Chen, elected as acting mayor by the Municipal People's Congress last December, based his prediction on both challenges and opportunities the city faces in the coming year.

"The current sluggishness of the world economies has put Shanghai in a position even tougher than 1997's Asian economic crisis," Chen said.

A direct influence of the global slowdown will be on the city's exports.

Last year, the total volume of the city's exports reached US$ 27.63 billion, 9 percent higher than 2000.

"However, the probability of maintaining such rapid increases is low this year," Chen said and set a moderate target of exports at US$29 billion.

This year is the first year after China entered the World Trade Organization.

Keener competition from outside rivals in the domestic market has added more pressure on local companies, which might well influence the growth of the economy.

"To cope with all these difficulties, the city should learn to find and grasp opportunities from the challenges," Chen said.

The country's go-west campaign, and the city's bid for the World Expo in 2010 both provide arenas for the city to show its capabilities.

Great opportunities lie in foreign investment, Chen said.

The city's sound business environment is a great attraction to foreign investors, especially now when more international investment tends to go to secure regions with relatively low costs, but high profits. Shanghai has set a lofty target of US$4.5 billion in direct foreign investment by the year's end.

Following last year's successful addition of 126,000 new jobs, the city hopes to add at least 100,000 more jobs to ensure the unemployment rate is no higher than 4.8 percent.

Last year Shanghai's GDP rose 10.2 percent to 49.5 billion yuan (US$ 5.96 billion), the 10th year the city maintained an increasing rate of GDP over 10 percent.

"The steady growth in the past decade can firmly back the city's development this year," Chen said.

Industry, an important impetus for last year's GDP growth, will also increase 10 percent this year, Chen predicted.

Judging by current trends, iron, steel, petrochemical and mobile industries will become the city's most popular.

Real estate and trade and communication, the main contributors to the 9 percent increase in the tertiary industry last year, will continue with its rapid growth this year, he added.

To provide a sound environment for economic growth, Chen urged the city to further its effort to provide a secure environment and speed the transition of the government's function from administration to service.

(China Daily February 23, 2002)