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Global woes pinch rise in city GDP

SHANGHAI'S economic growth tailed off to 9.7 percent last year - the first single-digit performance since 1992 - as the global financial crisis took a bite out of the city's foreign trade and corporate profits.

The Shanghai Statistics Bureau reported yesterday that the city's gross domestic product - its total amount of goods and services - reached 1.37 trillion yuan (US$200 billion) in 2008.

The growth rate compared with a 13.3 percent jump in 2007.

The total GDP worked out to US$10,529 per capita compared with US$8,594 the year before, bureau chief economist Cai Xuchu said.

One factor buffeting the city's economy last year was its large exposure to foreign markets compared with other Chinese mainland cities, making it more vulnerable to the global economic downturn.

Its rate of growth, however, was similar to that of other foreign-market-oriented provinces such as Guangdong and Zhejiang, Cai said.

Shanghai's economy expanded 10.1 percent in the first three quarters last year. The local bureau didn't provide a separate calculation for the fourth quarter.

The national GDP figure is expected to be released today and is also forecast to continue to show downward momentum. China's GDP grew 9 percent in the third quarter last year, down from 10.1 percent in the second quarter and 10.6 percent in the first quarter, according to the National Bureau of Statistics.

Shanghai's service industry, including financial firms, catering and property companies, continued to lead the local expansion, growing 11.3 percent last year to 735 billion yuan. The rate of growth slowed, however, from the 15.2 percent gain the year before.

The industrial sector experienced diminishing growth amid weakening orders. It rose 8.2 percent to 623.6 billion yuan, compared with 11.5 percent the year before.

Among the city's pillar industries, the output value of high-quality steel manufacturing declined 7.9 percent, and the auto industry fell 0.9 percent, the statistics bureau said.

The central government has announced support packages to aid those industries, including a push for consolidation in the steel sector and sales tax reductions for cars with smaller engines.

Shanghai's primary industry, which includes agriculture and other natural resources, increased 0.7 percent to 11.2 billion yuan, compared with 2 percent the year before.

On the foreign trade front, the city's exports increased 17.7 percent last year, narrowing from 26.7 percent in 2007, while imports added 9.9 percent against the 22.1-percent growth in 2007.

"Weakening exports were reflected mainly in declining deliveries of communications equipment, computers, garments and textiles, as well as furniture and pharmaceuticals," Cai said.

Despite the downturn, local residents still seemed willing to spend, as average disposable income for urban residents rose 12.9 percent year on year.

Shanghai's retail sales increased 17.9 percent to 453.7 billion yuan in 2008. Among them, car sales posted the fastest growth, jumping 25.1 percent to 28.8 billion yuan.

The city's Consumer Price Index, the main gauge of inflation, rose 5.8 percent last year, after surging 7.9 percent in April, an intra-year high, because of surging food prices.


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