New driving forces in Shanghai’s industrial development, the digital economy and other areas have emerged as bright spots in the bleak picture painted by the city’s first-half economic data released today.

Battered by outbreaks of Covid-19 as well as a complex and severe external environment, Shanghai’s gross domestic product tumbled 5.7 percent in the six months ended June 30 from the same period last year to CNY1.93 trillion (USD286.5 billion), according to data released by the city’s statistics bureau today.

However, June’s strong data indicates that the economy is on the rebound and there were a number of strategic industries that are proving to be strong new growth drivers.

The city's economic output contracted in the first half but June’s data is worthy of note, Ma Haiqian, deputy dean at Shanghai Academy of Development & Reform, told Yicai Global. Many indicators performed well last month. For example, 69 percent of the city's 35 industrial sectors realized growth, she added.

Covid-19 is an external influence and although it caused a huge short-term shock to the city’s economy, the underlying forces and supporting power for economic growth are still there, she said.

Shanghai is rapidly incubating and strengthening new growth drivers. Last year the city’s added value of industries above a designated size topped CNY1 trillion (USD148 billion).

This year, the added value of industries plunged 11.3 percent year on year in the first six months, but this was still a gain of 5.3 percentage points from the first five months, buoyed by June’s 13.9 percent year-on-year growth, according to the bureau.

Despite the impact of Covid-19, three manufacturing sectors managed overall expansion of 4.3 percent. Among them, the integrated circuit and artificial intelligence sectors saw their productivity soar 13.3 percent and 14.7 percent respectively.

It is these new growth drivers that provided momentum in the first half, Ma said. The city's total output value of strategic emerging industries dipped just 2.1 percent in the first half from the same period last year to CNY717 billion (USD106.5 million). This is much less than the 7.6 percent decline among the industries above a designated size.

Output in the new energy vehicle sector surged 57.2 percent, and that in the new generation of information technology sector by 8.2 percent. Information services and other sectors of digital economy reported growth despite the overall economic slowdown.

Source: Yicai