Shanghai economy maintains stability, progress in 2019

Huang Yixuan
Local GDP is estimated to have grown by over 6 percent last year, while the city also advanced toward meeting key economic reform and development objectives.
Huang Yixuan

Shanghai's economic development sustained the momentum of overall stability and steady progress in 2019, when its gross domestic product is estimated to have grown by over 6 percent, according to the city's Report on the Work of the Government released on Wednesday.

"Over the past year, confronted with the complicated situation of rising risks and challenges at home and abroad, we have remained firm in our strategic focus and development confidence," Shanghai Mayor Ying Yong told the Third Session of the 15th Shanghai People’s Congress that opened on Wednesday.

"Rising to the challenges head-on, we put stabilizing growth high on our agenda, achieving high-quality development through steady growth and effectively addressing external uncertainties with certainties of our own development."

Revenue in the general public budget went up by 0.8 percent despite a substantial reduction of over 202.2 billion yuan (US$29.34 billion) in taxes and administrative charges, which affected the local revenue growth rate by 11 percentage points. 

Employment remained stable with 589,000 new jobs created. The registered unemployment rate was 3.6 percent and the surveyed unemployment rate is estimated at around 4.3 percent.

Prices also remained steady, with the Consumer Price Index up by 2.5 percent. 

Ying said that the city's "new economic engines have continued to improve," with total expenditure on research and development accounting for 4 percent of the city's overall GDP. The number of invention patents per 10,000 people increased to 53.5.

New industries, business formats and business models held a fast-growth momentum. The output of the alternative energy industry rose by 15 percent and revenue of the Internet industry surged by over 30 percent.

Meanwhile, the structure of the economy has been further optimized, as the added value of the tertiary sector has accounted for more than 70 percent of the total GDP last year, and the manufacturing portion of strategic emerging industries has contributed to over 30 percent of total industrial output.

Ying also talked about the city's efforts and achievements in implementing the "Three Major Tasks and One Major Platform" initiative as well as further promoting reform and opening-up.

For instance, the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone has been unveiled, and supportive policies and administrative measures, systems and mechanisms have been launched to boost the development of the area.

More than 4,025 companies have been established and 168 key projects have been signed in the special area with a total investment of over 82.19 billion yuan. 

Another highlight was the launch of the STAR Market of the Shanghai Stock Exchange with the experiment of a registration-based IPO system going smoothly. 

To date, 70 enterprises among the 205 whose applications were received have successfully gone public on the STAR Market, and have raised 82.4 billion yuan.

The national strategy of the Yangtze River Delta region integration, meanwhile, has also been implemented across the board. 

The city has formulated and put into practice the Outline Plan on the Integrated Development of the Yangtze River Delta, mapped out implementation plans for turning Hongqiao into an international hub for opening-up, and begun the development of the demonstration zone for the integrated green development of the Yangtze River Delta.

The Three Major Tasks were assigned to Shanghai by Chinese President Xi Jinping at the opening ceremony of the first China International Import Expo (CIIE) in 2018, and the second edition of the expo held last year was a resounding success as well. 

Intended deals made via the second CIIE posted a total worth of US$71.13 billion in annualized terms, a year-on-year growth of 23 percent. Also, spillover effects of the expo has been amplified through successful city promotion of Shanghai and permanent bonded exhibition and spot sales, according to Ying.

Also, reforms on major areas have been advanced. For instance, the comprehensive reform of regional state-owned assets and state-owned enterprises has been launched, the reform of "separating business license from administrative permit" has been scaled up citywide, and new models of smart customs supervision and clearance have been explored.

In terms of attracting foreign investment, Shanghai saw the number of new foreign investment projects increase by 21.5 percent; the amount of contractual and paid-in foreign capital grew 7.1 and 10.1 percent, respectively; and the number of new regional headquarters and R&D centers of multinational corporations increased by 50 and 20, respectively.

As for the optimization of the business environment, which is also among the topics that the Shanghai government has emphasized, the city has introduced 108 new reform measures, including expedited approvals of construction projects and the pilot program of replacing written proof with statement of good-faith, which has led to simpler and faster processes. Time needed for the deregistration of a company was also shortened by more than one-third. 

Such improvements have contributed to the rise of China's ranking in the World Bank's Doing Business Report from 46th to 31st.

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