At a press conference on November 5, Shanghai Municipal Government spokesman Jiao Yang introduced the following issues, and answered reporters' questions after explaining the recent price increases of cooking oil and other staple and non-staple food.

Shanghai will issue key policies to enhance the development of social and private medical facilities, and extend its crackdown on the misuse of official and special-use vehicles.

Hong Kong Wen Wei Po: Shanghai Mayor Han Zheng led a delegation to visit Hong Kong recently, reaching agreements with the Hong Kong government in eight fields. Are there any concrete results now after the visit?

Jiao Yang: During his visit in Hong Kong, Mayor Han Zheng was taking an active and concrete attitude to communicate and exchange with the Hong Kong government, reaching bilateral cooperative agreements in eight fields. The great achievements of the visit have paved a new way for the cooperation between Shanghai and Hong Kong. The Shanghai Municipal Government is focusing on making concrete steps after the visit. The day before yesterday, local leaders listened to the reports of the Shanghai delegation, and studied the issue of cooperating with Hong Kong in eight fields. Shanghai Party Secretary Chen Liangyu and Mayor Han Zheng required the government departments to take concrete measures to launch cooperative projects in related fields. I believe Shanghai can make new achievements in the near future.

Shanghai Television Station: There are two kinds of private medical institutes: one is transformed from public hospitals and the other is directly invested by private firms or institutes. How many private medical institutes in Shanghai? The system changing of public hospitals involves problems of asset evaluation and medical insurance. Please give us explanation.

Jiao Yang: Currently, Shanghai is home to 79 private hospitals with about 4,000 beds. The private facilities in the city are mainly mid and small sized ones, with only nearly 20 having more than 100 beds. The private facilities mainly provide health care for the elderly and mentally disturbed. Generally speaking, the private medical institutes are currently in good operation, with some generating profits. There are a few government-run medical institutes changing to the private system, but I believe the new policies can largely drive up that number. As to the medical insurance issue, the privately-held medical institutes that offer fundamental medical services will be qualified and evaluated by the medical department with the same requirements and procedures as the public hospitals. The facilities changed from public ones will enjoy the same treatment as the public hospitals, and can keep their qualification in the local medical insurance system after being qualified by the related departments.

Oriental Morning News: Is there any measure taken in response to the state council call for more attention to grain production and peasant income? Will the government encourage the medical institutions to become larger? Will the government offer some kind of help if they do?

Jiao Yang: The answer to the second question is positive. The private medical institutions coming into being after the reforms will enjoy equal rights and benefits with the public ones. The scale of such institutions can be determined by private operators themselves. Factors considered will include the amount of cash, equipment and human resources. The public-to-private transition should be administered in line with existing laws and statutes.

For the first question, the local government has placed emphasis on grain production, cropland reservation and peasant income for years. Shanghai is a city striding towards modernization, with increasing problems in agriculture, but quite different from those of other cities. Growing grain doesn’t produce high yields and returns here, compared to other crops, but we still work hard to make sure that there is enough land for ploughing and that the annual output is satisfactory. Because "what people need most is to eat their fill," (an ancient Chinese saying. Grain production affects peasants' lives greatly and we'll never underestimate its significance.

There is a total area of 2 million mu in Shanghai's suburbs for grain production now, with an annual output of 2 billion jin.

With high-tech input, we have enhanced grain productivity to somewhere above 1,000 jin per mu on average over the past decade, and raised the average to about 1,100 jin/mu for the last five years.

We plan to construct 1 million mu of high-tech, high-yield and high-benefit grain fields in three years, with 600,000 mu completed already.

We have preferential policies for major grain production districts and counties, peasants with huge production volumes and those involved in grain production only, in an effort to raise their morale.

We protect the tillable land in two ways: reclamation to ensure the quantity; and herding-farming combination to ensure the quality. We'll encourage the use of organic and stalk fertilizer to make the land richer.

The government also pays great attention to the peasants' revenue rise. With the efforts of management at all levels, the peasants are earning more year on year. The rising rate in their yearly revenue grew from 5.1 percent in 2001 to 6.2 percent in 2002 and is expected to reach 7 percent this year.

More efforts we have made include increased working opportunities and an improved social insurance system for the peasants. In this way, we reduce their liabilities and ensure their yearly returns.

Over the past few years, we have created almost 60,000 new jobs, not related to farming or planting, in the suburbs each year. This year's figure is expected to top 70,000.

Peasants' income from non-farming jobs accounted for 83 percent of their total yearly income last year, up considerably from 73 percent in 1999.

We also issued the zero taxation policy at the beginning of the year.

Tax reforms have exempted the peasants from an extra payment of 93 yuan a year on average.

Other measures taken to restructure the agricultural sector, such as developing the service sector, uniting the peasants and marketing their products in a better and orderly way, have also helped the peasants' raise income.

