1. Eastday: The“Three-year Action Plan”said at least 95% of employment relationships shall be bounded by labor contracts. How has the target been achieved now? What measures will the government carry out to raise the rate? Thanks.

Bao Danru: Relationships between employees and employers are generally harmonious in Shanghai and 90 percent of employment relationships have been bounded by labor contracts. Our target is 95 percent. We will carry out the following measures to realize the target.

Firstly, three parties should coordinate to put the mechanism into full swing. Labor authorities at all levels should strengthen the guidance and urge lagging areas to figure out the difference and map out effective plans to raise the rate at a quicker pace. The three parties are labor unions, organizations representing employers and the government. The city not only sets up a city-level mechanism for the three parties’cooperation, but also sets up a district-level mechanism, which can help us map out more effective measures.

Secondly, China has issued a“Labor Law,”and we will make use of the chance to promote the idea of signing labor contracts. It will hurt both the laborers and the employers if they don’t sign labor contracts.

Thirdly, the city is holding an activity which calls for a harmonious labor relationship between employers and employees, and we will take advantage of the activity to guide and urge companies to sign labor contracts with their employees to raise the rate.

Fourthly, we will enhance government’s supervision and management. Assistants in charge of supervising labor relationships will make use of local networks to improve the supervision and management of companies, especially private companies. They will urge problematic companies to sign labor contracts as soon as possible.

The four measures can help us realize the target, and we will try the best to exceed the target to better protect people’s interests and rights.

2. Xinmin Evening News: People are concerned a lot about the adjustment of the income gap. What has local government done?

Bao Danru:

It’s a complicated question because the adjustment of the income gap is related to the employment and social security fund, as well as the policies on economic development. I will narrow the question and tell you the function of Shanghai Labor and Social Security Bureau.

The adjustment of income gas depends on whether the gap is reasonable. We will adjust unreasonable and considerable income gap. The gap is embodied in employees’wages and social security fund after retirement.

We have carried out some measures on adjusting salaries at work, including stipulating the minimum salary. Shanghai has adjusted the minimum salary for 15 straight years and the latest adjustment took effect on September 1. The minimum salary is 840 yuan covering only employees' wages and social security fund contributions, which is higher than many other cities in China.

We are studying a new system which will include basic payment and allowances. The minimum social security fund should account for 60 percent of the city’s average salary and the minimum allowances will be mapped out one by one. For example, we stipulated this summer that companies must pay allowances to employees when the temperature is higher than 35 degrees Celsius. We are also studying the allowances for transport and night shift to ensure that employees won't suffer from lower incomes due to high routine expenses.

A negotiation mechanism can also help narrow the income gap. Employees can sign a special agreement to accept the payment when signing the labor contract.

We will also notice the income gap between employers and employees, especially in state-owned enterprises. If the front-line employees’income is not raised, the operators’income should not increase as well. The labor and social security bureau will regularly issue a guideline of salary and growth rate to inform employees and offer a reference for companies.

The new system will enable those who retire earlier to keep pace with the economic development. People who retire earlier than others get less pension than others. The adjustment of pension fund will consider the economic development and consumer price index into consideration. The city raised the pension fund in August and most retired people are satisfied with the adjustment. The city also adjusts the unemployment insurance, which is higher than the minimum social security line.

3. Shanghai Morning Post: I have a question about the real estate market in Shanghai. Housing prices have grown fast in Shanghai recently. Can you offer us some information about the supply and demand situation? Will authorities enhance the control of the property market?

Chen Qiwei: I noticed that media is concerned a lot about Shanghai’s real estate market. The market has developed stably so far this year under the macro-adjustment of the country. The demand and transactions have grown faster recently, which triggers the growth of housing prices. The State Council has issued a guideline on solving low-income families’living problem. The guideline requires authorities to further implement the macro-adjustment policies to secure a reasonable consumption on houses. Shanghai will implement the guideline and continue to strengthen the adjustment of the real estate market and begin a crackdown on illegal practices in the market.

