1. Dragon TV: What's happening with the recent hearing to raise Metro fares? The second question: Shanghai has issued a new real estate standard today to levy different taxes on properties in different price ranges. Within the Inner-Ring Road, an "affordable" apartment is priced below 17,500 yuan (US$2,108) per square meter and less than 140 square meters in size. Does the local government consider this to be a reasonable average price for the local real estate market in the future?

Jiao Yang: Firstly, although Shanghai has undertaken rapid rail transport development, local residents' demand is growing at a much faster rate than the rate of capacity increase. In the context of seeking an ongoing balance between demand and supply, without demand-side management it is hard to ease overcrowding in the short term and pay due regard to safety concerns in rail transport operations.
In order to control the passenger flow and ensure their safety, the state-owned Shentong Group, the Metro system's main investor, has applied to the Shanghai Price Bureau to raise Metro fares. The price adjustment plan has three principals: firstly, regulating passenger flow during peak hours in a reasonable way and curbing an excessive increase in new passengers; secondly, raising fares on a sliding scale based on the distance traveled and relieving cost pressure on passengers traveling mid-to-long distances; thirdly, improving the Metro pricing system to optimise efficiency.
In order to collect ideas from all walks of life and citizens' representatives, the Shanghai Price Bureau organized a hearing on raising Metro fares held on the afternoon of May 30, with the delegates comprising 20 commuters, scholars and Metro officials. Ten other citizens sat in on the hearing.
At the hearing, all the delegates made clear their respective views and the media coverage was extensive. Holding a hearing is useful for government departments to collect various ideas, enhance communication between passengers and managers and to ensure the government manages prices in a scientific way. The government is studying carefully the ideas of the delegates so as to improve the price adjustment plan and associated issues.

Now to your second question: you asked about the real estate tax policies released today. You have all seen the contents of the policies reported in the newspapers. The local authority has also described them in detail. What I want to explain to you is that the released price standard is based on the designation of zones and the stability of property prices. The prices are set in the light of the following standards: 1.2 times the average actual property trading price from the second quarter of last year to the first quarter of this year, then increasing the resulting figure by 20 per cent. The standard can be adjusted according to the market and will be issued by the government every half-year.

2. Eastday: It is said that the system for holding the World Trade In Services Forum will be innovative. Can you give us detailed information? The second question: it was recently reported on the Internet that Shanghai's personal income threshold for taxation purposes will increase to 1,400 yuan (US$169). Is this true?

Jiao Yang: Although the government will host the World Trade In Services Forum, it will be run on a market basis. Government departments will only issue policy guidelines rather than subsidize the forum. The promoter will determine the resources and worthiness of the forum and raise funds from local companies and the public by attracting sponsors and selling tickets. We aim to change the previous model whereby the government was the sole investor, and explore a new market-based model which is in line with the development trend of the exhibition sector.

As for your second question: some media have recently reported that the city will raise the 800 yuan personal income threshold for personal taxation. Such reports are misguided. Since the law on personal income tax was implemented, the personal income threshold for tax has remained unchanged at 800 yuan and has never been raised to 1,400 yuan. According to the regulations of the Ministry of Finance and State Administration of Taxation, Chinese cities and provinces do not have the authority to raise the personal income tax threshold. Shanghai firmly adheres to the regulations of the Chinese central government and manages tax affairs following the regulations of the Ministry of Finance and State Administration of Taxation.

