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Financial hub an 'inevitable choice' for Shanghai

DEVELOPING Shanghai into a global financial hub will help the city improve its economic structure and realize sustained growth, Shanghai Party Secretary Yu Zhengsheng told the Lujiazui Forum 2009 this morning.

"It is the inevitable choice for Shanghai's long-term sustainable development," Yu told more than 300 government officials, financial executives and academics at the forum.

"As the global financial scenario changes and China's economic status is boosted, Shanghai must make every effort to take this precious chance to develop itself into an international financial center," he said in the opening keynote speech.

China's State Council in late March issued guidelines intended to turn Shanghai into a worldwide financial and shipping hub by 2020 via giving the city priority to introduce financial innovation and other preferential policies.

"We will work with the central government to let Shanghai become the pioneer and the test site for China's financial reform and innovation," Yu said.

Yu acknowledged that Shanghai faces great challenges in dealing with the global financial crisis as exports slump and industrial output declines. But he also noted that the overall economic situation now is "better than expected."

Shanghai's exports dropped 26.2 percent year on year in April to US$25.13 billion, the sixth consecutive monthly decline, compared with a decline of 16.4 percent in March, according to Shanghai Customs.

But the city's industry output offered hope. The decline in production eased to 5.2 percent last month, compared with a 7.1 percent loss in March, according to Shanghai Statistics Bureau.

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. Shanghai aims to achieve an economic growth of 9 percent for 2009.

Yu said earlier that he expected industrial output to expand again in June after months of decline, but he warned yesterday that the city should do more to counter the global economic downturn.

"The external situation is complicated and Shanghai's economy faces a lot of uncertainties," Yu said. "The recovery is not steady so we must work out more measures to curb the negative impact of the economic crisis."


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