Shanghai needs to push investment in infrastructure, expand domestic consumption and aid threatened enterprises as it strives to help its citizens and businesses survive the global economic downturn, Mayor Han Zheng said recently.
Speaking at the annual session of the Shanghai People’s Congress (SPC), Han noted that city government will work to create 500,000 jobs this year and control the unemployment rate to within 4.5 percent. Last year it was 4.3 percent.
The city is targeting 9 percent growth in its gross domestic product for 2009, which is about 1 percentage point below the estimate for 2008.
Meanwhile, fiscal revenue is expected to fall off dramatically as a result of the financial downturn, tax breaks designed to stimulate the economy and other factors. Fiscal income is forecast to grow only 6 percent, compared with 13 percent last year.
“Given Shanghai’s high level of openness and its extensive economic links, the city is facing a double challenge from a complex and turbulent external environment,” Han told SPC deputies, referring both to China’s ongoing economic reforms and the present world financial crisis.
“We must fully appreciate the severity and complexity of the economic situation, while remaining confident that we will emerge victorious. We know that the crisis will end,” the mayor said in delivering his government work report to the opening session.
To help overcome the financial challenges, the mayor said the city plans to put pro-business policies into effect, such as interest rebates for small and medium-sized enterprises (SME).
In addition to helping smaller firms, the city government also plans to stimulate the economy by advancing the schedule of some infrastructure projects.
For instance, Metro construction will speed up. Metro Line 7, the second phase of Line 8 and Line 9 and the first phase of the north section of Line 11 will be put into operation by the end of this year.
Han said consumption, especially consumer spending on housing, culture, entertainment, training and sports, will also be encouraged as an impetus for sustained economic development.
Urban disposable income jumped 13 percent to 26,690 yuan (US$3904.85) per capita last year, according to Han’s report.
But the city’s economy suffered a sharp downturn as the global economic crisis took hold. Declines unseen in years were reported in fiscal revenue, industrial output and exports.
Among other possible solutions proposed, SPC deputy Li Shaoping suggested that the city government boost domestic consumption by distributing vouchers to local citizens.
“With the vouchers, people could buy daily necessities to improve their lives,” Li said.