3. Radio Shanghai 990: From what you said, I've learned that there will be renovations to local buildings to make them energy-saving. Does the renovation program need huge capital inputs? Where will the money come from? What shall we do if we find difficulties in financing? Are there any specific terms included in the newly enacted regulations related to that point? Thank you.
Jiao Yang: It's a good question. Financial capital is a must for the program. The new rule regulates specifically that new buildings must take measures to save energy so as to meet state and municipal standards. For existing buildings or buildings under construction that have neglected energy saving, the rule says they must make energy-saving improvements to the buildings when they renovate or build additions to their surrounding structure.
Now we are faced with a considerable difficulty for further developments on existing buildings, and that is we lack funding. To solve the financial crisis, energy conservation investment companies have come into being under the market mechanism. These companies finance public buildings in their energy supply system renovations. They make buildings energy efficient and provide good management to raise efficiency and cut expenses. Then they get returns by sharing the saved money with the owner of the building or the occupants of the buildings.  This practice is called "energy performance contracting," which is very popular and effective in many developed countries and regions.
The new rule uses "energy performance contracting" for reference to encourage multi-channel financing and profit sharing for investors.

4. Xinwen Morning News: Just now, you said we still lag behind developed countries in terms of energy conservation programs for buildings. Then is there a definite objective as to when we'll catch up and are there any specific measures? The property rules enacted today apply different calculation methods to property deals completed before and after June 1. We base the time of the deals on two kind of materials, one is the property certificate and the other is the contract. However, we've learnt that the time recorded on the two can be different. Would you mind explaining it a little bit?
Jiao Yang: We have a definite objective for energy saving. That is, starting from this year, all new buildings must meet the energy efficiency standards. The work is complicated. We should provide policy support to ensure the program goes on well. First, we will take a sum from the wall material research fund and put it into the research and development (R&D) projects for the construction of energy efficient buildings. It's part of our general policy that focuses on scientific, technological and educational developments. Second, we'll keep a close eye on the new property projects that will apply the energy saving standard in construction step by step, supervising their bidding, appraising shop drawings and  checking project completion processes. Third, if the substand developers fail, we will give them punishments according to the laws and regulations. Fourth, we will reward developers who apply the standard voluntarily. For more details, please contact the construction and communication commissions.
As to the home deal time, please refer to our rules. Consult the real estate department to know how to do it specifically.

5. Oriental Morning Post:  I would like to know whether Shanghai will issue authentications for energy-efficient buildings. If so, when will it take effect?
My second question is about the municipal government press conference.  Today is the 50th conference and the second anniversary of their commencement.  Through all these 50 meetings, what have you learned, and what is your opinion of them?

Jiao Yang: Your second question has nothing to do with the subject of this press conference and I'd prefer not to answer it.
But the first question of whether there is an authentication system, or procedure, for energy-efficient buildings is quite important.
From the successful experiences of foreign countries in promoting energy-efficient housing, the authentication system has proved an effective method.  Shanghai began energy-efficient building authentication in 2002.  Projects meeting or surpassing the energy-efficient standards apply for the authentication, which has four stages: application, rationale/justification, project review and authentication.  Projects authenticated as meeting the required standard will be awarded an energy-efficient building certificate and the new energy-efficient building logo jointly issued by the Shanghai Energy-Efficient Housing Office and the Shanghai Housing, Land and Resources Administration.

The management regulation for energy-efficient housing has been passed at the municipal government's standing work meeting, but still needs some amendments in technical areas. It will officially take effect with the mayor's signature.
Once the date is set, we'll immediately announce the news on the government website or at the municipal government conference.  Since the regulation published today was only passed the day before yesterday at the municipal government's standing meeting, it still needs further fine-tuning and discussion on technicalities before being practically applied.

6. Business News Daily:  It is widely known that trade conflicts between China and the US and those between China and the EU have been reaching a head.  Can you reveal what signals will be given at the upcoming Forum on World Trade in Services? What will be the effect on Shanghai's textile export sector from the taxes imposed by the US and EU on 74 of China's textile products?

Jiao Yang:  Reporters will get to know the answers at the global trade forum when they are there to cover it.

The country has taken a series of proper actions in face of the new foreign trade environment arising from the unified textile market.  Since June 1 2005, China has decided to rescind export taxes on 81 textile products on which both the US and EU have set quantitative restrictions.  The move has reduced the taxes and costs of textile exporters.

