Shanghai will overcome its economic difficulties and maintain steady GDP growth, Mayor Han Zheng said yesterday at the opening of the annual meeting of the municipal people's congress.

"The target for GDP growth this year is 9 percent, and we're aiming to keep the unemployment rate under 4.5 percent."

Shanghai has been suffering from a serious economic slowdown since September, he said.

"We are seeing negative growth on fiscal revenue, industrial output and exports, and there is increasing pressure on employment," he said.

"These are hard times for the city, but a slew of policies and measures will help business and boost consumption."

Last year, the city's GDP grew 10 percent, 2.6 percentage points less than in 2007, while exports grew 17.1 percent, Han said.

This year, Shanghai will do all it can to help local firms, especially small- and medium-sized ones, survive the financial crisis.

Policies to help SMEs get access to loans and ease their tax burdens should be introduced soon, he said.

SMEs will also be encouraged to list on the stock market, he said.

"We will also push ahead with Shanghai's international financial center initiative," Han said.

The city will also continue to be innovative and develop its bond, futures and financial leasing markets, he said.

In forming a cluster of key financial resources, Shanghai will put emphasis on attracting foreign financial institutions, shareholding investments, risk investments, assets management, and launch a trial for the yuan's international settlement, he said.

Han also stressed innovation in development, and giving full support to cooperation on technological innovation at universities, research institutions and private firms.

More incentive policies will be released to encourage innovation, and government departments will be able to offset their taxable income when buying products from such projects, he said.

The government will increase spending on major construction projects and social welfare schemes, and control costs, he said.

"In 2009, there will not be any rise in government spending on conferences, receptions, visits abroad or cars," he said.

Cai Yongkang, chairman of the privately owned Shanghai Huacheng (Industry) Group and an NPC delegate, said he was happy to hear Han's promise to help SMEs.

"It is a boost to our confidence," he said.

Zhu Hongchao, also a delegate, said if the Shanghai government wants to create jobs it should set up a fund to encourage people to start their own businesses.

(China Daily January 14, 2009)