Overview of Shanghai Industry Economy

      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.