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Press Conference of Shanghai Municipal Government Memo(January 7, 2008)
16/1/2008 17:36

1. Wenhui Daily: Hello, IĄŻm from Wenhui Daily. IĄŻve two questions for Mr Wu Yyi. One. There will be three bidding chances in the auction. Would you please tell us what restrictions there will be for the time and price of the three bids? The other question is about the range of the bidding prices that can be changed. How is the range decided? Thank you!

Wu Yi: The three bids will be set in two stages. The first stage will be between 10am and 11am, when the bidders are expected to offer their first bids, otherwise, it will be considered a case of giving up the bid. There are no other restrictions on the bidding prices except that the bid starts at 100 yuan and is in integral times of 100 yuan. The bidding system will remind the bidder if their tender deviates too much (from the reasonable level). In addition, there will be two chances to revise the bids between 11am and 11:30am. There will be restrictions on the sum a bidder can add to or cut from the previous bid. The change must be within 300 yuan and in integral times of 100 yuan.

2. Caijing Magazine: Hello, IĄŻm from the Shanghai office of Caijing Magazine. I have two questions. You said just now that about 1.5 million new cars have been added since the city adopted the (auction) policy. WhatĄŻs the figure based on? Could you give us the number of local residentsĄŻcars bearing a plate from other provinces? The other question. You said the proceeds from the auctions over the past years have gone to public transport programs. Could you name some programs?

Wu Yi: IĄŻll give all the answers. One, the figure of 1.5 million comes from calculation via mathematical model by a third-party research institute that borrows experiences and cases at home and abroad, including those major cities that are economically on a par with Shanghai, and refers to the average level. Cars bearing plates from other provinces is a common sight in any advanced metropolis, and Shanghai may have more controls on the quota than other cities. There has been no statistics on that. About the third question, the city government has arranged auditors to find out where the auction proceeds have gone, as suggested by the PeopleĄŻs Congress and the CPPCC. IĄŻm sure the documents have been given to authorities.

3. Xinmin Evening NewsŁșIĄŻm from Xinmin Evening News. IĄŻd like to ask two questions. You can revise your bids a second or third time according to the system alert, but the system says your new price is out of the required range and asks you to type in another price again. How does it happen? If I have to excuse myself from the auction, can I entrust it to someone else to do the paperwork?

Wu Yi; During the price revision, the system updates you on the range, thatĄŻs to say, based on the lowest possible winning bid. However, the range may fluctuate any time because of revisions by other bidders. So it is advised that the bidders use the Internet bidding system which updates on the fluctuations. The telephone bidding system also can remind the bidders of the price range; however, a time delay has to be taken into account. We hope that the citizens will tender the bids in a rational way. If your first bid is very high, say 50,000 yuan, while the system indicates the lowest possible winning bid is 30,000, which means the bottom of your revision range will be 29,700 yuan. However, the bids will keep fluctuating, and you might fail to revise your bid despite several attempts to call in. Then you have to tender your final bid at 50,000 yuan and pay much more than others. So the bidders should tender their first bid in a rational way, instead of following the so-called guiding price, to avoid unnecessary loss.

The answer to your second question is that the bidders must do the paperwork by themselves at present.

4. Shanghai Morning Post: IĄŻm from Shanghai Morning Post. IĄŻve a question about the Beijing-Shanghai high-speed railway. A news report said today that the project will start construction tomorrow and that the ticket will be about 800 yuan when the railway starts operation. Can you confirm it? And do you think it is a competitive price for five hoursĄŻtrip to Beijing?

Wu Yi: I cannot answer the question because it is irrelevant to the topic of todayĄŻs press conference.

5. Metro Express: Hello! I'm from Metro Express. I have two questions. You said the city will increase the quota for private cars, and what level will it be raised to? From what time will the city begin to increase the quota? The other question is that after the city announced the new bidding system for private car plates, media reports quoted some government departments as saying that the new system will drive down the current distorted high prices of plates to a reasonable level, say 35,000 yuan, which is psychologically acceptable for citizens. IĄŻd like to know what the possible prices will be after the new system is adopted. Thank you!

Wu Yi: Firstly, we are trying to prevent the number of automobiles from growing too fast and promote the public transport, or pave the way for offering better services. When the public transport is well developed and convenience and reliability improve, the traffic will be smoother. WeĄŻre not increasing the quota randomly; weĄŻll be controlling the quota for corporate vehicles and joint ventures and giving priority to private cars. This year we will tighten the quota for vehicles of government departments. Secondly, the psychologically acceptable prices will vary from person to person, depending on the income levels and urgency of buying a car. I must remind the citizens: never take the quota as a rare resource that will steadily appreciate in value once possessed, and never blindly offer a higher price or vie with each other in getting a quota. I think the prices will be within the psychological level if these problems are resolved.

6. Eastday.com: Hello! IĄŻm from Eastday.com. I have a specific question. How does the system define the tender time for the three bids? And will the system suffer jamming because of a sudden surge of bidders? Thank you!

