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Call for more initiatives as city economy bounces back

SHANGHAI'S economy had been on the recovery track since April following the serious fallout from the global recession, the city's Party secretary said yesterday.

"We have seen a warming up of the local economy over the second quarter," Yu Zhengsheng told the two-day session of the Shanghai Committee of the Communist Party of China, which ended yesterday.

"The situation is better than expected, but the growth is still not solidly founded," Yu said.

The steady overall growth of the city's economy is mostly reflected in its financial and service sectors, which has been developing quickly since April, thanks to stimulus policies implemented in the wake of the global crisis, according to a report delivered at the session.

But the growth is barely supported by Shanghai's manufacturing industry, which was marred by negative growth in the first several months of this year.

The city estimated that output of its service industry in the first six months may have increased by 15 percent from a year earlier and was expected to account for 60 percent of Shanghai's total gross domestic product.

Booming performances by the local stock and real estate markets and the vehicle sector in the second quarter contributed to the strong growth in this sector of the economy, top government officials said.

Shanghai presented a gloomy picture of economic development late last year and early this year amid the world crisis, they said.

The city government earlier estimated that 2009 may be the toughest year for Shanghai to advance economic development since it started the reform and opening-up drive in Pudong in 1990.

Despite better-than-expected overall economic growth so far, city officials said Shanghai's manufacturing sector, including key industries such as electronics, steel and petrochemicals, continued to shrink.

Land focus

According to the officials, the city's large manufacturing entities reported a combined reduction in profit of 33.2 percent in the first five months of this year compared with a year earlier.

Yu told city officials and key state-owned entity leaders that it was time for Shanghai's manufacturing industry to take more steps in developing innovative technology and brands to improve competitiveness.

On the whole, the local manufacturing industry was excessively relying on overseas markets for sales as well as core technology in production, Yu said. Changes to improve the manufacturing industry would decide how quickly Shanghai could be fully freed from the influences of the economic crisis.

Yu said the city would continue to keep the real estate market at the center of its attention.

He urged that district and government authorities spare no effort in finding and releasing available land citywide for constructing more residential housing projects. They should stop any attempt to reserve land in order to sell it to developers later for higher prices.

The city is also focusing this year on preparations for the trial run of Shanghai World Expo sites scheduled for April next year.


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