Shanghai raises growth by emphasizing service

In the first six months of the year, the service sector, which encompasses property, finance, telecommunications and tourism, outpaced that of the agricultural and industrial sectors to grow at 9.6 percent, claiming 61.7 percent of the city's GDP.

The figure showed a continued expansion by 1.3 percentage points from the same time last year, reflecting the increasing pace of its transformation into a service-oriented economy, said Yan Jun, chief economist at Shanghai Municipal Statistics Bureau.

The surge was led by fixed-asset investment from the service sector, such as commercial rents, which advanced by 16.7 percent year-on-year, taking up the lion's share of overall input.

The sector also gained the most traction in foreign direct investment, where $10 billion worth of contracted foreign capital was garnered, up 10.1 percent. The amount was equal to 88 percent of all investment drawn in during the period.

The financial sector also posted robust annual growth of 14.7 percent. For instance, transaction volumes of shares traded at the Shanghai Stock Exchange grew by 14.3 percent year-on-year

But overall economic growth was snagged by a deeper slowdown in trade and manufacturing, at a time when global economic uncertainty lingers.

Trade volumes shrank 3.7 percent, with a drop in exports by 4.3 percent and imports by 3.2 percent.

A 1.9 percent ebb in the producer price index, a key gauge indicating the health of the manufacturing sector, pointed to a contraction in demand.

A pickup in the pace of growth indicates the transformation toward a service-oriented economy has borne fruit, said Sun Lijian, professor of economics at Fudan University in Shanghai.

"We are starting to see new areas of growth that may offset the loss from the restructuring process, which is characterized by the shift from a manufacturing-based, export-led economy, to one driven by domestic consumption and the development of services," he said.