10% growth forecast for Shanghai's Pudong

SHANGHAI: Pudong New Area, Shanghai's flagship development zone, will maintain double-digit economic growth next year, despite the global financial crisis, its top official said on Thursday.

Unlike some coastal regions where manufacturing and exporting are the main industries, Pudong has not been hit by major company closures or large-scale layoffs, Party chief Xu Lin said at a press conference.

The sharp decline in demand from the West has had a devastating effect on labor-intensive companies, but as Pudong is home to mostly finance, hi-tech and logistics firms, it has not been affected in the same way, he said.

Although an exact forecast is not yet available, the district is confident of achieving at least 10 percent growth next year, Xu said.

Pudong's GDP accounts for about a quarter of Shanghai's total, and was earlier forecast to grow by 11 percent this year.

Despite the positive overall outlook, some sectors - real estate, carmaking and foreign trade - have been hit by the economic slowdown, Xu said.

Companies in these sectors will see their profits slide, while foreign investment and government revenue in the district are also expected to fall, he said.

One area that has suffered is the Lujiazui financial zone, where office occupancy rates have been much lower than expected, he said.

"In a bid to reduce their overheads, several major international organizations that had said they would take as many as five floors, instead opted to occupy just three," he said.

The Pudong government has agreed to increase its spending on infrastructure in the district in an effort to counter the effects of the slowdown, Xu said.

It will also help companies to weather the crisis by providing liquidity fund guarantees and lower interest rates, he said.

Tallest building

Construction of China's tallest building, the Shanghai Tower, will begin in Lujiazui tomorrow, its developers said on Thursday.

The 632-m "twisting" skyscraper will stand alongside the Shanghai World Financial Center - the current record holder - and Jinmao Tower.

Set for completion in 2014, the 14.8 billion yuan ($2.2 billion) project is expected to add weight to the city's claim to be a world financial center.

Gu Jianping, general manager of Shanghai Tower Construction and Development Co, said on Thursday: "We hope the construction of the tower will boost market confidence amid the current financial turmoil.

"It will include some very special features."

Among its many claims to fame, the 121-story building will be the greenest skyscraper in Shanghai in terms of its use of green technologies, Gu said.