In 2017, the industry system in Shanghai took advantage of the favorable economic situations to actively explore the market and increase production, while overcoming the adverse effects of high benchmarks during the same period of last year. In general, the performance of all industrial enterprises above designated size in Shanghai was stable and growing.

Key Indicators, 2017 

      1. Industrial production was better than expected. From a year-round perspective, the total industrial output in Shanghai increased 6.8%, and the industrial added value rose6.8%, which were the result of industrial transformation and upgrade over the years, as well as of improved environment and lower benchmarks of the same period last year.

      (1) 9 out of 13 major industries achieved growth, and the automotive, electronics and machinery industries with an annual output value of over RMB500 billion grew rapidly.

      First of all, the auto industry grew 19.1%, while the national average only increased 3.2%. This year, the market demand for replacement was strong, and new and high-end products became the driving force. In particular, SAIC Motor Corporation introduced a number of mid- to high-end models, new energy vehicles and intelligent networked vehicles, including RX5, eRX5 and Cadillac, which met consumer needs for upgrade.

      Second, the electronics industry reported an increase of 8.6% industry. On the one hand, it was supported bythe growth in shipments and production of Apple products (including iPhone8 and new Macbooks), which led to the rapid expansion of Quanta, Changshuo and other OEMs. On the other hand, integrated circuit companies sawfast growth, represented by HuahongHongli, TSMC, Huali Microelectronics, Anchong Electronics and other key players.

      Third, the machinery industry grew 6.5%. On the one hand, due to the cyclical growth of the domestic market and the improvement of export markets, the excavator index showed a U-shaped curve. For example, Shanghai Sany Heavy Industry Co., Ltd. and Longgong Forklift Co., Ltd. all witnessed roaring production. On the other hand, robot manufacturing maintained a high pace. FANUC Robots, ABB Robots and other key enterprises achieved rapid growth. 

Output growth in major industries, 2017 

      (2) The total industrial outputs of major industrial districts in Shanghaiall increased in 2017, among which, Songjiang District, Jiading District and Pudong New Area featured rapid growth, driven by Quanta, Changshuo and the automotive industry, while Jinshan District was accelerating driven by chemical, electronics and IT industries. 

Output by district, 2017 (by geographic jurisdiction)

      (3) From a national perspective, the growth rate of industrial added value in China and in the eastern region both picked up. Affected by high benchmarks in the fourth quarter of 2016, the cumulative growth rate of Shanghai's industry in 2017 was ranked 6^th in East China. 

       2. Strategic emerging industries boasted rapid growth. In 2017, the total output of strategic emerging manufacturing in Shanghai was RMB104.6 billion, representing a comparable increase of 5.7%, and the share of enterprises above designated size was 30.8%. 

Output growth of strategic emerging manufacturing in Shanghai, 2017

      3. Industrial profits and taxes reported rapid growth. In 2017, Shanghai’s industrial profit among enterprises above designated size increased 10.5%. From a national perspective, it was mainly driven by three factors, namely cost reduction, accelerated production and rising product prices. In 2017, the margin of industrial enterprises in Shanghai was 8.6%, ranking 2^nd in East China (the average was 6.5% in China, 6.6% in East China and 9.8% in Beijing). Concerning major industries in Shanghai, the profit of petrochemical industry increased 67.3%, driven by the rebound in product prices; that of electronics industry increased 36.9%, mainly due to the increased output of TSMC and Changshuo; and that of machinery industry inflated 13.4%, supported by accelerated production and sales as well as steady and rising prices.

      In 2017, industrial taxes increased18.8% year-on-year, which accounted for 28% of Shanghai’s tax revenue and contributed 55% of tax growth, effectively making up for the declines in financial and real estate sectors. 

Industrial profit growth in major industries, 2017 

       4.     Investments in manufacturing continued to rise. In 2017, industrial investment in the city was 103.17 billion yuan, an increase of 5.3% year-on-year. Shanghai’s manufacturing investment realized a positive turnaround in 2016 and experienced a steady recovery after volatility in mid-2017. The total investment was RMB79.33 billion in the year, an increase of 4.2% year-on-year. During the year, Shanghai’s investment in technological renovation reached RMB62.93 billion, accounting for 61% of industrial investment, which represented a year-on-year increase of 1%. There were 951 newly-started projects in Shanghai, 208 over the same period of last year, amounting tothe investment of RMB37.96 billion, an increase of 21.9% year-on-year, maintaining rapid growth. The new start-up projects include the construction of SMIC’s 12”Chip SN1 and SN2 Plants, the new model renovation of Shanghai Volkswagen Anting No. 2 Plant and the structural optimization of Bao steel’s silicon steel products.

      5. Industrial exports accelerated quickly. In 2017, led by the electronics industry, Shanghai’s industrial export among enterprises above designated size reached RMB776.5 billion, showing an increase of 6.6%. On the one hand, the electronics industryaccounted for 55% of Shanghai’s industrial export and grew 8.8%, mainly driven by the increased shipments of Apple products. The export orders of Quanta and Changshuo both expanded significantly, while the growth rate declined. On the other hand, due to lower benchmarks in the same period of last year (i.e., in 2016, the export value of industrial export among enterprises above designated size decreased 4.7%), this year saw recovery in growth.

      In 2016, the industry economy in Shanghai showed the followingfeatures: "two increases"," two reductions", "two bests" and "two news".