Lianhe Zaobao (Singapore): You mentioned right now that foreign capital can make inroads in the medicare sector in many ways. How about their application now? Are there any foreign investors that have applied for the practice, and who are they? What are their qualifications?

Jiao Yang: We welcome foreign companies' participation in local medical institutions, especially in those with high technology and advanced management. Foreign capital can buy stakes into or cooperate with local medical institutions currently, but are not yet allowed to run an independent hospital wholly owned by themselves. During the process, foreign investors should obey the rules of the Ministry of Health of China and the Ministry of Foreign Economics and Trade of China (now Ministry of Commerce), according to WTO provisions.

The two ministries have jointly issued an interim regulation on the management of joint-venture and cooperative medical institutions, putting a lower limit on the total investment volume - 20 million yuan or more - needed to start business. It also rules that the Chinese cooperator should hold a stake of higher than 30 percent in all the shares or stocks. These are the qualifications we've adhered to for long.

Shanghai Dragon TV: Is there any change to the much touted arrangement of Yang Liwei's visit to the Industrial Fair, together with the returning cabin of the Shenzhou V? Can you give us any hints?

Jiao Yang: It's of everyone's concern. I've noticed that media coverage about it has been huge lately. It's really a matter of significance. Yang Liwei is an aeronautic hero who has excited the whole nation and deserves reverence from all. As far as I know, Yang will visit Shanghai with his crew soon. I'm looking forward to their visit as ardently as you, the people of Shanghai. The government is making arrangements and preparations with haste, but the timetable is yet to be confirmed and released to the public. We'll inform you in time.

OTV: You've referred to the 79 privately owned medical institutions. My question is about the overall situation of Shanghai's medical facilities: How many of them are public and how many private? Is there a clear goal for the series of policies? For instance, how many private hospitals do you expect to set up by a certain year? What will be the biggest benefit for local people after implementation of these policies?

Jiao Yang: Most of Shanghai's existing medical institutions are run by the state. All the Grade one, two and three hospitals are public institutions. But I'm unable to provide the detailed figures in this area right now. You may turn to the officials from Shanghai Public Heath Bureau now present at the conference. For the timetable you mentioned, as far as I know, there's no such a schedule. The work is a gradual and natural one. Though the government will make every effort to push it ahead, the market-oriented mechanism will play a key role. Local people are the biggest beneficiaries of the policies. In addition to the current basic medical insurance service, they will enjoy more diversified medical services, a big advancement from the existing medical service system.

21st Century Business Herald: What's the background of the government's unveiling of the policy to encourage private medical institutions? Does it mark a new breakthrough in Shanghai's medical sector financing?

Jiao Yang: The purpose for encouraging private medical institutions is to meet the demand for the development of the socialist market. Under the central government's requirement to make full use of social capital sources, we introduce social funds to the medical sector and form a more diversified medical system. The policy is not drafted in one action, but based on a large quantity of surveys, research and arguments by several government departments, including the reform committee, public health bureau and medical insurance bureau. As a result, the policy, based on opinions from various departments, is believed able to form a diversified medical service system while insuring basic medical services. Officials from the departments I've mentioned are present. You may interview them for more information.

The policies, of course, mark breakthroughs in Shanghai's financing system for the medical sector. Funds, not only from the state, but also from other non-public channels, are allowed for the sector. As for the detailed operation regulations, you may refer to the rules in application, registration, operation and management.

Shanghai Daily: Will people enjoy medical insurance service at the private hospitals? It's said that Chang Gung Memorial Hospital from Taiwan was planning to select a site in Shanghai to launch a local facility as early as two years ago. The plan had been suspended because the Shanghai medical authority, as the rumor spread, was against the idea out of fear of intense competition in the local medical market. Another rumor came that the hospital had wished to be included into Shanghai's medical insurance system but was turned down by the Shanghai authority. Will the policy announced today help the hospital with its local plans?

Jiao Yang: I will answer your question. In principle, we welcome private, overseas and diversified capital to medical facilities. I'm not very clear about the case you've mentioned. But I've noticed you used the word "rumor". Rumor is inaccurate. Our unveiling of the policy is aimed at introducing more types of funding into Shanghai's medical sector and diversifying the local development of the public health system. As for your question whether the private facilities are included into the city's medical insurance system, our experts present here will help you.

(HK) Phoenix TV: Following Shanghai Mayor Han Zheng's visit to Hong Kong, some Hong Kong experts think his trip is to promote the public relations of Shanghai rather than make concrete progress. What's your comment?

