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Shanghai's finance industry contributes to economic growth

(Shanghai Daily)
Updated: 2007-03-23 16:18

Shanghai's finance industry made a bigger contribution to the city's economic growth last year as its combined output increased by 17.6 percent from the previous year to 79.94 billion yuan (US$10.35 billion).

The growth rate of the city's financial revenue was six percentage points higher than in 2005, according to a report issued yesterday by the Shanghai Municipal Statistics Bureau.

The finance industry accounted for 7.8 percent of Shanghai's gross domestic products in 2006, 0.4-percentage-point higher than the previous year.

The bureau recorded less outstanding individual commercial loans by the years end, decreasing by 6.9 billion yuan on a yearly basis to 265.32 billion yuan.

Housing mortgage loans, which accounted for nearly 94 percent of the total personal loans, was about six billion yuan less than a year before.

Housing prices in Shanghai started dropping after the government tightened controls on real estate investments by raising mortgage rates and imposing higher taxes last year. As well, many investors or purchasers believe there would be more drops, so most preferred to "watch and wait."

However, the industry as a whole didn't seem to be influenced much by the fluctuating property market because more people showed interest in the bullish stocks markets.

The Shanghai Composite Index, which tracks yuan-denominated A-shares and hard-currency B chips, jumped in mid-December to the highest level since the city's bourse started trading in 1990.

The market during a week later repeatedly pushed to a 16-year high.

By the end of last year, Shanghai had nearly 2.5 million new investors in its A-share and B-share markets to join the original 38.56 million, 2.6 times more than the year before.

Companies raised 175 billion yuan from selling shares in the cities two share markets, almost quintupling that in 2005.