Textiles is a core industry in Shanghai.  In this sense, the municipal government has paid much attention to textile enterprises and acted accordingly.
Firstly, the city acts to perfect the product structure, enhance product profiles and added values as well as to improve competitiveness.
Secondly, it encourages enterprises to go abroad to improve their resources and actively seek to evade trade conflicts.
Thirdly, it has established a textile industry monitoring system.  The Shanghai Economic Commission, Shanghai Foreign Trade and Economic Commission and Shanghai WTO Consulting Center closely cooperate to monitor textile exports and price changes so as to be fully informed.  Meanwhile, backed by the national Ministry of Commerce, Shanghai will join Jiangsu and Zhejiang provinces to establish a regional monitoring system, firstly with regard to the textile industry, in the Yangtze River Delta area.
Fourthly, the city supports industry associations in their transformations to market orientation so that they can better protect the legal rights of Chinese enterprises involved in international trade conflicts.

7. Eastradio News Channel: According to the policy on the local real estate industry issued today, there are three standards targeting affordable houses.  I was puzzled when discussing these standards with my colleagues.  So, would you please respond to the following questions. 
Firstly, let's take the house prices on the Middle-Ring Road as an example.  According to the new standard, the price there should not exceed 10 000 yuan (US$1 209.2) per square meter, 1.4 times the average price in the same zone.  Say, a person buys an apartment at a unit price of 8 000, then he sells the apartment at a price 1.2 times the buying one.  Thus, the unit price still exceeds 10, 000 yuan.  Does this apartment sill belong to the affordable housing sector?  If it does, will this standard have any impact on local house prices?  If it does not, does it mean that ordinary residents cannot benefit from certain favorable policies?
Secondly, house prices now are set according to the location of the houses (say, within the Inner-Ring Rd, between the Inner-Ring Rd and the Middle-Ring Rd, between the Middle-Ring Rd and the Outer-Ring Rd and outside the Outer-Ring Rd).  Perhaps many residents will be puzzled that two houses connected by the same street will have prices differing by thousands.  Is it possible that future house prices will not be determined by location? 
So please say something about this.  Thank you.

Jiao Yang: Most people are really concerned about this new policy.  The journalist from Eastradio is worried that some local residents will be disadvantaged by the favorable policy due to some technical problems.  All three standards among the local preferential policy should be under the control of the seven national ministries and commissions (The Ministry of Construction, National Development and Reform Commission, Ministry of Finance, Ministry of Land and Resources, People's Bank of China, State Administration of Taxation and the China Banking Regulatory Commission).
If things happen as you say, that prices of the houses connected by one street differ by thousands, then the residents can only benefit from the favorable policy.  As for the possibility of zone re-designation, we set the designation principle adhering to the requirements from the seven national ministries and commissions.  The principle now is comparatively reasonable and stable.

8. China Business News: The EU has been describing our domestic textile export volumes like eruptions of tsunamis and volcanoes since China rescinded export taxes on 81 textile products.  Can you say something about this issue?  And, according to the CCTV report, there WILL be more and more trade conflicts like those emerging in the textile export issue.  Will the government take any measures to reply to these conflicts?

Jiao Yang: I have already answered your second question in my reply just now.  If it's not detailed enough, you may refer to the specific administrations.  The Shanghai government will firmly abide by the policies issued by the central government.  And our municipality will also create healthy living and development environments for local enterprises adhering to national laws.

9. Shanghai Afternoon Post: You once mentioned during a news conference last year that the city was to promote gas air-conditioners.  So will the government issue any new approaches on the power saving of air-conditioners this year?  Are there any measures to prepare for the peak power demands of the summer?  And why does the city choose to hold the Forum on World Trade in Services this year?  Thank you.

Jiao Yang: Gas air-conditioners were really recommended last year to ease the power supply and demand conflict during summer.   It's a way to optimize energy use and increase total energy efficiency.  We are promoting gas air-conditioners and developing energy distributing supply systems in most city buildings, such as factories, hotels, hospitals, malls and office buildings, to improve the living and working conditions there.

