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Shanghai's FAI jumps 7.8%

FIXED-ASSET investment in Shanghai in the first five months rose 7.8 percent from a year earlier to 165.4 billion yuan (US$24.2 billion), up 3.7 percentage points from the period through April, said the Shanghai Statistics Bureau yesterday.

However, retail sales in the city continued to grow, jumping 12.4 percent in May on an annual basis to 43.4 billion yuan and helped bolster Shanghai's economy during a period of shrinking external demand.

Shanghai's exports in May dived 29.7 percent year on year to US$9.9 billion, dropping further from a fall of 26.2 percent in April.

"The expansion in FAI and retail sales are extremely important to sustain the city's economy when there is little hope for exports to rebound soon," said Wang Zehua, an analyst with the bureau.

Shanghai is aiming for a 9 percent growth in gross domestic product this year.

In the first quarter, its GDP slowed to 3.1 percent after posting a 9.7 percent expansion last year - the first single-digit rise in 17 years mainly due to the faltering demand in overseas markets.

But Shanghai's major economic data improved in May, signalling the city may be on the recovery track.

Industrial production in Shanghai fell 2.1 percent from a year earlier to 188.9 billion yuan last month.

But the pace of contraction in industrial production narrowed from the declines of 5.2 percent in April and 7.1 percent in March.

In the first five months, investment in urban infrastructure construction jumped 18.5 percent to 59.8 billion yuan, fueled by government-backed projects under a massive stimulus package.

The investment in the industrial sector through May grew for the first time this year by 0.1 percent from a year ago to 41.6 billion yuan.

Spending in the catering industry gained 13.6 percent to 6.6 billion yuan in May and 2.3 billion yuan were spent on buying cars, up 1.8 percent from a year earlier.


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