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Shanghai's manufacturers face tough task

SHANGHAI'S manufacturing sector faces greater difficulties in recovering than the rest of the country because it is more export-oriented, the Shanghai Municipal Development and Reform Commission's director said today.

"Shanghai manufacturers are more reliant on exports, thus they suffer deeper from the deteriorating external demand. Also, the investment in manufacturing has been hovering at a low level in recent years, which leads to sluggish growth at present," Zhou Bo, the director of the commission, the top economic planning agency, said in a report to the city's lawmakers.
Shanghai's industrial production halted its losing streak in July, increasing 2.1 percent from a year earlier to 198 billion yuan (US$28.9 billion), according to the Shanghai Statistics Bureau.

The exports of industrial products was 13.4 percent lower than a year earlier at 54.8 billion yuan, 5 percentage points lower than the previous month.

Shanghai's industrial production for the first half of this year was 5.1 percent lower than the previous period, the worst performance apart from Shanxi Province, which posted a slump of 17.4 percent due to closures of many of its coal mines out of safety concerns.

Meanwhile, the declining producer prices in the city also mirrored the weak demand from manufacturers, which depressed the outlook of the sector's growth.

The Producer Price Index, the main gauge of factory-gate inflation, in July was 8.5 percent lower than a year earlier, worse than the June figure of 8 percent, the bureau said today.

To deal with the difficulties, Zhou said, Shanghai will enhance financial support for small- and medium-sized producers and help them find local buyers to offset the loss in the foreign markets.

"It is also a time to accelerate the development of advanced manufacturing, including new energy, green vehicles and biotechnology, and replace those highly polluting sectors to upgrade the industrial structure," Zhou said.

He said the commission would visit 20 of the city's centrally administered enterprises this year to help them win big projects, including the production of satellites and commercial jumbo jets.


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