Shanghai will maintain its tough grip on the property market in the second quarter to reach its annual target of "stable while dipping" house prices and carry on with its value-added tax reform trial to keep the city's growth stable, Mayor Han Zheng said yesterday.
"We have achieved stable growth in the first quarter, but we face issues like the pressure of economic downturn, inflation and the difficulties confronting small to medium-sized businesses," Han said at a quarterly workshop attended by senior local officials.
Shanghai will not loosen its curbs on the property market and will maintain all existing policies, Han said.
Shanghai Statistics Bureau data yesterday showed that the city's economic growth weakened in March as both exports and fixed-asset investment fell for the first time this year.
Foreign direct investment, however, still increased and inflation remained stable.
Exports, at US$17.3 billion, were 6.2 percent down last month compared to March last year, the first decrease since 2009, the bureau said. Imports grew 3.8 percent to US$21.3 billion, leaving total trade value at US$38.6 billion, down 0.9 percent on an annual basis.
Fixed-asset investment in the first quarter dropped 2.8 percent to US$90.6 billion, led by a 28 percent slump in urban infrastructure construction investment.
"The city's economic growth is easing at a faster than expected pace," said Li Maoyu, an analyst at Changjiang Securities Co. "Exports are weakening, fixed-asset investment is lacking impetus for growth, and the expansion of retail sales is not strong enough to drive ahead the city's economy."
Nationwide, in contrast to the city, exports rose 8.9 percent in March and fixed-asset investment grew 20.9 percent in the first three months.
Shanghai's gross domestic product rose 8.2 percent last year, the second slowest among China's provinces and municipalities because of its larger comparative base and greater dependence on exports.
Han called for a transition of the city's trade model through steps including tapping deeper into emerging markets, expanding services and having a better relationship between trade and outbound investment. He also urged more help for small businesses seeking financing.
Yan Jun, chief economist at the statistics bureau, said: "Shanghai has managed to accelerate economic restructuring, keep inflation stable, and reduce reliance on investment, exports and property market to drive its economy."
The Consumer Price Index, a main gauge of inflation, was little changed at 3.8 percent in March from February's 3.9 percent, the bureau said. In comparison, China's consumer prices rebounded 0.4 percentage points to 3.6 percent last month, refueling inflationary expectation.
Han pledged to stabilize prices, especially of food, the main driver of China's inflation in March.
Shanghai signed contracts involving foreign investment worth US$2.3 billion in March, up 2.7 percent year on year. Physically allocated foreign investment surged 46 percent to US$1.3 billion, a three-month high partly due to the Disneyland project.
Meanwhile, the bureau's Consumer Confidence Index rose 3.4 points from the previous quarter to 108.7, a figure above 100 indicating people's optimism.