Shanghai should step up its shift to a low-carbon economy powered by advanced manufacturing and services, and encourage private businesses to do the same, Mayor Han Zheng said yesterday.

He urged government officials to make services more efficient and to be bolder in assisting innovative and high-tech firms.

"Shanghai's economic restructuring demands immediate acceleration," Han said during a meeting with some members of the Shanghai Committee of the Chinese People's Political Consultative Conference, the city's top political advisory body.

"We should put the city's development into a broader perspective of the nation and even the world, and try to take a leading position in a few strategic sectors," he said.

Shanghai was the first city in China to use and make pioneer products such as light bulbs and telephones back in a not very remote history, Han said, adding that the city should resume the glory.

Shanghai has taken some steps in this direction: constructing a base for advanced equipment manufacturing in Lingang New City, accelerating research and development in nuclear power, and exploring metro train production.

The city also hopes to send locally developed jumbo jets into the sky and to play a bigger role in developing China's aviation industry.

On the services side, Shanghai has set the target of becoming an international financial and shipping center by 2020.

In his government work report to the annual session of Shanghai People's Congress, Han said on Tuesday that Shanghai encourages expansion of professional service industries, including accounting, information services, new media and the cartoon industry.

Shanghai's service sector grew 12.6 percent on an annual basis last year, much faster than that of manufacturing, which edged up 3.1 percent, and agriculture, which contracted 1.1 percent.

Production of Shanghai's service industry accounted for 59 percent of the city's total output last year, up 3 percentage points from 2008.

"Strengthening the service industry conforms to our goal of realizing environmental-friendly development, or low-carbon development," Han said yesterday.

The mayor said private businesses - small and medium-sized enterprises, as well as foreign companies - should be major contributors in innovation of the advanced manufacturing and service industry in the city.

As one example, the Pudong New Area government may begin to cover the 8,000-yuan (US$1,171) daily cost of a feasibility test for a garbage disposal project.

The project, run by a small high-tech firm, can turn urban rubbish into usable fuel and gas.