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Shanghai economy weakening faster than feared, says analyst
By Wang Yanlin |
May 15, 2012, Tuesday
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Online Edition
Online Edition
Shanghai's economic growth weakened further in April as exports, imports and fixed-asset investment all declined. The weak data also dented industrial production growth in the first four months, data from the Shanghai Statistics Bureau showed today.
With fading inflationary pressure around the country, Shanghai in particular needs stimulus to boost growth, analysts said.
Exports decreased 5.6 percent from a year earlier to US$16.3 billion last month, and imports cut 1.6 percent to US$18.2 billion.
It was the first time since October 2009 that Shanghai reported declines in both exports and imports, according to the bureau.
Fixed-asset investment in the first four months dipped 0.4 percent to 122.3 billion yuan (US$19.4 billion), led by a 25.8 percent drop in urban infrastructure construction investment.
Industrial production lowered 0.2 percent to 1.01 trillion yuan during the January-April period, compared with the 0.7 percent expansion in the first quarter.
"Shanghai's economic growth is weakening faster than feared," said Li Maoyu, an analyst at Changjiang Securities Co. "Although we have expected a slower rate due to the economic restructuring, the city still needs steady growth to create jobs and attract promising talents."
Shanghai has carried out an ambitious restructuring in a bid to become a more service industry-led economy. The city aims to grow into a global finance, shipping and trading center by 2020.
The city's gross domestic product only grew 7 percent year on year in the first quarter, the slowest in 18 months and the weakest in China.
"Shanghai needs to beef up efforts on sustaining growth momentum," said Xue Jun, an analyst at CITIC Securities Co. "It should start from allowing more flexibility in the financial sector to enrich market liquidity."
Shanghai's Consumer Price Index, the main gauge of inflation, expanded 3.6 percent in April, less than March's 3.8 percent but higher than the national average of 3.4 percent.
To stimulate growth, the reserve requirement ratio was cut by 50 basis points, effective Friday, by the People's Bank of China. The move will release about 400 billion yuan into the market.
With fading inflationary pressure around the country, Shanghai in particular needs stimulus to boost growth, analysts said.
Exports decreased 5.6 percent from a year earlier to US$16.3 billion last month, and imports cut 1.6 percent to US$18.2 billion.
It was the first time since October 2009 that Shanghai reported declines in both exports and imports, according to the bureau.
Fixed-asset investment in the first four months dipped 0.4 percent to 122.3 billion yuan (US$19.4 billion), led by a 25.8 percent drop in urban infrastructure construction investment.
Industrial production lowered 0.2 percent to 1.01 trillion yuan during the January-April period, compared with the 0.7 percent expansion in the first quarter.
"Shanghai's economic growth is weakening faster than feared," said Li Maoyu, an analyst at Changjiang Securities Co. "Although we have expected a slower rate due to the economic restructuring, the city still needs steady growth to create jobs and attract promising talents."
Shanghai has carried out an ambitious restructuring in a bid to become a more service industry-led economy. The city aims to grow into a global finance, shipping and trading center by 2020.
The city's gross domestic product only grew 7 percent year on year in the first quarter, the slowest in 18 months and the weakest in China.
"Shanghai needs to beef up efforts on sustaining growth momentum," said Xue Jun, an analyst at CITIC Securities Co. "It should start from allowing more flexibility in the financial sector to enrich market liquidity."
Shanghai's Consumer Price Index, the main gauge of inflation, expanded 3.6 percent in April, less than March's 3.8 percent but higher than the national average of 3.4 percent.
To stimulate growth, the reserve requirement ratio was cut by 50 basis points, effective Friday, by the People's Bank of China. The move will release about 400 billion yuan into the market.
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