Guangzhou's gross domestic product grew 12.7 per cent to 268.5 billion yuan (about HK$256.4 billion) last year, as consumer spending and government investment offset weakness in the export sector. Executive vice-mayor Shen Bonian yesterday said: 'Domestic demand played an important leading role. Measures to expand domestic demand have effectively accelerated investment and consumption growth.' With exports down 1.4 per cent to US$11.6 billion, the economy grew strongly on the back of retail spending and government investment. Retail sales were up 14.6 per cent in real terms to 124.4 billion yuan, but sustained consumer demand was not enough to stem another year-on-year decline in the municipal retail price index, which fell 3.1 per cent. Statistics Bureau director general Ma Yusheng said: '[Deflation] was due mainly to considerable falls in the prices of food, clothing and durable goods. 'Financial institutions did a good job implementing the government's policy of stimulating domestic demand.' Mr Ma's praise reflected a 21.5 per cent rise in medium- and long-term loans. Last year, Guangzhou invested 14.3 billion yuan on urban construction projects, many of which were connected with the city's hosting of the Ninth National Games in November. According to Guangzhou Planning Commission deputy director Gao Dianying, the city has committed itself to 20 more construction projects, requiring 77 billion yuan, of which 14 billion yuan will be invested next year. Guangzhou's gross domestic product growth was the highest by a major mainland city last year. Tianjin's economy grew 12 per cent, Beijing's 11 per cent and Shanghai's 10.2 per cent. Guangzhou's per capita GDP figure now stands at US$4,586. According to Mr Shen, the average annual salary of urban residents increased 15.8 per cent last year to 22,101 yuan. However, the income of Guangzhou's farmers grew 5.9 per cent to 6,446 yuan. Higher incomes have fuelled consumer spending. '[Guangzhou residents] are now spending more and more money on housing, private cars and education,' Mr Shen said. Mr Ma said unit car sales in Guangzhou increased 19 per cent last year, while spending on housing accounted for 14 per cent of total consumption. There are now 60.8 computers and 109.4 mobile phones per 100 households in Guangzhou. In 2000, computer and mobile-phone penetration stood at 54.2 and 72.2 per 100 households. Industrial output grew 14.9 per cent to 339.1 billion yuan, with the electronics, car and petrochemical sectors accounting for 84.8 billion yuan - 25 per cent - of the total. Output of high-tech products - a somewhat arbitrary designation cutting across all sectors - increased 31 per cent to 61 billion yuan.