Wu Yi: The time for the bids is defined as the time when the system accepts the bids. As to the possible system jamming caused by the sudden surge of bidders, we have prepared for it by making technological renovations. Theoretically speaking, jamming is ruled out, even when there are a big number of bidders given that the two auctions are merged. However, we donĄŻt rule out jamming at the last minute when many people tender the revised bids simultaneously in the hope of winning the bids at the lowest possible prices. So it is hoped that the bidders will make a rational offer and revise it at the earliest possible time instead of waiting until the last minute to tender or revise the bid.

7. China Times: IĄŻm from China Times. Has the system preset a roof price to ensure the bidders get timely alerts when revising the bids? My second question is whether the city government will adopt stricter policies to control cars bearing plates of other provinces or discriminate these cars from those bearing local plates? Thank you!

Wu Yi: The thing is, as I said just now, that the system will alert you when your first offer deviates too much. There is no preset roof price, but the system will prevent a sharp deviation caused by improper handling of the bidders. As said just now, if you plan an offer of 30,000 yuan but you type in 300,000 yuan, the system will remind you to type in the price again.

There are no restrictions on vehicles bearing plates of other provinces. It is an issue under management of the traffic police.

8. Jiefang Daily: Hello! IĄŻm from Jiefang Daily. IĄŻve two questions. First, you said during the press release just now that eight large car dealers were discovered to be engaged in price rigging. Could you please name these eight businesses? Second, does the auction specify a starting bid? And is the guiding price based on the average tenders? Thank you!

Wu Yi: After several months of investigation, price inspection authorities discovered that eight businesses circulated the so-called guiding bids. The originalĄ°MeasuresĄ±didnĄŻt require the release of information. Some car dealers offer the packaged services and they take the loopholes to drive up the prices to an unreasonably high level. We didnĄŻt release the names of the car dealers in the hope of giving them a chance to rectify. Meanwhile, we told the car dealers that they are inescapably responsible for the offense by their employees and they are expected to observe the rules in future.

As to your second question, the current starting bid is set at 100 yuan, and the tendered bid should be in the integral times of 100 yuan.

Your third question is about the lowest winning bid. If 5,000 plates are available this month, and there are 7,000 bidders, then the 5,000th bid from the top price and time of being tendered will be the lowest winning bid.

9. Shanghai Morning Post: Hello! IĄŻm from Shanghai Morning Post. Does the first bid have to be in the revision range based on the lowest winning bid or is it offered randomly? Thank you!

Wu Yi: It is okay if the first bid is at least 100 yuan and integral times of 100 yuan. The system will update on the number of tendered bids, the lowest bid and two revisions. It is hoped that the bidders will make rational revisions based on the first offer.

10. Wen Wei Po: IĄŻm from Wen Wei Po. IĄŻd like to know whether residents along the new route of the Maglev joining the two airports have gone to the Letters and Complaints department and put up banners and how the government has responded to their complaints.

Chen Qiwei: I said just now that todayĄŻs press conference features a certain topic. Your question is relevant to the topic, and you can contact the spokesperson team after the conference.

11. China Daily: Hello! Mr Wu Yi. IĄŻm from the Shanghai office of China Daily. My question is about the policy to prevent the number of automobiles from growing too fast and give priority to public transport. Has the government come up with a timeframe for new measures such as the charging the road congestion fee and parking fees? Thank you!

Wu Yi: I talked about the road congestion fees at last press conference and there is no further progress. As to the parking fees, the government will publicize it if there is any specific information in a timely manner.

12. Era News: Hello! IĄŻm from Era News: Will this auction offer any lucky numbers? How many private cars are there in Shanghai at present? And how many will there be next year? Besides its efforts to control the rising plate prices, does the city have other plans? Thank you!

Wu Yi: We control the quota but not the numbers. Our auction doesnĄŻt involve any special, lucky numbers. As to the number of automobiles, traffic police have the figures for all automobiles, including the motorcycles, in the city. Other measures include the priority being given to public transport, not only in Shanghai but also in other mainland cities. This idea is meaningful both in terms of environment protection and in terms of saving energy and cutting emission. If this step goes smoothly, more cars will be sold because the car owners will be more willing to take the public transport during rush hour or when it is not so necessary to drive the car. But the prerequisite is that we have a well-developed public transport network, or the subway and buses are more satisfying in terms of reliability, economy and security.

13. Oriental Daily: Hello! IĄŻm from Hong KongĄŻs Oriental Daily. You said it is not convenient to name the eight businesses. Could you tell us their schemes?

Wu Yi. The schemes vary, but they all want to sell more cars. Take an example at last monthĄŻs auction. I was at the auction, which ended at 12pm. Before 11:30am, the bidding prices were quite stable, from above 40,000 yuan to above 50,000 yuan. However, a bidder called in after 11:30am that a certain car dealer sent him a text message saying the guiding price was 55,000 yuan. This text message also was sent to many other bidders at the same time. After that, there were suddenly bids of 55,000, 56,000 and 57,000. So the prices were pushed up. A TV footage in that nightĄŻs newscast showed a bidder saying he won the bid, following the guiding price of 58,000 yuan the car dealer gave him. He said he could have saved 8,000 yuan as it was announced at the auction site that the lowest bid was only 50,000 yuan. There were similar tricks, but I can only offer an example thatĄŻs been reported in newspapers and TV. Thank you!