Shanghai's economy performed better in the second quarter than it did in the first three months and is on track to meet the city's goal of 9 percent growth for the year, Mayor Han Zheng told local lawmakers yesterday.

"The city's economy performed better than expected over the first half of the year - and even better in July," Han said at a mid-year session of the Shanghai People's Congress.

Local gross domestic product improved to a 7.9 percent rise in the second quarter after a lackluster 3.1 percent rise in the first three months, he indicated.

Markets boom

Shanghai's economic powerhouse, its service sector, posted 14.2 percent growth in the first half from a year ago. The expansion was reflected in increasing transactions in the stock, property and car markets, Han added.

The benchmark economic indexes for industrial output and fiscal income have revived impressively in recent months following downturns since last November due to the influence of the global recession, the mayor said.

The world downturn, which created the greatest challenge to the city's development in the past 20 years, has highlighted the need for refining the focus of economic planning, Han said.

He urged district governments to work together on improving the quality of economic development and ease away from low-end production.

Han also said the city government will make major efforts to encourage the development of cutting-edge technologies during the rest of the year

Eight advanced manufacturing industries, including civil aircraft, new energy and bio-pharmaceuticals, will receive 10 billion yuan (US$1.46 billion) this year from the local government as a development subsidy, the mayor said.

Financial support will be even greater next year, the mayor said.

Recruiting domestic and overseas business investment and further planning for the future Hongqiao Business Zone as well as streamlining the government structure and management of the enlarged Pudong New Area will be among the other major focuses of the city government's development goals for the rest of this year, Han said.

The mayor also re-emphasized that the city will take further steps to cool its rapidly rising real estate prices by enlarging the land supply.

Another 1,200 hectares will be authorized citywide for new residential projects later this year, bringing the total residential land supply to 1,600 hectares for the whole year, the mayor said.

Last year, only 700 hectares of land were allotted for residential expansion.