Shanghai's trade rises but output moderates

SHANGHAI'S economy showed mixed signs last month, with trade and inflation improving but industrial production moderating.

Exports rebounded after four months of easing, expanding 19.8 percent from a year earlier to US$20.28 billion in July, a record high for a single month. Imports also jumped 24 percent to US$19.34 billion, compared to June's increase of 21.2 percent, the Shanghai Statistics Bureau said yesterday.
The consumer price index rose 5.6 percent year on year in the city, compared to June's 5.9 percent, the first sign of a fall in inflationary pressure.
"This is mostly welcomed because it can give policymakers room to ease tightening measures and keep economic growth steady," said Li Maoyu, an analyst at Changjiang Securities Co.
"Shanghai's data may be a harbinger that the national inflation rate may have hit a peak in July," Li said.

China's consumer prices soared to a 37-month high of 6.5 percent in July, making it difficult for the country to fine-tune its current tight policy stance while the overall economy was moderating.
Despite the easing of inflationary pressure and better trade in the city, industrial production pointed to less vitality. It edged up 5.7 percent from a year earlier in July to 269.6 billion yuan (US$42.1 billion), weakening further from June's 6.8 percent.
Output in the six pillar industries - information technology, cars, petroleum refineries, fine steel, machine equipment and biomedicine, only rose 4.2 percent last month, the bureau said.
"It is worrisome that Shanghai is losing strength in manufacturing," said Xue Jun, an analyst at CITIC Securities Co. "The city expects services industry can lead the economic growth, but the fact is that manufacturing is the base which can create demand for services in areas including financing, shipping and design."
Xue added: "Manufacturers long for easing policies which can give them a break from credit shortages. Now, less inflationary pressure may make it possible."
Fixed-asset investment in Shanghai dropped 5.7 percent on an annual basis in the first seven months to 237.6 billion yuan, little changing from a fall of 5.8 percent in the first half of this year.
Shanghai's gross domestic product expanded 8.4 percent from a year earlier in the first six months, easing from last year's 9.9 percent. The growth was slow compared with China's average of 9.6 percent.