FLANKED by dozens of girls wearing only bikini tops and hot pants, the new e-book reader from Shanda Entertainment made its debut at a recent game fair. It was a toss-up who attracted the most attention.

Shanghai-based Shanda, China's second-largest game firm, said it has high hopes for its 6-inch Bambook reader, which was priced at 998 yuan (US$146) in the beta test period, not far off the US$139 price tag for Amazon's new entry-level Kindle reader.

Digital publications, including e-book readers and games, is one of the high-tech sectors Shanghai is seeking to promote and develop as part of a move from traditional manufacturing to more high value-added, innovative production.

"It's an efficiency problem in the economic development of China," said Wu Jinglian, a researcher at the Development Research Center of the State Council and a well-known economist.

"High GDP growth requires a huge investment in capital and labor resources, as well as a reduction of environmental pollution," he added. "Therefore, current efficiency is not acceptable. China has to change and develop its economy in a more efficient and sustainable way."

In line with that thinking, Shanghai announced last year that it was targeting nine industries for fast-track development, including new energy, biological pharmaceuticals, information technology and low-emission, alternative-energy cars.

Revenue from the nine industries in Shanghai is expected to climb to 849 billion yuan this year from 736.5 billion yuan in 2009. Investment in those sectors is forecast to rise 20 percent from a year earlier to surpass 50 billion yuan, according to the Shanghai Municipal Commission of Economy and Information Technology Development.

China, meanwhile, is drafting a plan to develop seven strategic core industries and projects on a national level. The plan is expected to be similar to the one Shanghai unveiled last year, according to Ma Jing, chief engineer of the commission, the city's top IT and high-tech development regulator.

Among the top development projects in Shanghai's plan for this year are digital publication, cloud computing, three-network convergence and next-generation networks.

Shanda said its new Bambook is targeted at both readers and game players. The device provides users free content download services for 90 percent of Chinese books online, said Hou Xiaoqiang, chief executive of Shanda's literature division.

Hanwang Technology Co, the country's No. 1 vendor of e-books, with about 70 percent of the market, is considering setting up a new research facility in the Zhangjiang High-Tech Industrial Park of Shanghai's Pudong New Area, company Vice President Wang Bangjiang said.

Shanda was one of the first leading firms to set up facilities at Zhangjiang, giving rise to expectations that the park will become a major center for the digital publications industry.

In 2009, China's e-book market took off. Sales rocketed to 400,000 units from almost zero in the previous year, according to Zero2IPO, a Beijing-based research firm.

Compared with overseas rivals such as Amazon (Kindle) and Apple (iPad), the China-developed e-book services include free content download of Chinese books, which may favor domestic readers.

In the longer term, Shanda will add games for users to download on e-book readers, Hou added.

Besides e-book readers, games are well in the sights of manufacturers.

Imagine the scene: Hundreds of people crammed into an exhibition center, despite 35 degrees Celsius heat outdoors, to watch the finals of WCG China, the most popular game competition in the country. For several hours, they applauded and shouted encouragement to professional players of games such as World of Warcraft.

At present, China has 300 million gamers and about 30 billion yuan (US$4.4 billion) in game revenue annually, according to the General Administration of Press and Publication. Annual growth has been about 30 percent.

The game market has also fueled the growth of related industries such as computer and telecommunications.

South Korea-based Samsung, the sponsor of WCG, displayed almost all its products, from handsets, monitors and laptops to 3D TVs, in the exhibition center, attracting a lot of attention.

Besides WCG, the country's top game fair Chinajoy, as the China Digital Entertainment Expo and Conference is known, has been held in Shanghai annually for several years.

Shanghai wants to seize the national initiative as a center for cloud computing, setting itself a three-year target to achieve that ambition.

Cloud computing is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand. It often contains two parts: powerful server supercomputers and individual devices to receive services and information, such as laptops or handsets. It's already become the system favored by firms, including Google and Microsoft.

More than 10 firms with cloud computing technologies, whose annual revenue has surpassed 100 million yuan each, are expected to set up bases in the city. Their cloud computing technologies will be used by business and government agencies.

Shanghai North High (Group) Co aims to invest 1.1 billion yuan to build an Asia-Pacific Data Harbor in the city's Zhabei District by 2011. The facility, with the support of China Telecom Shanghai branch, will provide data storage and management services for domestic and international financial, telecommunications and health care firms.

Shanghai needs world-class information infrastructure if it is to realize its goal of becoming a global financial and transport hub, experts said.

In the short term, more than 40 Internet firms will use the data harbor to process with their data.

Within three years, cloud computing may contribute an additional 100 billion yuan to Shanghai's software and information technology service sectors, one of the nine industries.

By 2012, the software and IT service industry revenue will hit 360 billion yuan, according to the municipal commission.

Network convergence and next-generation network development are other key sectors for Shanghai to develop. The government in July announced a pilot plan to integrate the three networks of telecommunications, Internet and broadcasting. Shanghai is one of the 12 cites and regions under the nationwide Three Network Convergence plan, the Ministry of Industry and Information Technology said.

The convergence will allow people to use a mobile phone to watch TV and surf the Internet, use a TV to phone other people, and use computers with online tools to phone others and watch TV in the future.

The city's top media operator Shanghai Media Group plans to invest heavily to establish a national Internet video and audio center in Songjiang District of Shanghai.

SMG has also won licenses from regulators to start new services, including IPTV (Internet protocol TV) and mobile TV in the city.

By 2009, Shanghai had more than 1 million IPTV users, the most in China.

On the telecommunications front, China Mobile is testing the country's first 4G network at the World Expo site in Shanghai. It is 20 to 40 times faster than the 3G network.