Shanghai's economy surged 15 percent from a year earlier in the first quarter, a 17-year high, thanks to stunning growth in manufacturing and last year's low comparative base.

The January-March gross domestic product in the city expanded to 381 billion yuan (US$55.81 billion), the fastest growth rate since 1993 when Shanghai posted a 15.1-percent GDP increase.

The Shanghai Statistics Bureau said yesterday that the manufacturing sector's figure climbed 26.3 percent year on year to 158 billion yuan, while services grew 7.7 percent to 221.5 billion yuan.

The agricultural sector contracted 0.6 percent to 1.5 billion yuan.

"The better-than-expected result shows a solid recovery in Shanghai ... growth momentum has been restored after the global financial crisis," said Li Maoyu, an analyst at Changjiang Securities Co.

"A robust industrial sector, especially the blistering growth in advanced manufacturing, demonstrated the success of government efforts to revamp the economy and boost local demand," Li said.

The city's industrial output in six key industries - electronic information products, auto, refinery, fine steel, machinery equipment and biomedicine - soared 41.2 percent on an annual basis in the first three months, the bureau said.

Shanghai is restructuring its once export-oriented economy to become more reliant on the advanced manufacturing and services sectors.

However, some analysts said the city's future growth may slow down due to an inevitable correction in low comparative bases and uncertainty in the housing market.

"The first quarter's rapid growth rate was largely due to a low comparative base," said Zhang Qi, an analyst at Haitong Securities Co.

"The pace may moderate after the base becomes higher and we should closely observe the trend in the property market, which may cool after government policies targeting speculation take effect."

Shanghai's GDP only edged up 3.1 percent in the first quarter of last year, the slowest pace in 17 years.

Solid basis

After the government announced a string of policies, including stricter mortgage loan criteria and higher lending rates for multiple home owners, the city's new housing transactions slumped 50 percent last week amid a growing "wait-and-see" sentiment.

However, prices of properties continued to break records due to robust sales of high-end houses.

Yan Jun, a bureau analyst, said the growth rate laid a solid foundation for the city to achieve the goal of an 8-percent GDP increase in 2010.

Shanghai's pace only represented "mid-level speed" on the list of China's GDP growth in mainland provinces and municipalities.

The south China province of Hainan topped the list with a surge of 25.1 percent in GDP in the three months through March, bolstered by massive investments to build an international tourism island.