Shanghai to play its role in reform and opening up
“Start again on the road of reform!” said Shanghai Party Secretary Li Qiang during the ongoing sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference.
“Shanghai must bear in heart its mission of serving the national strategies to nurture a high-quality growth, with the focus on transforming and upgrading industries,” Li said, urging the city to make new contributions to China’s development.
It is the mission for Shanghai — a vanguard city playing a leading role in China’s economic and social transformation.
“Shanghai should re-make its advantages in various industries to respond to the latest call of the country,” Li said.
“We are the witnesses of a great era, with historical changes taking place around Shanghai,” Li said.
Shanghai — a star performer in economic growth
Shanghai’s economy has grown at a faster pace in the past year, with a substantially larger contribution from the real economy, and the growth has been more stable, coordinated and balanced:
Better synergy was realized between the manufacturing sector and the services sector. Shanghai’s gross domestic product expanded 6.9 percent year on year to reach 3.01 trillion yuan (US$480 billion) in 2017. That is better than the 6.5 percent preliminary target set at the beginning of last year and made Shanghai the first city in China to deliver a GDP of more than 3 trillion yuan.
The proportions of the city’s agriculture, manufacturing and services sectors were 0.3 percent, 30.7 percent and 69 percent respectively in the overall economy. The performance of the manufacturing sector was much better than expectation.
The added value of industrial production increased 6.4 percent, the fastest since 2012; the output of six pillar industries grew 9 percent, among which automobile and information technology jumped 19.1 percent and 7.6 percent respectively.
The strategic emerging industries rose 5.7 percent, up 4.2 percentage points from a year earlier and accounting for 30.8 percent in the overall industrial production of the city.
The services sector has seen an improved structure amid stable growth. Output of Shanghai’s services sector advanced 7.5 percent in 2017, among which finance and IT jumped 11.8 percent and 18.9 percent respectively. The services sector extended a stable growth with faster pace in production-related parts that have closer interaction with the real economy.
Recovery was seen in both domestic and overseas demand. Shanghai’s investment has seen generally stable growth. Fixed-asset investment added 7.3 percent year on year to reach 724.66 billion yuan in 2017; the city’s investment in infrastructure rose 9.9 percent, bolstered by projects in transport and urban construction; while investment growth in real estate development slowed to 4 percent. Private investment also maintained a relatively fast rise of 13.5 percent to contribute 37.5 percent to the overall investment basket.
Consumption growth accelerated. Driven by a recovery in demand and a rebound in prices, the city’s commodity sales increased 12 percent to 11.3 trillion yuan last year, its first double-digit growth in two years. Retail sales rose 8.1 percent to 1.2 trillion yuan, and that of e-commerce surged 21 percent while online retail sales were lifted by 9.6 percent, accounting for 12.2 percent of total retail sales and representing the fast development of new business models.
Trade managed rapid growth. Shanghai’s trade of commodities grew 12.5 percent to 3.2 trillion yuan, among which imports jumped 15.4 percent and exports 8.4 percent. Exports have seen more added value as shipments of high-tech products grew 9.2 percent, or 43.4 percent of the city’s total exports.
Employment and inflation were kept stable. Shanghai created more than 579,000 jobs in 2017, while there were around 220,600 registered unemployed people, 22,000 fewer than at the end of last year to make the unemployment rate stabilize at 3.9 percent; the city also strengthened support for startups and created a long-term mechanism for stable job creation. It helped 12,628 entrepreneurs to successfully start their business in 2017. Inflation was tamed. The Consumer Price Index, the main gauge of inflation, increased 1.7 percent in 2017, down 1.5 percentage points compared with a year earlier.
Shanghai — a pioneer in reform and opening up
Shanghai has improved its ability to offer comprehensive services, with acceleration in the development of the China (Shanghai) Pilot Free Trade Zone as well as the city’s construction as a center of innovation in science and technology with global influence, and deepened supply-side structural reform to push forward the city’s economic growth:
The city made further improvements to lift its ability in providing comprehensive services. Transactions in Shanghai’s financial market reached 1.43 quadrillion yuan in 2017, helping the city raise its ranking at the Global Financial Centers Index to 6th from 16th in the previous year. Shanghai’s position as a global trading center was strengthened, and it successfully won the bid to host the China International Import Expo. The city held exhibitions covering 17.5 million square meters last year, making it the world’s top city for fairs. Trade through the Shanghai port reached 7.9 trillion yuan, or 30 percent of the country’s total. The Yangshang Deep-Water Port, the world’s biggest automatic port, has begun trial operation of its fourth-phase dock, and the container throughput of the Shanghai port surpassed 40 million TEUs in 2017 to make the city the world’s busiest port for eight years in a row. Shanghai also made more efforts to support the Belt and Road Initiative. Trade between the city and countries along the Belt and Road jumped 18.9 percent year on year in 2017, contributing 20.5 percent to the city’s overall trade growth. Turnover of contracted projects with those countries surged 51.5 percent, 61 percent of the total growth.
The China (Shanghai) Pilot Free Trade Zone has seen more comprehensive development. Shanghai has made great efforts to implement the tasks specified in the Plan of Comprehensively Deepening Reform in the China (Shanghai) Pilot Free Trade Zone, and has carried out a study on how to construct the free trade port within the zone. It released the 2017 negative list for foreign investment, while compiling and publishing the country’s first guide for a negative list of further opening the financial sector in free trade zones. The city started running the 3rd version of “single window” service for international trade. With innovative policies further stimulating market vitality, more than 50,000 companies were newly registered in the zone, and its foreign investment and trade transactions accounted for more than 30 percent and 40 percent respectively of the city’s total.