The city will speed up the supply of land for residences. About 450 hectares of land will go on the market within this year for residences, including 50 hectares in downtown. The city will also speed up the consumption of idle land. Construction on six million square meters of properties is expected to kick off within this year. The city will speed up the construction of residences under 90 square meters. A total of 10.50 million square meters of such residences have been reviewed by authorities so far and the city will carry out proper measures to speed up the construction and promote them to the market. A total of 4.5 million square meters of new properties will be pre-sold within this year.

As for demand, the city will improve the mortgage policy and follow the country’s policy that individual’s down payment can’t exceed 30 percent of total housing price. Real estate authorities will cooperate with banks to refuse those who violate the rule. The authorities will also refuse a foreigner to buy more than two residences.

The city will strengthen the punishment on typical cases and crack down on developers who reserve properties to drive up prices. People involved in the sales of properties must use their real name, which will help strengthen the supervision of sales order and improve the mechanism on handling emergency issues.

The country has tried to absorb the excessive liquidity from the market by using monetary policies. We will keep a close eye on interest rates, currency rates, tariff rates and the stock market which can affect the property market to keep stable housing prices.

4. China Business News：Mr. Bao just mentioned a mechanism for salary increases. How does the mechanism work and how will you supervise the mechanism?

Bao Danru: The mechanism includes several aspects. Firstly, we will strengthen the guidance of companies. Companies should set up salary contribution mechanisms, including basic salary, bonus and allowance. The mechanism is not casual and the company must follow it.

Secondly, companies are required to improve the wage growth mechanism, which can enable employees to share profits. Companies should consider adding wages for employees whose salary is lower than half of the average salary in the city or who haven’t got a raise in two years.

Thirdly, authorities will take the salary growth of employees into consideration when reviewing operators of state-owned enterprises. Employees must get salary increases no matter how much the company earns. The operator’s salary can’t be raised if the company’s front-line employees’salary is not raised.

Fourthly, companies can negotiate with employees when the front-line employees’salary is not raised or raised slowly.

Fifthly, companies should improve the management of labor quota and map out the standard scientifically. The reasonable standard is 90 percent of laborers can finish their work within lawful working hours. We have mapped out guidelines on inner salary distribution.

The second question is about how we learn about the employees’salary condition. Their social security insurance is paid in line with the salary. We are in charge of guiding the salary increase and the social security insurance, so we have data about the salaries in different sectors. The issuance of related policies will help adjust salaries, especially for low-income earners.

5. National Business Daily: Mr. Bao mentioned that employees can negotiate about the salary with companies. How the system goes now? Will you begin trial operations in some sectors or companies?

Bao Danru: We have this idea for two to three years and we will try the best to realize the target. Now tens of thousands of companies adopt the system in Shanghai. And the system will be promoted by setting up a mechanism. The key task in the following couple of years is to set up a negotiation mechanism, which will include not only labor and social security bureau but also related organizations.

6. Singapore Lianhe Zaobao：I have a question for Mr. Bao. People concerned a lot about the social security fund. How is the fund now? Has the city strengthened the supervision on the fund? Does the central government supervise part of the fund?

Bao Danru：Social security fund includes insurance for the elders, patients, unemployed people, industrial injured workers and pregnant women. Shanghai last year put forward an idea to strengthen the management and supervision of the fund. We have a special account to manage all the funds. The funds must be transferred to the special account and then withdrawn after applications are made. Shanghai has set up a supervision committee on the social security funds, which is teamed up with government departments, experts, NPC officials and CPPCC officials. The team supervises each step of the usage of the funds, including withdraw, management and payment. The committee can secure the funds under an improved supervision mechanism.

We will set up a system to reveal the social insurance information next year to receive public supervision. The public can know the annual income and expenditures of the fund, as well as the sources of the fund. The system, supervision frame and public supervision can secure the fund under close supervision.

