Shanghai mayor pledges to double city's economy

SHANGHAI: The mayor of China's financial hub Shanghai today pledged to nearly double the city's economy in five years but warned of major challenges in the wake of a huge corruption scandal.

In his annual report to the local parliament, Han Zheng said the city would aim to lift gross domestic product to more than USD 277 billion (two trillion yuan) by 2012 from about 1.1 trillion yuan last year.

The ambitious figure for the city of nearly 20 million is equal to about 100,000 yuan per capita and comes as China announced today annual economic growth of 11.4 per cent last year, the highest level in 13 years.

Han, who analysts say is likely to be replaced when the local congress announces a leadership shuffle on Monday, said Shanghai must pioneer economic reform despite the recent graft setback.

"Shanghai must take the lead in... building an all-round well off society nation-wide. Shanghai must continue to be on the front line of reform and opening up," he said.

But he also said the government faced a number of "inadequacies and weaknesses," including an underdeveloped service sector, economic bottlenecks and a widening wealth gap between rich and poor.

Han's comments appeared to confirm that Shanghai was back in the good graces of the central government after the city's top Communist Party leader Chen Liangyu was brought down in a multi-million dollar graft scandal last year.

The probe into the misuse of the city's 1.25 billion dollars in retirement funds netted more than 20 government officials and businessmen, leading to a string of tough convictions, including a suspended death sentence.