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October 28, 2009

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Home » Business » Economy

City's GDP jumps 7.1% through Q3

SHANGHAI'S economy picked up pace in the third quarter as a result of sustained growth in investment and consumption, indicating the city is recovering well from the global downturn.

Gross domestic product increased 7.1 percent year on year in the first three quarters to 1.02 trillion yuan (US$150 billion), compared with an on-year rise of 5.6 percent in the first half, the Shanghai Statistics Bureau said yesterday.

The bureau did not break down economic data for the third quarter. But the figure for the first nine months suggested that the city's economy continued to rebound in the July-September period. Local GDP rose only 3.1 percent in the first quarter.

"Growth in investment and retail sales can help the city's economy sustain its strength in the fourth quarter," said Zhu Yan, a Bank of China analyst. "Shanghai is on track to achieve its 9 percent growth target for this year."

The growth rate was 9.7 percent in 2006 and 13.3 percent the year before.

The city's retail sales jumped 14 percent year on year in the first three quarters, the statistics bureau said on October 15. The growth compared with a 13.8 percent rise for the January-June period.

Urban fixed-asset investment in Shanghai soared 14.1 percent year on year for the January-September period, compared with 9.6 percent growth in the first half. In September, spending jumped 25.6 percent from a year earlier.

"Exports could remain volatile, and weakness in trade will probably remain until early next year," said Wu Ke, a Zhongtian Investment Consulting Co analyst. "A real recovery in the city's economy in 2010 hinges on how quickly external demand can improve."

The city's exports dropped 14.7 percent last month, but it was the smallest monthly loss this year. It compared with a drop of 24.7 percent in August and a decline of 22.6 percent in July.

For the first nine months, exports dropped 22.5 percent.

"City government should take the opportunity to upgrade the export sector and encourage development of the industries with high added values," said Li Maoyu, an analyst at Changjiang Securities Co.

The city's export decline was driven mainly by weaker demand for products in labor-intensive industries.

Shanghai-based enterprises recovered strongly in terms of industrial production in the third quarter. Output jumped 9 percent in September, the biggest monthly gain since August 2008.

Industrial output in the city has risen for four straight months after slumping for seven months.


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