Shanghai surprises with 7% growth in H1

Though an early bird of the nation's economic restructuring, Shanghai took seven years to achieve a GDP growth that corresponded with the national average of 7 percent, official data revealed on Thursday.

During the first six months of this year, GDP growth in Shanghai edged up to 7 percent, higher than the first-quarter reading of 6.6 percent, according to the Shanghai Municipal Statistics Bureau.

During the same period, Shanghai made remarkable progress in economic restructuring, with a significant growth in support from the tertiary industry. Official data showed that the added value of the tertiary industry, which includes finance, information technology and modern service sectors, grew 10.2 percent year-on-year, accounting for 67.1 percent of the total GDP and contributed about 90 percent to the city's economic growth, according to the Shanghai Municipal Development and Reform Commission.

This is much higher than the national data. The added value of the tertiary industry contributed 49.5 percent to China's GDP, according to the National Bureau of Statistics.

Sun Lijian, a professor with Fudan University, said Shanghai's consistent economic restructuring has finally borne fruit. "The restructuring process often comes with some growing pains, such as a temporary slowing of growth, especially when the former mainstays fade and new growth points are still in the infant stage," Sun said.

Liu Shengjun, deputy director of the China-Europe International Business School Lujiazui International Finance Research Center, said: "Being the nation's first city to conduct industrial restructuring, Shanghai has experienced its most difficult period."

Shanghai maintained a higher-than-nationwide GDP growth from 1992 to 2007, but fell below the national average for seven consecutive years since the financial crisis broke out in 2008. Even in 2014, when China's GDP growth slowed to 7.4 percent, Shanghai's economic pace was at a lower rate of 7 percent.

China's economic growth slowed to 7.4 percent last year, the lowest since 1990, a result of the country's restructuring reform and economic transformation, according to experts.

According to the city's statistics bureau, the city has overcome the headwinds and achieved stable growth in its economic performance. During the first six months, Shanghai's GDP, or gross domestic product, expanded at a rate of 7 percent year-on-year to 1.19 trillion yuan ($191 billion), while the consumer price index moved up 2.4 percent, down 0.2 percentage points from a year ago.

By adapting to the "new normal"－a phrase introduced by President Xi Jinping to describe slower growth, but of better quality－and raising the quality and efficiency of economic development, the city has achieved a better-than-expected economic result in the first half, finishing its half-year tasks ahead of time.

Tang Huihao, the bureau's chief economist, said: "Shanghai has overcome a series of negative factors this year, such as the dwindling overseas and domestic demand and the significant fall in industrial growth."

Sun from Fudan University, however, still remains positive on the city's future economic prospects, especially regarding the city's China (Shanghai) Pilot Free Trade Zone and its latest ambition of becoming a globally influential center for technological innovation.

"Shanghai will be the biggest gainer from tourism, a sector that has immense growth potential in China," said Liu. After the opening of the Shanghai Disney Resort in early 2016, the city's economic growth will gain new traction.

Shanghai did not make GDP growth an objective for the first time this year, becoming the first local government to do so.