From 2004 to 2007, the municipal government will pay equipment investment allowances to those companies that have installed gas air-conditioning or energy distribution supply systems (with the peak capability of 10 000 kilowatt per machine).  The allowance standards are: 100 yuan per kilowatt of refrigeration capability for the gas air-conditioners and 700 yuan per kilowatt for the energy distribution supply system.  These two standards have been in use since October 1, 2004.

This year's peak power demand period starts on June 15 and ends on September 23.  In a bid to guarantee a normal and orderly life and work, Shanghai will continue to restrict rather than cut off power supplies, guaranteeing access to power for all local residents and key manufacturing companies.  With tremendous efforts made citywide, the power supply situation this year is expected to be better than last year.

In order to relieve power shortages and ensure a normal life for local residents this summer, the city will concentrate its efforts on four areas: to increase the electricity supply, to promote energy efficiency and conservation, to eliminate companies that use a lot of power in an inefficient way, and to ask workers to take their holidays in turns. I believe the city will keep the electricity supply and demand more balanced this year with a joint effort by the whole society. Shanghai will further develop an energy-saving mechanism where the government will play a leading role, and the coordinated effort of all social groups and the participation of ordinary citizens will also be encouraged. I hope that local media will make more effort to publicize the importance of energy saving, to raise public awareness of it and ensure the implementation of government policies. 
I won't explain why the World Service Trade Forum will be held in Shanghai here since I have made it clear just now.

10. Asahi Shimbun (Japan): Shanghai's housing prices have fallen recently. Does the price drop reflect the public concern about the bursting of the housing bubble? Shanghai began to impose new taxes on residential property transactions on June 1. Since the plan had become well-known before it was officially declared, did it trigger the decline of housing prices? Will the government adhere to its policy of cracking down on property speculation?

Jiao Yang: Your questions are interrelated. We've explained on several occasions what we've adopted to regulate the property market is a combination of various measures rather than a certain policy. The government's macro-economic control takes effect thanks to a combined effect of the measures (including new laws, financial and taxation policies, and administrative actions). The city has clear goals for regulating the property market. Efforts will be made to improve the housing supply, to make sure housing demand is not growing too fast, to improve the social security system concerning residential housing, and to restore order in the property market. The government has brought forward "the three emphases" principle for the macro-control policy: give priority to house buying for the purpose of living there, regulate investment and curb speculation. The government has always adhered to the principle during the process of market regulation. All the macro-control policies and measures adopted by the central and the municipal governments are aimed at maintaining a healthy development of the housing market and its stability, and satisfying the needs of local residents.

11. Science and Technology Daily: Will the modification to the structures of old or newly completed buildings incur additional costs? And if so, will the new regulation conflict with the municipal government's policy of curbing housing prices?

Jiao Yang: Energy-saving buildings will certainly cost more than normal buildings. However, the extra costs won't be too high according to recent research. If local building envelopes (including outer walls, seals, roofs, doors and windows) are adapted to meet the "energy-saving standards" set by the country and the city, the innovative building envelope systems will help reduce the overall energy consumption in the buildings by 25 percent. The extra costs (100-150 yuan, or US$12-18, per square meter of the building area) can be paid off in 5-8 years.

In order to keep the room temperature at 18 degrees Celsius in winter and 26 degrees in summer, the air-conditioning in a multi-floor building without heat-insulation systems consumes 90.7 kWh of electricity per square meter (kWh = kilowatt hour, which is the use of 1000 watts per hour). In contrast, energy-saving buildings require 48.1 kwh, 47 percent less than the normal buildings. Besides, the interior temperature of these buildings will be 2-3 degrees Celsius lower than normal buildings since their outer walls are built with heat preservation and insulation materials. Their residents can enjoy a more comfortable life. Therefore, energy-saving buildings can not only improve the life of local residents, but can also cut the cost of living. For the citizens who buy apartments for their own use, the government's policy to make local buildings meet "energy-saving standards" will help improve their living standard. It is also an important step to make Shanghai a more energy-efficient city.