by FAN Yicheng

Shanghai's economy grew 5.5% year on year in the first nine months of 2026, supported by technology manufacturing, financial services, investment and foreign trade, despite a decline in retail sales.

GDP reached 4.33 trillion yuan, according to figures released by the Shanghai Statistics Bureau on October 22. Services, which account for nearly 80% of the city's economy, grew 5.7%.

ZHAN Yubo, deputy director of the Institute of Economics at the Shanghai Academy of Social Sciences, told Jiemian News that strategic emerging industries were helping sustain Shanghai's growth.

Manufacturing output across Shanghai's three priority industries — integrated circuits, artificial intelligence and biomedicine — rose 17.1%. AI manufacturing led with growth of 24.8%, followed by integrated circuits at 23.4% and biomedicine at 7.9%.

Output value in the new energy vehicle industry rose 26.7%, while that in new energy and high-end equipment increased 15.8% and 9%, respectively.

Zhan said the figures reflected a shift toward more advanced manufacturing, with investment increasingly directed toward industry, technology and new infrastructure.

Industrial investment rose 21.9%, far outpacing the 4.3% increase in overall fixed-asset investment. Investment in high-tech industries grew 30.6%, while urban infrastructure investment increased 23.3%.

Services provided another major source of growth. Financial services expanded 9.5%, while information transmission, software and IT services grew 8.9%. Together with industry, the two sectors accounted for more than 70% of Shanghai's economic growth, according to the report.

FENG Xingdong, dean of the School of Statistics and Data Science at Shanghai University of Finance and Economics, told Jiemian News that finance provided scale and stability, while information services offered faster growth and room for expansion.

Zhan also pointed to closer links between services and manufacturing. Software supports industrial digitalization, he said, while financial markets channel funding to technology companies and businesses engaged in foreign trade.

Goods trade rose 17.9%, with exports increasing 22.3% and imports 14.4%. AI-related products, including chips, memory components and servers, helped drive exports, alongside electric vehicles, lithium-ion batteries and solar cells.

Feng said overseas demand was helping manufacturers absorb output despite softer local spending on goods.

Shanghai attracted $11.59 billion in utilized foreign investment in January-August, up 6.9%. The city also added 44 regional headquarters of multinational companies and 39 foreign-funded research and development centers during that period.

Consumer spending presented a more mixed picture. Retail sales fell 1.1% to 1.22 trillion yuan in the first nine months. Excluding automobiles, sales rose 1%.

Among larger retailers, clothing, footwear and textile sales increased 6.2%, food sales rose 4.9% and furniture sales grew 7.4%.

Feng cautioned that retail figures capture goods purchases and catering revenue but exclude most spending on services, including travel, entertainment, education and healthcare. Looking only at retail sales could therefore understate consumption in a city with a large services economy, he said.