Shanghai is setting a higher economic bar for itself for 2020. The city's mayor told the local legislature this week that Shanghai is aiming to hit at least a 6 percent GDP growth this year. To achieve this, Shanghai will apparently focus more on tapping into foreign investments and increasing its exports.
Shanghai Mayor Ying Yong addressed the People's Congress on Wednesday, stating that they will be opening up the city's markets to high-end foreign industries, giving them a more important role in driving Shanghai's economy. This is expected to further boost export numbers, allowing the city to reach and exceed its targets. Ying also vowed to add at least 500,000 new jobs this year to keep Shanghai's unemployment rate below 4.3 percent.
Economists have stated that the bold claim could be achievable given the current geopolitical situation, effectively turned around by the recent signing of a phase one deal between China and the United States. Shanghai had quite a hard time hitting its targets in 2019 as it had struggled under the escalating trade tensions between two of the world's largest economies.
Last year, Shanghai only managed to increase its economic output by 6 percent, a bit shy below analysts' estimates of a 6.5 percent GDP growth rate. The rate of GDP growth last year was the city's slowest pace since 1990.
Analysts have repeatedly blamed the ongoing trade way for the lower output as it essentially pummeled export-oriented companies that had to deal with increasing tariffs and continued uncertainty. With the easing of tensions between China and the United States, Ying expects 2020 to be a much better year for the city's economy.
Despite the effects of the trade war affected its performance in 2019, Ying revealed that the city still managed to report a growth in foreign direct investments. Last year, the city managed to increase foreign direct investments from $17.8 billion in 2018 to $19 billion. This represented a 7.1 percent year-on-year increase.
Ying credited the increased amount of foreign direct investments on the city's newly expanded Lingang Free Trade Zone. The free-trade zone is currently the home of Tesla's first manufacturing facility, dubbed the Gigafactory 3 or Shanghai Gigafactory.
Shanghai is expected to attract even more foreign investments this year given the recent approval to set up a duty-free area in Lingang. Analysts have pointed out that Lingang is slowly become one of China's biggest investment hubs, moving to a scale similar to that of Hong Kong.
