FOR years, preparation for World Expo 2010 dominated the development strategies and prosperity dreams of Shanghai. Now that the heady spectacle has passed into history, some are wondering if the city isn't finding itself a bit off-stride.

The question is an interesting one: Whither Shanghai?

There's no doubt that the city remains among the most vibrant in the nation, if not the world. But in the post-Expo era, the city needs to redefine itself and chart its course through the shifting sands of a rapidly changing and highly competitive environment.

Last year, even with Expo in full swing, the city's gross domestic product expanded at a slower pace than China as a whole for the third year running.

Economic growth in the city trailed many poorer inland provinces that provided the cheap labor for Shanghai's export-driven industries and are now trying to emulate the city's success story.

Shanghai GDP last year expanded 9.9 percent from 2009 to 1.68 trillion yuan (US$256 billion), while the national growth was 10.3 percent.

Cai Xuchu, chief economist at the Shanghai Statistics Bureau, said what appears to be a slower growth rate is merely a reflection of the city's high base.

"Shanghai was expanding at double-digit rates for more than a decade, until 2009," Cai said. "It is almost impossible to repeat that miracle. What Shanghai needs to focus on right now is economic restructuring. An exorbitant growth speed is no longer the most important thing."

Other provinces

In 2010, Shanghai's economy was the slowest growing among the top 10 provincial-level economies in China, as provinces in central and west China revved up their development engines.

Sichuan Province in the southwest headed the growth charts with an expansion of 15.2 percent, while the 4.55 trillion yuan value of goods and services in the southern province of Guangdong was triple Shanghai's.

It may be fussy to look at cold figures and try to draw conclusions about Shanghai's situation, but the numbers do point to traces of weakening growth.

What could that tell us?

For one thing, competition for cheap migrant labor may intensify between wealthy eastern seaboard cities like Shanghai and interior areas of the country with faster growth rates.

Spurred by government incentives and lower production costs, many companies are moving their manufacturing facilities to inland areas. That means many migrants now working in Shanghai might find jobs much closer to their hometowns and families.

Who's to say that skilled labor and professionals who came to Shanghai from far and wide to take advantage of job opportunities won't follow?

According to the local statistics bureau, the average disposable income of urban residents in Shanghai rose 10.4 percent last year to 1,838 yuan, but that gain trailed the 11.3 percent national average.

With inland provinces nipping at the city's heels, Shanghai has embarked on a strategy of moving away from traditional dependence on export-oriented industries in favor of transforming itself into a global financial hub to rival New York or London. It is also seeking to make the city a mecca for advanced technology research and development.

But turning vision into reality is a slow and sometimes tricky process.

Shanghai, which is already considered China's financial hub, certainly has the potential to catapult its financial services sector into the global big league, according to Fang Xinghai, director of the Shanghai Financial Services Office.

But Fudan University economics professor Sun Lijian points out that the city's ambitions are hobbled for the moment by the limited convertibility of the yuan and by an urgent need to introduce more innovative financial products, such as derivatives. Both moves are controlled by the national government.

For global investors to invest in yuan products, they need financial instruments that are safe, stable and easily sold. At present, China offers them none of the above, according to Sun. Clearly, a market with limited foreign investment, no matter how large its volumes, can hardly be called a global center.

Over time China may relax its grip on financial services regulation. The country initiated a pilot program allowing the yuan to be used in some cross-border trading and is expected to expand the program to allow companies to do some overseas deals in yuan. But there have been no signs that changes to the controlled currency-exchange mechanism are imminent. Shanghai is left cooling its heels.

Sluggish reform

Last year, the value of Shanghai's financial sector expanded 4.9 percent from 2009 to 193.1 billion yuan, according to the local statistics bureau. The pace slowed 20 percentage points from a year earlier due to sluggish financial reform and the bleak performance of the Shanghai Stock Exchange.

Transactions on the exchange dropped 12 percent last year to 30.43 trillion yuan, and the Shanghai Composite Index had the ignominious distinction of ranking among the worst-performing in the world.

The broader services sector in Shanghai reported 5 percent growth in 2010, to 961.8 billion yuan, but that performance fell short of the overall economic growth rate of 9.9 percent and largely reflected the visitor benefits from the Expo.

In Shanghai's Five-Year Plan from this year, city officials have laid out three major projects they consider strategic to economic growth: the Hongqiao Business Park, the redevelopment of the World Expo site and the forthcoming Disneyland in Pudong.

Yes, Haibao, the iconic blue mascot of the World Expo has stepped aside to make way for Mickey Mouse. Shanghai will build a Disneyland theme park in Pudong as early as 2015. But maybe it's too early to be euphoric even about that.

One only has to look at Hong Kong to see the possible pitfalls. The Hong Kong government, which heavily subsidized the construction of a Disneyland park there, is still reeling from what turned into a white elephant.

Hong Kong Disneyland reported a loss of HK$718 million (US$92.3 million) last year. Though narrower than the loss in 2009, the figures didn't do much to cheer up a government expecting big returns on its investment.

That's prompted Tu Haiming, a political adviser and boss of a Hong Kong-based property firm, to express concern that Shanghai should be careful not to follow in Hong Kong's footsteps.

He has suggested that the Shanghai city government negotiate with the Walt Disney Co for a bigger slice of income that goes beyond just ticket sales.

Shanghai should try to secure a share of profits in corollary Disney-controlled businesses such as product sales, park hotel revenue and TV channel earnings.

Like most hangovers after a gala party, the post-Expo doldrums require Shanghai to pull itself together and move forward. Its underlying strengths as one of China's premier cities make that process possible.

Shanghai's infrastructure for the service industry is among the best in the nation and its foundations in green technology and other vanguards of the future are rock solid.

Maybe it's all a matter of re-energizing public spirit to remind everyone that Shanghai, once it sets its sights on something, can prove to be an unstoppable force.