Shanghai's retail sales rose 12% year-on-year in January to RMB27.46 billion thanks to a burst in holiday spending, the city's statistics bureau said last week.

"Sales expanded rapidly due to the two celebrations in January, New Year and the Spring Festival, which spurred spending on shopping, eating and entertainment," said the bureau's Chen Yongqi.

Restaurants sales soared the highest at 23.9% to RMB3.63 billion, led by holiday reunions and the increasing number of people who dine out on Lunar New Year's Eve.

Retail sales have advanced at a fast pace in recent years under government efforts to spur domestic spending. Sales in 2005 reached RMB297.3 billion, up 11.9% from a year earlier. The growth rate was the highest since 1998.

The city's information office said last month that Shanghai will raise its investment in infrastructure construction in preparation for the 2010 World Expo, which is expected to attract 70 million visitors from around the world.