"We did have some disadvantages to renew the city's economic growth in the first quarter, but the city's robust industrial growth and fixed asset investment - particularly in infrastructure and real estate - helped maintain steady advancement," said Chen.

During his 2-hour report, Chen said that the city's economy grew by 10 percent during the first half of the year to 252 billion (US$30.4 billion) compared with the same period last year. That growth rate beat the city's target of 9.6 percent and is 2 percentage points higher than the national average.

The mayor explained the city's economic growth was held back by bearish domestic stock markets, increasing labor costs in the city and the need to reform Shanghai's economic structure and reduce unemployment.

He indicated that the first half of the year saw fixed asset investment increase by 32 percent over the same period last year, while industrial added value climbed 11.3 percent.

Growth during the first six months of the year was spurred by start of several large infrastructure projects, said Chen. Among them: construction of a multi-billion yuan deep water port project, work on a massive development plan for the waterfront along the Huangpu River, and extensive construction on new local metro lines.

Those projects, and several related smaller projects will open the door to increased foreign investment through international bidding, said Chen.

"Another immediate measure to ensure Shanghai becomes an international financial center is to convince multinational companies to shift their regional headquarters to the city," said Chen.

The city will focus on attracting the headquarters of companies with at least US$400 million in assets, a total investment in China of not less than US$30 million yuan and investment in at least three companies in the country.

"So far, more than 20 multinational companies have shown us their willingness to relocate to or establish their regional headquarters in Shanghai. Hopefully many of them will come within the year."

In order to attract more foreign investment, Chen said the city will keep a close eye on labor and business costs in neighboring areas and try to adjust local cost to remain competitive.

Chen said the city will also greatly facilitate the completion of customs procedures by the year's end. A pilot project in Songjiang District and the Waigaoqiao free-trade-zone hopes to see customs' procedures completed within 4-6 hours by December, instead of the 2 to 3 days they currently take.

In related news, Shanghai's consumer price index edged up 0.2 percent in July from the same period last year, the Shanghai Statistics Bureau announced yesterday.

(eastday.com August 16, 2002)