Q & A for resident journalists

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1、Shanghai People’s Radio Station: Just now you have made a detailed introduction of Shanghai’s economic development in 2011. From your expert’s view, how is the overall quality of Shanghai’s economy growth in 2011? We know that the economic situation and the global environment will be quite complicated in 2012; do you have any comment on the environment and trend of Shanghai’s development in 2012?

Yan Jun: In 2011, Shanghai’s total GDP expanded by 8.2 percent. Generally speaking, we can say that Shanghai has got through the challenges of the complicated global economy and our own economic restructuring. The achievements of our efforts can be seen in three major aspects. 

Firstly, the speed of Shanghai’s economic transformation has apparently accelerated, and Shanghai has showed positive changes in the structures of both supply and demand. For example, in 2011, the tertiary industry of Shanghai accounted for 57.9 percent of the gross domestic production (GDP), 0.6 percentage point higher than 2010. On the other hand, positive changes also showed up in the industry structure—the real estate industry reached 5.3 percent in 2011, compared with 5.8 percent in 2010, while output of Shanghai’s strategic new manufacturing industry jumped by 11.5 percent from the previous year. 

In addition, the demand structure has also improved because the consumption demand was significantly higher than the investment demand. The investment structure was also better—in 2011, the total retail sales grew by 12.3 percent, which is significantly higher than the growth of investment. Although the investment growth rate is almost the same as last year, its structure has improved. The investment into the strategic new manufacturing sectors grew by 9.5 percent, significantly higher than the city’s average while that into high-energy consumption industries dropped by 16.2 percent. Among all real estate investment, that of affordable housing projects accounted for 34.3 percent, which is a big change from the past. 

The structures of import and export have also showed positive changes. On one hand, the increase of import has surpassed the export, which fit the national policy of promoting trade balance. On the other hand, the growth of Shanghai’s export of processing trade was 13.3 percentage points lower than export’s average growth. This shows that Shanghai now relies less on labor-intensive industries. 

Secondly, Shanghai’s macro-economy control has achieved good effects. In 2011, the consumer price index (CPI) of Shanghai increased by 5.2 percent, which was 0.2 percentage points lower than national average. In the housing market, the price of newly built residences has dropped by 0.3 percent, 0.4 percent and 0.4 percent in October, November and December respectively month on month. The exceedingly fast increase of housing price has been contained. 

Thirdly, the resident income increase has kept up with the economic growth. First, the growth rate of resident income was a little higher than the increase rate of GDP if we figure in the inflation factor; second, the increase rate of low-income families was higher than the average rate of the entire city; third, the income of rural residents was increased together with the urban residents.

About the outlook in 2012, I have to say that there are still a lot of uncertainties in domestic and global economies, and our country set the tone of the economic work as “move forward prudently.” Therefore, in 2012, Shanghai will keep pushing forward the innovation and transformation and accelerate economic restructuring.

2. Xinhua News Agency: I want to ask you, how big was investment’s contribution in Shanghai’s economic growth last year? What is the proportion of affordable housing investment in Shanghai’s overall real estate investment from 2009 to 2011?

Besides, we know that Shanghai’s target of economic growth in 2012 is eight percent, and Shanghai has set the same growth target for three years in a row. What’s the reason behind it? And what message does it send out through this number?

Yan: The contribution rate of investment to economic growth is an item in GDP calculation and it’s still in counting. But judging from the situation in recent years, we can say the rate has been around 45 percent. 

I just mentioned that the investment of affordable housing projects occupied 34.3 percent among the investment of residential housing in 2011. However, we didn’t carry out such calculation before 2011 so I cannot give the number out. 

For the eight percent of economic growth, actually it’s not an easy task for Shanghai. For example, to meet the demand of transformation, we have to slow down the growth a little bit. From 1992 to 2007, Shanghai had enjoyed an economic growth of more than 10 percent annually for 16 successive years. Compared with those years, now we are slowing down indeed. 

Therefore, we now keep the growth rate in a stable range. It’s good for adjusting economic structure, transforming economic development path and price control. Besides, it also fits the demand from the central government because it requires Shanghai to carry out economy restructuring ahead of other parts of the country. So, we think eight percent is a correct and proper goal for Shanghai. 

3. Eastday.com: You just mentioned some statistics about the residents’ income. Would you please introduce the detailed numbers of the income of urban and rural residents and explain those numbers?

Yan: Income distribution is a very important issue, which concerns the immediate interests of residents. I just mentioned three features of the increase of residents’ income, and now I’ll explain them one by one. 