      I. "Two increases": Industrial production& industrial investment

      i. Industrial production turned from negative to positive. In 2016, Shanghaiindustrial operation was higher in thelate stage. The downward pressure on the first half of the year was relatively large, the cumulative drop of the industrial added value was 4.7%.In the second half of the year, with the further increase of steady growth and the effect of national consumption policy, the annual above scale industrial added value increased by 1.1% (total above scale industrial output value was 31083 billion yuan, a comparable increase of 0.8%), and the growth rate was higher than 5.8 percentage points in the first half of the year.

      The strategic emerging industries grew against the trend.In the 1-12th month, the total output value of strategic emerging industries increased by 1.5%, which was 0.7 percentage points higher than that of the city's industrial output.Among them, the new energy vehicles achieved rapid growth; bio medicine, new generation of information technology, new energy and energy conservation and environmental protection was growing steadily. 

      Output growth of manufacturing industry in strategic emerging industries (Jan.-Dec.)

      ii. Industrial investment changed from negative to positive.Based on the landing of large projects, the industrial investment rose every month, achieved growth in September, reversing the consecutive 28 months of decline in industrial investment. In 12months, industrial investment increased by 2.3% over the same period. The proportion of technological transformation investment continued to rise, accounting for 60% of industrial investment, up 1 percentage points from the same period last year.The support from large project investment was obvious. There were 612 projects with a total investment of more than 100 million yuan,the total investment of which was 77.8 billion yuan, with an increase of 13.1%. There were 70 projects with a total investment of more than 1 billion yuan, which had completed an investment of 28.4 billion yuan, with a year-on-year increase of 28.5%.Projectsof SMIC(Semiconductor Manufacturing International Corporation), EDO(Everdisplay Optronics), and HLMC(Shanghai Huali Microelectronics Corporation) had increased the stamina of industrial development.

      II."Two reductions": Energy conservation and structural adjustment 

      iii. New breakthroughs in energy saving and emission reduction: In 2016, 5 parks including Shanghai Chemical Zone were promoted to launch green industrial parks. At the same time, progress was made in industrial energy saving projects, clean production, and clean energy substitution of coal-fired boilers. From January to December, the energy consumption of the industrial units above scale reduced by 2.82%, and the annual target was successfully completed. 

      The main work of energy conservation and emission reduction in 2016 

      iv. The industrial structure adjustment was overdone.According to the requirements of"1350 action plan for key areas of Shanghai industrial restructuring" and the "13th Five-Year plan of Shanghai industrial restructuring", relevant units persisted in locking blocks, locking items, locking time and locking responsibility subjects.In 2016, there were 1176 projects of the adjustment and implementation of the city's industrial structure, 8 key areas startedadjustment, 11 key areas were promoted in the early stage. By the end of December, all the tasks determined by the industrial structure adjustment in the city were overdone. 

      Completion of target indicators for industrial structure adjustment in 2016

      III. "Two bests": Quality and efficiency, producer services and software information services.

       v. The quality and benefit of industry was at a good level.Shanghai’s manufacturing industry was accelerating its transformation, paying more attention to the high end, efficiency and efficiency. While the production growth was slowing down, quality and efficiency were still at a good level.From January to December, the city industrial profit was 289.9 billion, increased by 8.1%.The above scaled industrial sales profit rate reached 8.6%, ranking top in the country, which was significantly higher than the national average (6%) and the average level (6.3%) in the eastern region.The rate of industrial production and marketing reached 99.9%, also ranking the top in the country.

      vi.Producer services and software information services industry maintained a relatively fast growth.The transformation of manufacturing industry brought the change of connotation.Traditional manufacturing began to transform to "manufacturing + service" and "manufacturing + informatization".From January to December, the ten key areas of producer services achieved a revenue of 1830.9 billion yuan, an increase of 12% over the same period last year.Software information service business revenue reached 690.4 billion yuan, an increase of 14.1% over the same period. 

      Revenue growth in key areas of producer services(Jan.-Dec.)

      IV."Two news": policy innovation and mechanism innovation

       vii.New progress had been made in policy innovation.The policy of innovation was made the core of the government to promote the supply side structural reform, it was alsoakey in the development of industrial innovation and transformation.What's more, a number of programmatic documents were intensively introduced in "Internet plus", the supply side structural reform, transformation and upgrading of manufacturing industry, and "China manufacturing 2025". 

      A list of important policy documents published in 2016 

      viii. There were new breakthroughs in mechanism innovation.In order to break through the bottleneck of industrial development, the mechanism innovation would be realized in the reform of the examination and approval system, the promotion of the technological transformation of the enterprises outside the planning industrial area and the intelligent manufacturing. 

      Major mechanism innovation document in 2016 

    The year of 2015 is not only the concluding year of the 12th Five-year Plan, but also key to Shanghai´s essential stage of development and transformation. Facing dual challenges of tightening external environment and enhanced internal constraints, the industrial sector in Shanghai accomplished positive progress by focusing on innovation-driven development and economic transformation and upgrade. It broke through the bottleneck in transformation,reshaped its competitive advantages, changed its growth drivers and optimized its economic structure. Therefore, oriented by quality and profitability, it accelerated the structural reform at the supply side, stabilized the growth rate, fine-tuned the structure and drove the transitions.