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Shanghai's economic growth picked up in the third quarter, signaling that its economy is bottoming out, even though it's still slightly short of the 8 percent target set for this year, data showed Thursday.

The city's gross domestic product rose 7.4 percent year on year to 1.4 trillion yuan (US$222 billion) in the first three quarters, the Shanghai Statistics Bureau said on its website.

The bureau declined to break down numbers for the third quarter, but it was clear that the growth was faster than the second quarter's 7.3 percent and the first quarter's 7 percent.

The city aims at a growth rate of around 8 percent this year, compared with 8.2 percent in 2011.

"It is encouraging that Shanghai extended the growth momentum in the first three quarters and showed signs of further improvement, benefiting from more foreign investment," said Li Maoyu, an analyst at Changjiang Securities Co.

"But it is hard for the city to achieve the 8 percent yearly growth target set earlier, given the uncertainties in export prospects."

The strength of the economy is mainly from the services sector as Shanghai focuses more on the quality of economic growth by bolstering its services rather than seeking an absolute growth pace.

In the January-to-September period, the services sector's output jumped 10.9 percent from a year earlier to 848 billion yuan, equal to 59 percent of the city's GDP. In comparison, manufacturing gained just 2.6 percent to 583 billion yuan and agriculture lost 0.9 percent to 7 billion yuan.

In the first three quarters, China's economy grew 7.7 percent with strong momentum from the western region and inland provinces. Shanghai's economic growth has not performed as well as the nation's in recent years partly due to the city's economic restructuring and other provinces' rapid growth, economists said.

Shanghai had produced 4.1 percent of national total output by the end of September. Shanghai's land area is only 0.06 percent of the national total.

The city's annual GDP more than trebled to 1.9 trillion yuan in the past decade. Its aggregate output surpassed Singapore's and Hong Kong's in 2008 and 2009, respectively, and Seoul's in the last year. It became China's first city with a GDP per capita over US$10,000 in 2009.

Shanghai used to be the country's manufacturing hub, with a reputation for products like watches, bicycles, television sets, textiles and refrigerators. The picture is changing as the city works to make more advanced products and boosts the service industry.