SHANGHAI: Despite the drag of the depressed stock and property markets, the city's GDP grew 10.3 percent to 653.07 billion yuan in the first half of 2008, a whisker below the national growth rate of 10.4 percent in the same period, Shanghai municipal statistics bureau said.
A crane carries materials in front of the Oriental Pearl Tower in Shanghai's Lujiazui. [Bloomberg]
The downturn of activities in the property sector weighed down the GDP growth rate by 0.4 percent, while the bearish securities market made "zero contribution" to economic growth, said Cai Xuchu, the bureau's chief economist and spokesman. In contrast, the two sectors contributed 19 percent to the city's growth in the first six months of 2007, he said.
According to Cai, Shanghai's housing sales slid 18.5 percent in the first half to reach 12.28 million sq m, of which 10.7 million sq m were newly built residential apartments.
Because of its openness, "the Shanghai economy is more exposed to the influences of global economic conditions. That's why Shanghai's GDP growth lagged behind the nationwide level for the second time since 1992", Cai said. The first time this happened was in 2005.
He added that the city's growth was also affected by the elimination of outdated production facilities in the ongoing economic restructuring. "The development of the service industry was hampered by the bearish stock market and tepid real estate sector," he said.
The city's consumer price index (CPI), the barometer of inflation, rose 7.1 percent in the first six months of this year from the same period a year ago.
Shanghai would still face inflation pressure in the next half fuelled by the likely price increases of edible oil and vegetable products, Cai said.
The bureau's figures also showed that Shanghai's fixed-asset investment rose 2.3 percent to hit 197.2 billion yuan in the first six months, down 7.3 percent from the first half of last year due to the tightening macroeconomic control, decreased number of infrastructure development projects and the shrinking of capital supply.
The investment in real estate development climbed 3.8 percent to 64.3 billion yuan in the first half, but the growth rate shed 2.4 percentage points from the same period of last year. In addition, 54.3 billion yuan was dived into the industrial investment from January to June, down 7.8 percent from last year.
Shanghai's import and export volume still climbed 23.2 percent to reach $157.6 billion in the first half. The export sector gained $80.4 billion with 25.1 percent growth last year, despite the declining demand in overseas market.