.

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