Firstly, the growth rate of resident income was a little higher than the increase rate of GDP if we figure in the inflation. In 2011, the per capita disposal income of Shanghai’s urban and rural residents increased by 13.8 percent, which was a little higher than the city’s GDP growth if eliminating the price rises. It was the first time since 2000 except in 2009 when the price was dropping down because of the financial crisis. As we know that in 2011 the increase rate of price reached 5.2 percent, which was pretty high. 

Two kinds of income increased comparatively faster—wage income and income from transfers, which reflected the achievements of Shanghai’s development and the efforts of the Communist Party of China Shanghai committee and the Shanghai government. 

In wage income, the increase rates of urban area and rural area were 12.5 percent and 9.2 percent respectively, accounting for 67.5 percent and 67.1 percent in the total disposable income. We issued a series of policies to guarantee the wage growth last year, such as raising the minimum wage to 1,280 yuan per month. Besides, since last September, the starting point of individual income tax has also been raised to 3,500 yuan per month, which also increased the wage income a lot. 

The increase of income from transfers mainly comes from policies. In 2011, the income from transfers of urban and rural residents increased by 15 percent and 17.4 percent respectively, equivalent to 25.3 percent and 19.4 percent of their total disposal income. The income from transfers mainly includes retirement pension payment, old-age pension and other allowances. Last year we increased the basic old-age pension by more than 10 percent, and we also issued one-time subsidy to retired residents in August, about 600 to 800 yuan per capita. 

Secondly, the increase rate of low-income families’ income was higher than the average rate of the entire city. Our survey showed that the per capita disposable income of families of the lowest 20 percent in income increased by 14.7 percent, about 0.9 percentage points higher than the average increasing rate of the city. Policy factor played an important role in the rapid increase of low-income families’ income. Last year, the government introduced a series of policies, for instance, the minimum living subsidy for urban residents increased by 12.2 percent to 505 yuan. The highest standard of unemployment insurance was raised to 730 yuan, up 10.6 percent. Moreover, the government also gave 100-yuan allowance twice to families whose incomes were under the minimum living standard and aid recipients.

Thirdly, the income of rural residents was increased together with the urban residents. To narrow the gap of incomes between rural residents and urban residents, the government has introduced a series of policies to benefit rural residents. Last year, the minimum living subsidy of rural residents was lifted to 360 yuan, increasing by 20 percent. The rising price of farm products and rental rates also contributed to the increase of rural residents’ income.

4、Kyodo News Agency: You just said Shanghai’s total import and export volume from Japan increased by 16.1 percent. I want to ask how much the total import volume is? Has it increased or dropped? Did the earthquake in Japan and the radiation problems have any influences on the import and export?

Yan: Shanghai’s total import from Japan was US$34.654 billion in 2011, which was higher than any other import sources and increased by 12.3 percent. Speaking of the influence of the earthquake in Japan and the radiation problems, there was certain impact on some local processing companies as their raw materials were affected last March after the earthquake. But looking at the big picture, I think there is little influence as both the import and export volume saw a big increase. The export to Japan grew by 22 percent. They are very high figures.

5、Caijing Magazine: You have just mentioned proportion of commercial housing sales against the total GDP dropped from 5.8 percent to 5.3 percent in 2011. Then how much is the proportion of the investment for property development in GDP? How to interpret the property sales(‘s changing) proportion of GDP?

Yan: The investment for property development and its sales volumes are not parts of GDP, so you cannot compare them to generate any economic conclusion. Last year, the total investment for property development in the city was 217.031 billion yuan, increasing by 9.6 percent than 2010. The increase was driven by many factors, including the investment for affordable housing, which increased by 42.9 percent to 47.9 billion yuan and accounted for 34.3 percent of the total investment for residential housing. It also contributed 7.3 percentage points out of 9.6 percentage points of total real estate investment growth. Excluding affordable housing investment, other (commercial) housing investment growth grew by only 2.8 percent. You asked me to comment on real estate investment. I would say real estate is an important part of economic growth. Shanghai will stick to its measures to control the housing market, which should serve the need of ordinary residents’ demand for their own residency, keep the sustainable development of the real estate market and better protect Shanghai people’s interests.

6、Hong Kong Ta Kung Pao: The GDP of Beijing reached a breakthrough of 1.6 trillion yuan last year, with a growth rate of 8.1 percent. The spokesman of the Beijing Statistic Bureau said Beijing’s per capita GDP is reaching the level of a rich country. How do you comment on this news and how about the situation in Shanghai?

Yan: Per capita GDP is an important indicator to measure the economic development level of a region. In 2011, Shanghai’s per capita GDP of resident population was 82,560 yuan, about US$12,784. This number was the highest among all Chinese provinces and municipalities. We focus more on the steady development of the economy rather than reaching a certain standard. We hope the economical development would better benefit people in the city and achieve the goals of “driving growth with innovation, developing economy with restructuring.”