Shanghai Economy to Grow 10.5 Percent This YearThe economy of Shanghai, China' s major economic center, will maintain a 10.5 percent growth this year, economists said in Shanghai Thursday, January 4.The experts agreed that Shanghai is able to maintain economic growth at double-digits, as robust domestic demand boosts the economy. But exports will be down, to some extent, from a slowing US economy and reviving Asian economy. Optimism towards the economy is also attributed to China's impending entry into the World Trade Organization (WTO), as well as the continuation of active and moderate financial and monetary policies. Zhou Zhenhua, a leading economist, noted that two impressive economic records were set last year: the proportion of service industry output surpassed 50 percent in Shanghai's gross economic growth for the first time, and the information industry soared to a new high. The growth rate of the two industries will decide the rate of growth of the economy this year and in coming years, said Zhou, professor with the Economic Research Institute of the Academy of Social Sciences of Shanghai. The economic growth in Shanghai and in the city's surrounding areas showing momentum to stimulate the growth the service industry. According to expects, the service industry will expand at an much higher rate than the average for the overall economy and it will further increase its share in the city's GDP. The information industry will develop further as a group of key projects involving large amounts of investment are under construction, such as the Hongli Semiconductor Co. Ltd., with an investment of US$1.6 billion and the Zhongxin International Integrated Circuit Co., with an investment of US$1.5 billion. The slowing of fixed assets investment for several straight years in the city will be reversed. The real estate market will be activated by the construction of 14 million sq.m of housing a year for the next five years. Investment in equipment will maintain moderate growth with the deepening of restructuring of industries and capital reorganization. Product upgrade and an increase of export destinations in Shanghai will result in reasonable export growth. Analysts said preferential policies to develop pillar industries like information will help the city attract more overseas investment and overseas-funded programs. Economists agreed that although the economy in Shanghai in 2001 will grow at a slightly lower rate than the 10.8 percent last year, it will two percentage points above the nation's average. "A new round of economic surge for Shanghai is arriving, and it is fairly reasonable for people to be optimistic on Shanghai's economy for the year," Lu Deming, economic professor with the Fudan University, said. |
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