Shanghai economy shines against bleak backdrop

The city's GDP achieved 8.1 percent last year to reach 4.32 trillion yuan.

Photo from CFP

Photo from CFP

By XIN Yuan


Shanghai’s GDP in 2021 rose 8.1 percent to 4.32 trillion yuan (US$681 billion), the highest among China’s cities. Per capita disposable income increased in pace with GDP to just over 78 thousand yuan, also the highest in the country.  

Economist LIU Bin told Jiemian that Shanghai had entered a new phase of economic development. There is still untapped potential in foreign trade.

CHEN Bo, professor in economics at Huazhong University of Science and Technology assigned special meaning to this landmark achievement by Shanghai’s economy which is seeing stable improvement in its development level, manufacturing and tertiary sectors.

Against the bleak backdrop of a pandemic, Shanghai realized high-quality development. What are its secrets?

New drivers continue growing

As the bulk of the economy, manufacturing is strong support to a city’s capacity and core competitiveness. Shanghai’s industrial added value in 2021 exceeded 1 trillion yuan for the first time, towering above all other cities in China. Its total industrial output reached just over 4.2 trillion yuan.

The Shanghai Solution - integrated circuits, biomedicine, and artificial intelligence – has seen remarkable progress. The combined output of the three industries increased to 325 billion yuan, up by 18.3 percent - 11.6 percent in biomedicine, 24.1 percent in integrated circuits.

In terms of integrated circuits, according to Chipinsights’ rank of competitiveness of all mainland cities, Shanghai is rated as the first of the list, taking into consideration of 6 indicators of overall industry size, industry chain, demand, policy, innovation and industrial vitality. 

Shanghai’s integrated circuit sales hit 250 billion yuan last year. The city now homes more than 700 chip businesses. The Zhangjiang national innovation demonstration zone represents a fifth of national output. In biomedicine, after surpassing the 600-billion-yuan last year, the biomedicine industry is expected to hit 700 billion yuan in the coming year.

In September 2021, the city published the 14th Five Year Plan for Advanced Manufacturing in which the three industries take the lead, and the six other industries of information, health, automotive, high-end equipment, advanced materials, and fashion are given a considerable push.

First-store economy to boost consumption

More than 1,000 first stores, nationwide or worldwide, were added in Shanghai last year, said the municipal government’s work report. That figure contributed to 13.5 percent growth in the retail sales in consumer goods, 1 percent higher than the national average.

The first-store economy serves as a new stimulation to consumption. First stores used to be opened in cities like London and Singapore, but companies are now choosing mainland China as the venue for their first stores.

According to the 2021 China’s First-Store Economy Development Report by Dataquest China, Shanghai has been the favorite city for many years and has the most first nationwide stores in the country. Shanghai is the choice for international brands to enter the mainland and homegrown brands to incubate new lines and businesses, as well as a base for the new consumption industry. In addition, the spill-over effect of Shanghai’s first stores has benefited other cities, such as Hangzhou and Ningbo, in the Yangtze River Delta region, in their efforts to develop their own first-store economy.   

More foreign investment against the odds

During the pandemic, Shanghai continues attracting foreign investment. In 2021, the actual use of foreign investment increased by 11.5 percent to over $22.5 billion. With 60 new ones, it is now home to headquarters of 831 multinational companies. It also houses a total of 506 foreign-funded R&D centers with 25 added in the past year. The city’s foreign trading volume expanded by 16.5 percent to more than 4 trillion yuan.

Liu pointed out that Shanghai has been singled out as a preferred locale for FDI, both globally and domestically, by its high-level digital and smart ICT configuration presented in the process of epidemic response, in addition to its years of relentless efforts in improving the business environment. Particularly, the financial, shipping, technology and modern services have become the major areas drawing foreign investment.

Moreover, the container throughput in Shanghai Port amassed an annual volume of more than 47 million TEUs in 2021, ranking the first for 12 years in a row. It remains the port with the highest trading volume in the world. Seven commodity platforms in Shanghai have stepped onto the 100-billion-yuan level.

These achievements testify and reinforce Shanghai as a global trading center with effective facilities, improved trading structure, growing trading capacity, enhanced attractiveness to global resources, and more salient city function for trading, said Liu.