"With the global economy slowing, we boosted domestic demand to keep the economy on an upward track," Pan Jianxin, director of Shanghai Statistics Bureau, said at a news conference yesterday.

Thanks to robust performance by industrial firms, buoyant consumer spending and investment, the city's gross domestic product last year totaled 495 billion yuan (US$60 billion), Pan noted.

Fixed-asset investment hit a record high of 198.4 billion yuan, an increase of 6.1 percent from a year earlier.

Noticeably, investment by state-owned companies dropped 6.7 percent, while private investment rose 16.4 percent from a year ago, Pan said.

"After the terrorist attacks in the United States, businessmen were looking for a safe place for their investment," said Pan. "Shanghai is the best candidate city for overseas companies to enter the mainland market in China."

Investment from multinational corporations in large-scale, high-tech projects is emerging. ACE Semiconductor, for example, is investing US$1 billion in a plant in the city, while SECCO Petrochemical is currently working on a US$2.7 billion project.

"Though the impact of China's entry into World Trade Organization is uncertain, and the global economy isn't expected to rebound quickly, I am optimistic that Shanghai will maintain the momentous growth this year," said Pan.

Municipal government is rolling out a series of policies in reaction to waning exports that stem from the global economic slowdown, which has hurt many of the city's biggest trading partners. Officials want to turn Shanghai into an international procurement center, and are working to cut down on bureaucratic red tape, Pan said.

Economic experts said that investment, from both the public and private sectors, will be the major driving force behind the city's bullish growth.

"Fixed-asset investment is a strong engine for the economy, while the real estate sector is a bellwether of growth," Zhang Youwen, deputy chief of the Shanghai Academy of Social Sciences' Finance Institute.

Zhang predicts the city's property market will remain strong this year.

"This year, Shanghai will also cash in on years of huge investment in infrastructure," he added.

Shi Liangping, chief of East China University of Science and Technology's Economic Institute, insisted that the city's industrial sector will be the main force behind Shanghai's bullish economy.

Led by rapid expansion in the electronics, information technology and auto manufacturing industries, value-added output at local industrial firms rose 12.4 percent to 212.8 billion yuan last year, while profits rose 12.3 percent to 44.7 billion yuan.

Hurt by the bearish stock market, the value-added output of the city's finance and insurance sector only edged up 2.1 percent to 68.5 billion yuan last year - about 1 percentage point lower than expected.

(eastday.com February 7, 2002)