SHANGHAI'S economy showed renewed vigor last month as industrial production and fixed-asset investment rebounded, the Shanghai Statistics Bureau said yesterday.
The city's industrial output expanded 7 percent from a year earlier to 273.8 billion yuan (US$42.7 billion) in August, picking up from July's 5.7 percent.
Fixed-asset investment also increased 7 percent year on year to 36 billion yuan, compared with a decline of 5.3 percent in July. The growth depended largely on rising investment in property, the bureau said.
Wang Zehua, an analyst at the bureau, said: "Better-than-expected performance reveals a resilient economy in Shanghai. With fewer economic tightening measures in sight, business communities in the city are exhibiting more confidence, which is reflected in renewed investment and greater demand for industrial products."
However, Wang warned of the risk of retreat in coming months because of a tendency to reduce manufacturing activities and weak performance among Shanghai's leading industries.
The city's Purchasing Managers' Index, an indicator of future industrial output, declined 1.3 points from a month earlier to 49.2 in August. A reading below 50 indicates contraction.
In addition, key industries in Shanghai - information technology, auto, petroleum refining, fine steel, machinery equipment and biomedicine - reported an average annual growth of 6.7 percent last month, 2.5 percentage points higher than July's.
The bureau said Shanghai's development has reached a stage where sustainable development can no longer rely on export and labor-intensive manufacturing.
It added: "Factors such as high investment intensity, a rapidly aging population, negative natural population growth and land constraints should push Shanghai to take the lead in shifting its drivers of growth by developing services and encouraging innovation."
Such a trend is confirmed by figures from the service sector. Last month, investment in services jumped 13.4 percent from a year earlier, while manufacturing recorded an investment decline of 15.3 percent.
Source:shanghaidaily