Shanghai's gross domestic product rose 13.3 percent to a record high of 1.2 trillion yuan (US$166.84 billion) last year.

This represents double-digit growth for 16 straight years.

The city remains confident of its economic outlook despite the negative influences of weak global economic growth, economists with the Shanghai Statistics Bureau said yesterday.

"Major indices in our system which track economic growth momentum show positive signs," said Cai Xuchu, chief economist with the bureau. "Also, Shanghai's economy will be boosted by robust demand when the 2008 Beijing Olympics create opportunities for local manufacturers, retailers and investors."

Last year, Shanghai's services sector climbed 15.2 percent to 622.3 billion yuan, the biggest contributor to GDP. Rapid growth in finance, telecommunications and logistics boosted this sector.

It was followed by the manufacturing sector, which increased 11.5 percent to 567.5 billion yuan. The agricultural sector expanded two percent to 10.1 billion yuan.

Fixed-asset investment in 2007 accelerated 13.6 percent to 445.8 billion yuan, led by urban infrastructure and industrial input. Retail sales gained 14.5 percent to 384.7 billion yuan, the fastest pace since 1998.

Exports surged 26.7 percent to US$143.9 billion while imports grew 22.1 percent to US$139 billion.

"However, we are also facing a few challenges to facilitate a healthy economic development," said Pan Jianxin, head of the bureau. "We should tackle inflationary pressure and try to reduce pollution and the consumption of energy."

Shanghai's consumer prices, a major gauge of inflation, jumped 3.2 percent in 2007, compared with the 1.2-percent rate of 2006.

It was higher than the figure of 2.4 percent in Beijing but lower than the national average, which settled at 4.8 percent.

Higher costs of food, which advanced 9.4 percent last year in Shanghai, was the main catalyst for the consumer price increase. Pork prices, for example, surged 37.7 percent and edible oil prices rose 29.8 percent, according to the bureau.

Among other figures released yesterday, foreign direct investment gained two percent to US$14.8 billion.

By the end of last year, 184 multinational companies had made their regional headquarters in Shanghai and 244 research and development centers by overseas companies had been established in the city.

Shanghai received 6.65 million foreign tourists last year, an increase of 9.9 percent from a year ago.

Price rises in commercial property are not calculated into consumer prices because some people buy it for investment, not consumption, Pan said.

Last year, Shanghai's spending in property development recorded a mild growth of 2.5 percent to 130.7 billion yuan.

However, sales of commercial property surged 41.9 percent to 308.9 billion yuan, with the average price 8,253 yuan per square meter.

(Shanghai Daily February 5, 2008)