Thanks.

7. Phoenix TV: I have a question about the social security fund. A latest data said that the fund reported a profit rate of 15 percent in the first half of this year. Can you tell us the proportion of investments? Will the city be more cautious than other cities after the pension fund scandal? How will the fund be used?

Bao Danru: I need to talk about several conceptions to make the question clear. The social security fund is a specially set fund for aging generation. The fund does not come from companies or individuals. It consists of fiscal investments from the country, which totaled 280 billion yuan now. A national social security fund council is in charge of the operation of the fund.

Secondly, Social security fund includes insurance for the elders, patients, unemployed people, industrial injured workers and pregnant women. It can only be deposited in banks or invested on national debts. The rule took effect since 1999. Shanghai also follows the country’s regulation. Eight provinces settled parts of the pension fund into individual account on a trial basis, including Liaoning, Heilongjiang, Jilin and Shanghai. The account can be used for investments but we need wait for the country’s regulation to conduct the investment.

The third conception is about enterprise annuity. According t the country’s rules, the enterprise annuity is operated by the market. The four major bodies running the annuity are trustee, account manager, fund custodian and investment manager. The Ministry of Labor and Social Security approved the four qualifications two years ago and the application of the second batch is under going. The four parts restrict each other to secure the safety of the funds and bring more profits. The country requires that before the end of 2007, the enterprise annuity should be handed over to the four parties to secure the safety operation.

I have made the problem clear by the three conceptions. Thanks.

8. Jiefang Daily: The“Labor Contract Law”has been issued and will take effect soon. Shanghai has its own labor contract regulations. How will the city implement local regulation and the law at the same time?

Bao Danru: It’s a great question. According to Chinese law, local regulation should be adjusted to keep in line with the law. We will add more details if encountering new problems when implementing the new law. The“Labor Contract Law”has been issued and will take effect on January 1, 2008. We have set up a team for the full implement of the law.

Firstly, the team will work with court, the National People’s Congress and law experts to learn about the law and research how to combine local regulation with the law. We have conducted grass-root survey to strengthen the contact with local authorities for the full implement of the law.

Secondly, we will arrange trainings. The country’s labor and social security ministry has begun training in August on local labor authorities. We have launched trainings on major industrial departments and companies in Shanghai after the nationwide training. We also prepare to set up a mechanism to help more laborers learn about the law.

Thirdly, we will compile explanation on common clauses of the law. The explanation is near completion and will be printed soon.

Fourthly, we will promote the law via network and brochures, as well as media. Thanks.

9. Oriental Morning Post: The Mid-Autumn Festival just passed. People discussed a lot about whether a holiday should be set aside for the holiday. We noticed that Shandong Weifang allow residents to rest at the festival this year. What is Shanghai’s attitude to this issue? Another question is about the city’s measures on illegal agencies.

Bao Danru: Holidays can be defined as statutory resting day and statutory holiday in terms of the labor relationship. Statutory resting day and holiday are the main form of holiday.

The crackdown on illegal agencies is the responsibility for labor and social security bureau as well as the public security bureau because the agencies are not registered at industrial and commercial authorities and haven’t qualification, which disturbs the social order. It also affects other government departments which are in charge of market management and house renting. We have jointly cracked down on the illegal agencies and two tasks are necessity in the campaign.

Firstly, we should improve the public job-seeking system. We have made efforts on the system, including introducing jobs for migrant people.

Secondly, we should set up a long-term mechanism on cracking illegal agencies. If anyone complains about the illegal agencies, we can carry out emergency measures to stop the operation of these agencies. We also hope residents can report to us when discovering these agencies. We have arranged 2,500 supervisors citywide to keep an eye on these agencies to keep a stable labor market and create a harmonious labor relationship. Thanks.

Chen Qiwei：This is all of today’s news conference. Thanks for Mr. Bao and reporters.