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City weathers global economic trend

SHANGHAI is well and truly back on track after being caught up in the fallout from the global economic crisis.

The city delivered a much better than expected economic performance in the second quarter, with improved data related to fiscal income, investment and trade.

The city's fiscal income last month rose a significant 14.9 percent from a year earlier. The growth returned to black in May after posting negative figures for six straight months.

Fixed-asset investment in Shanghai expanded 15.7 percent year on year in June which set growth in the first half at 9.6 percent, compared with a rise of 7.8 percent in the first five months.

The value of Shanghai's outbound investment more than tripled from a year earlier to US$715 million in the first half, surpassing the total amount in 2008.

Shanghai's trade, the hardest-hit sector in the crisis, had its downward momentum halted last month. The trade volume stood at US$43.1 billion, down 15.1 percent from a year earlier but expanding 13 percent from the previous month.

Shanghai's exports fell 19.9 percent on an annual basis to US$25.8 billion last month. However, they advanced 8.1 percent compared with the volume in May.

Imports also decreased 6.6 percent year on year but jumped 21.1 percent from May to settle at US$17.3 billion, the Shanghai Customs said.

"The city felt the blow of the global financial crisis earlier than other places and has suffered more deeply," Xinhua news agency said yesterday in a report releasing some figures ahead of the regular disclosure by the Shanghai Statistics Bureau.

"However, a series of key economic data shows that Shanghai's economy has bottomed out and has staged a stable recovery.

"The city has played the role of leading other areas to counter the global financial crisis."

Weng Jianhua, deputy chief economist at the Shanghai Municipal Development and Reform Commission, attributed the city's fiscal achievement to its tremendous efforts to boost the economy in difficult times.

"The Shanghai government has adopted many unusual ways to stimulate the economy," Weng said.

"The city showed signs of a slowdown earlier but also recovered earlier. It is like a race against a storm and the outcome is encouraging, thanks to efficient and effective government measures."

Since the beginning of the year, Shanghai has lowered the threshold level for starting a company, reduced taxes for small and medium enterprises, provided subsidies for buyers of cars, television sets and air-conditioners to encourage consumption, and launched a series of policies to accelerate construction in a bid to turn the city into a global financial center.

Shanghai created 67,000 jobs in the first six months, "a rare gain" in recent years, Xinhua said. Among them, about 25,000 came from the 5,540 small and medium enterprises that were established under the supportive government policies.

The disposable income of city residents increased 7.6 percent during the period.

Shanghai's service industry expanded 13 percent in the second quarter and accounted for more than 60 percent of the city's total economy. This was a record high and illustrated an improved economic structure, Xinhua said.


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