Shanghai manufacturers are expected to realize a 12 percent growth in value-added production this year - slower than last year's 16.1 percent, Shanghai Economic Commission said Monday.

It targets a 9 percent growth in retail sales. Last year saw 9.1 percent growth.

"Local manufacturers are still the pillar to support Shanghai's economic development," said Shanghai Mayor Han Zheng Monday.

"We will take a scientific view on the city's development, coordinating everything from employment, environment protection, resources to industry restructuring," Han said.

The city aims to realize value-added production of more than 300 billion yuan (US$36 billion) this year.

Shanghai retail sales are likely to hit 240 billion yuan and retailers are optimistic about the forecast.

"The company is going to open chain department stores, shopping malls and specialty stores in the city to boost sales and the brand name," said Wang Zongnan, president of Shanghai Bailian Group Co Ltd, China's biggest retailer.

Investment in manufacturing and commercial sectors will total 90 billion yuan this year, the commission said.

The city is hailing foreign and private capital to join state-owned firms to support development of key industries.

Shanghai Electric (Group) Corp, China's biggest industrial equipment manufacturer, joined hands with state-owned Shanghai Baosteel Group Corp, Shenergy Co Ltd, and private investment firms last month to found Shanghai Electric Group Co Ltd.

"State assets will support the development of key industries," said Xu Jianguo, director of Shanghai Economic Commission. "At the same time, the market will open wider to foreign investors as they will help upgrade the whole industry."

Xu said Shanghai hopes to attract more multinational regional headquarters, procurement, and R&D centers. "The city welcomes foreign funds in restructuring of state-owned companies.

"Private companies which have an edge in technology innovation are allowed to invest in more industries, especially in the service sector," Xu added.

(Shanghai Daily March 2, 2004)