The construction of Shanghai into a global center of innovation in science and technology has made new progress. Shanghai has gone all out to push forward construction of the Zhangjiang Comprehensive National Science Center, and won national approval to conduct research on hard X-ray free electron laser devices, together with faster development in major technological projects such as ultra-strong and ultra-short laser devices, soft X-ray free electron laser devices and the second phase of the Shanghai Synchrotron Radiation Facility. Shanghai also released a plan to construct the Zhangjiang Science City and has put it in practice with the establishment of Zhangjiang Lab as well as the construction of six functional platforms for R&D and technology commercialization such as the Shanghai Industrial μTechnology Research Institute. The city has enhanced efforts to attract overseas talent and senior professionals. Its number of invention patents per 10,000 people reached 41.5, up 17.9 percent from a year earlier; expenditure to support R&D equaled 3.8 percent of the city’s economic output.
Shanghai managed faster implementation of key tasks in supply-side structural reform. Shanghai initiated a new round of measures to alleviate pressure over enterprises, further reducing their financial burden by more than 50 billion yuan. The city-level mechanism of regular joint meeting to serve enterprises was set up, together with the launch of cloud services for companies. Shanghai revoked or adjusted 119 administrative approval items last year. With the deepening of the reform in separating business license from administrative permits, 75 out of 116 pilot measures were duplicated across the city based on the practice in the Pudong New Area, and 17 were duplicated across the country. Accelerating the transformation and upgrading of industrial structures, Shanghai sped up the elimination of backward production capacity and inefficient construction land. It completed the structural transformation of 1,436 projects in 2017, and reduced inefficient construction land by 8.4 square kilometers.
Shanghai — a dream maker for good work and life
Shanghai has seen stable growth in its fiscal income, company profit and household income, with a stronger social safety net, better environment and higher quality in economic development:
Fiscal income has managed stable growth. Shanghai’s fiscal income rose better than expected, by 9.1 percent to 664.23 billion yuan last year. Proceeds from the manufacturing and commercial sectors jumped 35.3 percent and 19.2 percent respectively, indicating more contribution by the real economy. Shanghai also witnessed an optimized structure of fiscal income, with non-tax income accounting for 11.7 percent of the total, the lowest in the country.
Companies continued to see a rebound in profit growth. Profits of industrial companies increased 10.5 percent year on year in 2017, bolstered by recoveries in production and its structural adjustment; profit in their core business grew 8.4 percent, higher than the national average. Against the background of fast development of production, profits and taxes among companies, the city’s industrial electricity consumption remained largely the same as the year before, reflecting more efficiency and less dependence on energy consumption.
Household income increased steadily. Disposable income of the city’s residents grew 8.6 percent year on year to 58,988 yuan, with that of urban and rural residents rising 8.5 percent and 9 percent respectively.
Guarantee for people’s well-being was strengthened. The social safety net has seen further improvement, while Shanghai continued to raise subsidies for needy households and the city’s minimum wage. Shanghai made steady progress in providing subsidized housing and in renovating dilapidated districts. It offered another 80,000 units of subsidized housing in 2017 and completed regeneration of 490,000 square meters of dilapidated housing in central districts to benefit 24,000 households. The elderly care system was enhanced. Shanghai established a unified evaluation mechanism to calculate the demand for care among the elderly, and initiated a pilot insurance scheme of long-term care. During the year, Shanghai added 7,088 government-funded beds for senior care. Social services have seen stable improvement. Shanghai released a list of the city’s basic public services in 2017, and made positive progress in comprehensive educational reform. The outline of a “Healthy Shanghai 2030” was inaugurated, and the three-level promotion network of public culture was optimized. The city also had faster construction of public sports facilities.
Ecological environment has seen stable improvement. Shanghai has forcefully executed the action plan for prevention and treatment of water pollution, and posted river chiefs on all levels of the city, districts as well as communities and towns. The task to clean up small and medium-sized waterways has been completed, and there were almost no black or odorous creeks in Shanghai. The average PM2.5 density in Shanghai dropped 13.3 percent from a year ago to 39 micrograms per cubic meter in 2017, and the city has fulfilled the national target in reducing energy consumption in production and reducing emissions of major pollutants.
The frontier
Shanghai will continue to pursue a stable and healthy economic and social development in 2018, running at the country’s frontier of reform and innovation.
In practice, the city will attach more importance to an innovation-driven growth to accelerate the construction of the global center of innovation in science and technology. It will speed up the optimization of a modern economic system and make all-out efforts to build the city’s brands of “Shanghai Services, Shanghai Manufacturing, Shanghai Shopping and Shanghai Culture” to push forward the transformation and upgrading of the real economy.
Shanghai will attach more importance to policy supply, and deepen reforms in the China (Shanghai) Pilot Free Trade Zone in accordance with the highest international standards.
The city will continue to improve its business environment, pushing forward revolutions in government administration and services. The city will also interact measures of reform and opening-up to better translate them into effective, high quality growth.
Shanghai will attach more importance to services, with strengthened efforts to improve the city’s core functions as a global center of economic, financial, trading and shipping as well as its ability to allocate global resources. The modern services sector will be enhanced to let the city play an active role in serving the Yangtze River Delta Region for an integrated development and in serving as a bridgehead in the Belt and Road Initiative, contributing more as a model city to the country’s coordinated development and global cooperation.
Shanghai will also attach more importance to improving people’s well-being and dedicating to the creation of a better life for its people. The city will adopt a lean strategy in carrying out its urban management to optimize the social safety net and eliminate weak points. Shanghai will accelerate the construction of “Green Shanghai” and “Beautiful Shanghai”. It will better implement the plan to revive rural areas, and promote an integrated urban and rural development to let people enjoy more sense of fulfillment, happiness and security among joint efforts and joint achievements.
