City's economic growth slows but nice trade-off
By Wang Yanlin |
June 18, 2010, Friday
|
Print Edition
Print Edition
Shanghai showed further signs of a cooling economy in May, with moderating growth rates in industrial production and investment.
However, exports lifted and consumer prices continued to rise, making a call on policy changes difficult.
The data released yesterday painted a mixed economic picture, analysts said.
They suggested policy makers be more careful in tightening credit, which may hurt growth momentum that is already slowing.
"Shanghai's economy is healthy, with a mild easing in production and investment," said Yan Jun, an analyst at the Shanghai Statistics Bureau. "The cooling signs indicated tighter policies have taken effect and reduce the possibility of a hard landing."
Li Maoyu, an analyst at Changjiang Securities, said the exit from economic stimulus measures should be gradual and it was important to guarantee existing projects should get the funds they needed for completion.
"With less investment, the economy will rely more on people's consumption to drive growth," Li said. "It is natural to reduce investment when the whole world is considering a retreat from stimulus measures."
In the first five months, the city's fixed-asset investment rose 5.6 percent from a year earlier to 174.7 billion yuan (US$25.57 billion), the statistics bureau said yesterday. This compares with the rise of 11 percent through April.
Investment in the manufacturing sector in the January-May period fell 6.8 percent, while spending in the services industry rose 9.2 percent and the agricultural industry gained 19.1 percent.
Shanghai industrial production rose 24.6 percent on an annual basis to 243.4 billion yuan last month, slower than the 26.2 percent in April and 28.2 percent in March.
Production in the city's six key industries - information technology, vehicles, refinery, fine steel, machinery equipment and biomedicine - registered a combined growth of 28.9 percent.
The consumer price index, the main gauge of inflation, increased 3.2 percent in May, higher than the rise of 2.6 percent in April and stronger than the national figure of 3.1 percent for last month.
Exports climbed 48.1 percent annually to US$14.7 billion last month and imports rocketed 51 percent to US$15.4 billion, making May a third consecutive month for the city to post a trade deficit.
Retail sales, boosted by consumption during the Shanghai World Expo which started last month, advanced 18.9 percent from a year earlier to 51.2 billion yuan.
However, exports lifted and consumer prices continued to rise, making a call on policy changes difficult.
The data released yesterday painted a mixed economic picture, analysts said.
They suggested policy makers be more careful in tightening credit, which may hurt growth momentum that is already slowing.
"Shanghai's economy is healthy, with a mild easing in production and investment," said Yan Jun, an analyst at the Shanghai Statistics Bureau. "The cooling signs indicated tighter policies have taken effect and reduce the possibility of a hard landing."
Li Maoyu, an analyst at Changjiang Securities, said the exit from economic stimulus measures should be gradual and it was important to guarantee existing projects should get the funds they needed for completion.
"With less investment, the economy will rely more on people's consumption to drive growth," Li said. "It is natural to reduce investment when the whole world is considering a retreat from stimulus measures."
In the first five months, the city's fixed-asset investment rose 5.6 percent from a year earlier to 174.7 billion yuan (US$25.57 billion), the statistics bureau said yesterday. This compares with the rise of 11 percent through April.
Investment in the manufacturing sector in the January-May period fell 6.8 percent, while spending in the services industry rose 9.2 percent and the agricultural industry gained 19.1 percent.
Shanghai industrial production rose 24.6 percent on an annual basis to 243.4 billion yuan last month, slower than the 26.2 percent in April and 28.2 percent in March.
Production in the city's six key industries - information technology, vehicles, refinery, fine steel, machinery equipment and biomedicine - registered a combined growth of 28.9 percent.
The consumer price index, the main gauge of inflation, increased 3.2 percent in May, higher than the rise of 2.6 percent in April and stronger than the national figure of 3.1 percent for last month.
Exports climbed 48.1 percent annually to US$14.7 billion last month and imports rocketed 51 percent to US$15.4 billion, making May a third consecutive month for the city to post a trade deficit.
Retail sales, boosted by consumption during the Shanghai World Expo which started last month, advanced 18.9 percent from a year earlier to 51.2 billion yuan.
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