(Yicai Global) Jan. 12 -- Shanghai's gross domestic product is likely to expand by more than 5.5 percent this year, Mayor Gong Zheng said in a government work report released yesterday.

The economic growth target takes into account the increasing risk of a global recession, shrinking domestic demand, inadequate supply, weakening expectations in China, and the city's own economic development stage, according to Quan Heng, secretary of the Communist Party of China Committee of the Shanghai Academy of Social Sciences. 

“This year's target can reasonably guide the expectations of the whole society, boost the confidence of all sectors, and help stabilize growth, prices, and stable employment,” Quan said.

Just like other parts of China, Shanghai will face both challenges and opportunities with its economic development, said Liu Minghua, deputy chief executive of Deloitte China and a deputy to the 16th Shanghai People's Congress.

The city’s economy has many structural advantages, including strong scientific and technological innovation capabilities, mature productive service industries such as finance, and the concentration of global high-end factor resources, that can bring momentum to its long-term, high-quality development, Liu added.

Quan noted that various fiscal, monetary, and social policies can be effectively combined and support each other this year. But fiscal policies, taxes, and fees can be cut further, and a fairer business environment can be created for some market entities, including state-owned, private, and foreign-owned ones, he pointed out. 

Shanghai's cumulative tax and fee reductions has exceeded CNY800 billion (USD118 billion) in the past five years, the work report showed.

A pickup in consumption is widely expected to play an important role this year. Shanghai should enhance the basic role of consumption in its economic development, prioritize consumption recovery and expansion, and improve Shanghai's positioning as an international consumption center, Gong added in the report.

Promoting production and development through consumption is a positive trend, Lu Lei, secretary-general of the Shanghai Information Services Association, told Yicai Global during Shanghai’s ongoing Two Sessions, the city’s most important annual political gatherings.

More effort is needed to create a relaxed atmosphere and a safe business environment to boost consumption and corporate investment, Lu added.

The annual session of the Shanghai Committee of the Chinese People's Political Consultative Conference runs from Jan. 10 to 14, and the first session of the 16th Shanghai People's Congress, the city's legislative body, which opened yesterday, closes on Jan. 15.

Editor: Martin Kadiev