Meanwhile, the city is pledging to further open its service sector and lure more investment from top companies in tertiary industries, such as logistics, medication and real estate.

The city reported exports worth a record US$32.1 billion last year, a 16 percent increase over 2001, and well above predictions of US$29 billion made at the beginning of last year.

Imports were valued at US$40.6 billion, up 22 percent year-on-year, officials announced yesterday.

The city's trade deficit expanded 50 percent to US$8.6 billion from 2001.

"The city's foreign-invested companies were the main growth engines, and the city's efforts to raise Customs efficiency, expand trade rights and promote international procurement also helped,"said Zhu Xiaoming, director of the Shanghai Foreign Economic Relations and Trade Commission.

He isn't worried about the growing trade deficit as many of the imports were equipment needed for manufacturing.

Among the exporters, overseas-funded companies exported US$19.2 billion worth of goods last year, up 20 percent year-on-year. They accounted for nearly 60 percent of the city's total.

Taiwan-based Tech-Front (Shanghai) Computer Co. Ltd. led the way with exports valued at US$883 million last year. Intel Products (Shanghai) Ltd. was the city's second-largest exporter. The two companies topped Shanghai Silk Group, the city's biggest exporter for years, for the first time.

In 2003, the city government hopes exports will hit US$34 billion, and total trade volume will rise by 10 percent to reach US$77 billion.

"Those are still conservative estimates as there are uncertainties in the global economy," said Tang Qingfu, a commission spokesman, referring to a possible war against Iraq and volatile oil prices.

Meanwhile, Shanghai expects to see a 10 to 20 percent growth in overseas investments this year.

Last year, Shanghai received US$10.6 billion in contracted overseas investment, up 43.4 percent year-on-year. Actual investment was US$5 billion, up 14.5 percent.

The service sector garnered US$3.6 billion in contracted overseas investment last year, up 93.6 percent and accounting for 33.78 percent of the city's total.

"This year, the service sector will see a jump in attracting overseas investment and Shanghai will continue to consolidate its manufacturing sector," said Liu Jingpin, a spokesman of the Shanghai Foreign Investment Commission.

(Shanghai Daily January 15, 2003)