Shanghai's industrial output is expected to hit 1 trillion yuan (US$120 billion) this year, propelled by strong foreign investment and heavy spending on fixed assets.

The forecast, announced yesterday by municipal government spokeswoman Jiao Yang, is based on statistics from January to October. During that period, Shanghai's industrial output topped 880 billion yuan, up 27.4 percent from the same period last year.

Local manufacturers also saw their combined profits rise 37 percent during the first 10 months to hit 74 billion yuan.

The government said that more than 99 percent of industrial goods manufactured in the city during the first 10 month have been sold, a healthy sign for the sector.

City officials gave credit to strong foreign investment for boosting the industrial production.

During the first 10 months, Shanghai approved more than 1,600 foreign investment projects in the sector, accounting for 44.6 percent of the city's total investment.

Foreign companies also signed contracts to invest a further US$6.5 billion in the city.

Among other investors, the world's largest automaker General Motors last month signed two agreements with its flagship joint venture in China, Shanghai General Motors, valued at a combined US$1.1 billion for the supply of automobile components.

Shanghai gm's annual production capacity has reached 200,000 units this year, a number it hopes to expand to 300,000 next year.

Fixed assets investment in the industrial sector hit 62.5 billion yuan in the first 10 months and will total 78 billion yuan by the year's end, securing a 13.4 percent rise year-on-year, Jiao said.

The auto manufacturing, micro-electronic, petrochemical and steelmaking sectors are four major engines propelling local industry ahead, officials said.

Shanghai has poured 10 billion yuan into infrastructure construction for the Anting Automobile Township in northwestern Jiading District over the past two years. Officials hope Anting will become China's Detroit with automobile manufacturing, sales, service and racing.

With core projects including a Formula-One circuit, used-car market, and auto sales zone, the township had attracted 20 billion yuan in investment as of September.

As an engine for city's economy, Shanghai Automotive Industry Corp, China's biggest automaker in terms of sales, expects to sell 580,000 cars this year through its joint ventures with Volkswagen and GM. Last year, it sold 400,000 vehicles.

Grace semiconductor Manufacturing Corp started production in September at one of the mainland's most advanced integrated circuit plants in Shanghai.

(Shanghai Daily December 4, 2003)