SHANGHAI is expected to see its economy grow about 10 percent this year, a faster rate than the 8 percent targeted at the beginning of the year, Mayor Han Zheng said yesterday.

The city's gross domestic product increased 12.7 percent in the first half, after spiking 15 percent in the first three months, Han told deputies to the city's People's Congress yesterday.

"We have exceeded our target of the city's economy in the first half," he told the lawmakers. "We'll try to play a delicate balance of growth and better economic structure."

Shanghai, which has relied heavily on manufacturing and exports, is throwing the weight of its economy behind a push to build up advanced manufacturing and modern services industries.

Shanghai's high-tech industry outperformed its industrial output in the first half.

Growth of retail sales in Shanghai was stronger than growth in fixed assets investment in the period, showing a rise in domestic consumption. Han said Shanghai seeks a stronger retail sector and less reliance on investment and exports.

In the first half, local fiscal revenue gained 23.3 percent year on year. Shanghai targeted a whole-year fiscal revenue growth of 8 percent.

Growth of Shanghai's economy is likely to look tamer in the second half on a higher comparative basis a year ago and given the uncertainties of the global economy.

Growth of Shanghai's exports is expected to slow to about 20 percent for the whole year, compared with an increase of 33.6 percent in the first half.

Consumer price index, the main gauge of inflation, gained 2.2 percent in the first half in the city, compared with a 2.6 percent growth nationwide.

China's whole-year inflation target is set at about 3 percent.

Han said the city will endeavor to curb its inflation. One way will be by boosting the supply of food, including vegetables.

In housing, the city will go all out to expand the supply of affordable housing in building up a multi-layer home market, the mayor said.

The city targets building 12 million square meters of affordable homes by the year's end - 60 percent of the city's yearly target for new housing of all types. Of that, 4 million square meters, or one-third, will be budget homes.