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City Party chief predicts industry output rebound

SHANGHAI'S economy is on the road to recovery, with industrial output expected to expand in June after months of decline, city Party Secretary Yu Zhengsheng said yesterday.

The decline in the city's industrial production moderated to about 5 percent year on year in April after a drop of about 10 percent in March, Yu told a government work meeting yesterday. He forecast that industrial output will remain flat in May and rise in June.

"Shanghai's month-by-month economic indicators are showing signs of improvement," he said. "The improved indicators derive from macroeconomic measures and the relatively strong growth in Shanghai's fiscal revenue and financial industry."

The city's economic growth tailed off to 3.1 percent in the first quarter of this year after posting a 9.7 gain for all of last year, its first single-digit growth in 17 years, due to the deepening impact of the global financial crisis.

Industrial output dropped 8.1 percent in the first quarter from a year earlier.

"We expect better results for the second quarter," Yu said, adding that he looked forward to boosting the city's economy by improving its economic structure.

The city government will closely watch the development of the real estate industry and maintain "stable and healthy" growth, Yu said. The city will also encourage investors to help restructure industrial companies, he said.

"Some old industrial enterprises, which used to be big-name players, are loosing steam. We welcome industry leaders from home and aboard to restructure these companies, rather than letting them continue their current flat performance," Yu said, without naming the enterprises.

Shanghai brands used to be leaders in market segments such as watches, bikes and sewing machines, but they lost their top positions as competition increased.

Yu also noted that city government will allocate 10 billion yuan (US$1.46 billion) to commercialize its innovative high-tech products.

Shanghai is leading the country in industrial areas such as auto making, nuclear power and wind power. The city has spent years on new-energy auto research and development, Yu said.

Shanghai also plans to further develop Hongqiao into a business area based on its convenient transport facilities, he added.


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