Jiao Yang: some reporters raised that question at Mayor Han Zheng's last media conference in Hong Kong before he concluded the trip. I think the key to the question depends on what agreements have been reached during the trip. A major fruit of the HK trip is to establish a cooperation mechanism between Shanghai and Hong Kong, which is to ensure long-term cooperation and sustainable development. Therefore, we can see the trip enforces the cooperation between us two rather than simply making a show. The two parties have communicated in eight areas and reached agreements. In addition to some concrete deals, we have established a cooperation mechanism, such as an irregular economic and trade cooperation meeting. Under this mechanism, both parties have a work group to ensure the full implementation of the deals reached at the meeting. HK's chief executive Tung Chihwa heads the HK group while Shanghai's Mayor Han Zheng will lead the local team. Vice mayor Jiang Sixian will assist Han with the work. The Shanghai-Hong Kong cooperation coordinative group has set up its office in Shanghai, a body to promote the cooperation. As for the cooperation in the eight areas, each area government department has named a specific team and a director to take charge. And the coordinative office will require the departments to feedback their work and hand in a report every two weeks. In this case, I think the cooperation between the two are active, concrete and gradual. There are three characteristics about the Shanghai-Hong Kong cooperation mechanism. First, the mechanism is government-backed, private-associated, market-oriented and enterprise-dominated. Mayor Han has said in Hong Kong that Shanghai and Hong Kong have enjoyed a long-term cooperation. The only probable deficiency is the support of government. So, this time the local government has made great efforts to contribute. Secondly, cooperation of the two cities will focus on the opening-up of the service area. The cooperation agreement signed between the two parties' airport authorities is an initial fruit of the cooperation. Thirdly, in a cooperative manner, we will achieve mutual development via substantial projects. We don't talk air in this trip, but eye the concrete cooperation programs such as for the airport and human resources. In the human resources area, we have solid plans for the posts, requirements, payments and responsibilities. In short, it's incorrect to say the Shanghai-Hong Kong economic cooperation program is more of a public relations promotion.

Takungpao (Hong Kong): My question is related to the previous one. It's presumed that there is competition between Shanghai and Hong Kong, and many Hong Kong people worry that Shanghai will take Hong Kong's place. So, what impression did Hong Kong leave on the members of the Shanghai visiting delegation?

Jiao Yang: Your question was asked by many Hong Kong reporters during our visit. It's also a core of concern among the reporters here. Hong Kong is a globally recognized financial, trade, shipping, tourism and exhibition center. This is how the world thinks of Hong Kong, and it is also my impression of the city. Hong Kong has a mature legal system, a close connection with the global market, experience in management, and abundant professional talents. Our delegation admires all these advantages, and will take them for reference for Shanghai's development. As for cooperation between the two cities, we will learn from Hong Kong's market methods of operation and their management experience in finance, aviation, and shipping. This is important for Shanghai's development in the market economy and increasing competitiveness. Therefore, as Shanghai Mayor Han Zheng emphasized before the visit, the tour aims to learn from Hong Kong and promote exchange and cooperation. The focus of this trip is not to absorb investment, or to promote Shanghai's image in Hong Kong.

Youth Daily: Currently non-governmental capital is encouraged to take part in managing medical institutes in the form of establishing hospital management companies. In what mode will this company operate? Is there any hospital management company is Shanghai? Most citizens think privately-run hospitals are hospitals for rich people because these hospitals all charge high fees. Are there any rules to regulate fees?

Jiao Yang: To introduce non-governmental force into medical institute management is a new issue for us. Yet to invest in a hospital and to manage it are two different concepts. The concerned parties in Shanghai are investigating and discussing the issue, and will work out corresponding regulations. Surely, this is a direction, a principal. But the detailed rules need to be brought into perfection gradually.

To answer your second question, private hospitals are not necessarily hospitals for the rich. True, some private hospitals charge high fees. But most privately run medical institutes specialize in senior citizen nursing and mental recovery assistance. I don’t think they will charge high. In future, we will mainly leave it to the market to decide how much a hospital should charge. The high price will naturally come down if no patients go to these hospitals. While if there are still many patients going despite the high price, it shows the hospital's service is worthwhile.

Xinhua News Agency: My concern is not the high fee charged by private hospitals, but their management. For instance, will the medical authority look into the problem of hospitals selling lesser-quality drugs? Another question: Shanghai mainly relies on other provinces for grain supply. Has the city made any move to guarantee its food supply and storage?

Jiao Yang: To sell lesser-quality drugs is very serious problem as it directly harms citizen's health and safety. The concerned parties, for instance the medical and drug supervision administration, have already taken it into consideration, and will take further measures. If you have interest on this topic, you may investigate the case more thoroughly. Our principle is clear: The health and safety of citizens must be guaranteed.

Shanghai is not self-supporting on grain supply for the 16 million people in the city, that's true. Yet the government is deeply concerned on how suitable large grain storage is for Shanghai. This is a problem of long-term concern, the related dejpartment has worked out a detailed plan on this issue; it's not a new topic. Please don't worry. Shanghai has abundant food storage for its citizens?demands. The government has also made preparations in case of an emergency. The agricultural commission and economic commission are fully aware of this issue.