1. Shanghai Oriental Television: How much was the average residential property in Shanghai during the first half of last year? Differences still exist between local property supply and demand. Can you provide data to explain this?

Cai Xuchu (spokesman for the Shanghai Statistics Bureau): The average price of local residential properties was 4,308 yuan (US$519) during the first half of last year.
As to the differences between housing supply and demand, 50% of housing prices during the first half of this year were below 6,000 yuan per square meter, down on the same period last year. However, supply of mid and low-end residential properties priced below 3,500 yuan per square meter is less than 6,000 yuan-plus units. Since last year, Shanghai has adopted many measures to cap the overheated real estate market, but it will take time before the measures take effect. I think the problems will be solved as time passes.

2. Reuters: It is reported that foreign-invested firms will be excluded from the companies that face power restrictions during peak times, but there are likely to be exceptions. Can you explain which foreign companies and which industries will be exempt?

Cai Xuchu: I have no idea, so am sorry that I can't respond. 
Jiao Yang (Shanghai municipal government spokeswoman): We can contact the Shanghai Economic Commission to find out more on the issue. Under normal circumstances we can guarantee the power supply of foreign-invested firms. At the last press conference, the director of the Shanghai Economic Commission said that if emergencies occur, foreign firms are likely to be affected. If you need more information on the issue we can contact the related departments for you.

3. Eastern Radio Shanghai: What do you think is a  reasonable balance between local property supply and demand? What concrete measures have been adopted by the government to cool the overheated real estate market?

Cai Xuchu: In the local market, over the past several years, sales usually exceeded new housing supply, indicating that demand exceeded supply. This situation has continued for four consecutive years, with greater demands for mid and low-priced homes. Shanghai's government issued six guidelines last year to cool the overheated real estate market.  These measures are currently being implemented.

4. Radio Shanghai Transportation Channel: Shanghai's government is paying great attention to easing traffic congestions this year. With more hot days expected, what measures will be taken to relieve traffic jams?

Jiao Yang: At previous press conferences, I have introduced many measures to ease local traffic.  However, residents still believe that congestion hasn't been reduced. Actually, local departments are adopting many measures to solve the problem, but it will take time for the measures to take effect, especially the construction of road transportation facilities. More scientific methods will be used in transportation management and road construction. If reporters are interested in this issue, we will introduce the details, including road construction and traffic-easing measures, to you soon.

5. Dow Jones Newswires: China has adopted measures to rein in the overheating economy. How do they affect Shanghai's economy? What is Shanghai's expected GDP growth this year? What would GDP growth be if the cooling measures were not introduced?

Cai Xuchu: The cooling measures are only part of the central government's effort to regulate the economy. Thanks to a healthy local economy, the cooling measures have limited effect on the city's economic growth. The pace of GDP growth in the second half of this year will catch up with that of last year, pushing GDP growth for the whole year to an estimated 13 to 14 percent.  On the other hand, the central government's Macro-economic Adjustment and Control Policy, fully executed in Shanghai, has produced positive overall effects. The pace of investment in capital assets has slowed.  Growth of credit loan supplies have declined. Rises in commodity prices have been slowed. The number of local development parks has been reduced to 97. Food and energy shortages have been eased.

6. Shanghai Morning Post: There are complaints that severe weather warnings are not immediately available to local citizens. What measures will be taken to improve the weather notification system? Secondly: You have just mentioned that the local Consumer Price Index (CPI) climbed 1.8% in the first half of this year, which is much slower than the growth felt by local residents. How do you explain this inconsistency?

Jiao Yang: Shanghai is exploring ways to improve it's disaster response system and has achieved great success. The disaster response plan, launched in 2001, created a local emergency response system. Local regulations on early warning signals, which stipulate detailed methods for five kinds of severe weather warning, took effect in March 1 and have improved the city's disaster response capacity.  Despite this success, more emergency measures should be employed to deal with recent weather conditions. At present, citizens are notified of weather forecasts through news media, which often delays implementation of effective measures. I will transmit the complaints to the department concerned. 

Cai Yuchu: In answer to your second question, the Consumer Price Index (CPI) is based on prices of eight categories of goods and services. Local CPI climbed 1.8  percent in the first half of this year, which is lower than the country's estimated 3 percent rise. An increased food price of 6.7 percent was largely responsible for the overall rise in the local CPI. Although prices of the other five categories of goods and services decreased, consumers get a false impression since they are more sensitive to price hikes. This is a frequently asked question, indicating that the authorities should make more effort to enrich residents' economical knowledge.

7. Shanghai Evening Post: You have mentioned during recent press conferences that gas air-conditioners will get government backing. How is this progressing?
 
Jiao Yang: The project is under way. Quite a few large office buildings are starting to use gas air-conditioners. I will help you to get details after the news briefing.

8. Shanghai Dragon TV: Through the media we've discovered that yesterday's storm caused seven deaths and several injuries, mostly due to the collapse of billboards or work sheds at construction sites.  Will the related government department organize an inspection, in the near future, to prevent such occurrences?  Meanwhile, will Shanghai create artificial rainfall on hot days? Are plans being made for this?

Jiao Yang: I'll answer your second question first.  Preparation is being made for artificial rainfall.
Secondly, yesterday's disaster was not purely caused by the rainstorm, but also the gale.  According to some media reports wind speeds measured 9-11 on the relevant scale.  The gale affected power supplies in some areas and caused the collapse of billboards or primitively made work sheds.  It was the sudden winds that caused the casualties and damage to property. 

Earlier in the summer the Shanghai Construction Commission addressed the simultaneous occurrences of floods, tides and typhoons.  It also issued a notice reiterating the  reinforcement of anti-flood measures for construction projects and workplace safety. 

As the typhoon season hasn't arrived more extreme weather is anticipated. The notice laid extra emphasis on inspections, the improvement and fixing of scaffolding, cranes, walls, power lines and temporary electricity boxes, as well as dormitories, warehouses, canteens and other temporary structures at construction sites.

Construction industry watchdogs in downtown areas have organized wide ranging inspections.  At around 5pm yesterday evening, the Shanghai Construction Commission, on receiving the storm warning, immediately sent out, via the SMS group network, a warning to halt work on the city's construction sites.
To improve the anti-disaster network the following points must be considered: 

Firstly, the implementation and reinforcement of the checks required in the notice;

Secondly, the monitoring of typhoons, rainstorms and other serious weather forecasts.  Once receiving the disaster warnings, construction sites throughout the city must suspend work and organize a task force to check the safety precautions;  Thirdly, continuing education of workplace safety at construction sites to reduce the negative impacts of disaster weather; Lastly, further improvement and implementation of emergency response measures.

9. Real Estate Times:  Is Shanghai's current housing-price-to-income rate higher or lower than that prior to 1999?  Rumours that bank interest rates will be raised have resulted in the decline of personal housing loans.  Some people are attempting to pay off their loans more quickly.  What's the spokesperson's comment on this phenomenon?

Cai Xuchu:  I haven't researched the housing-price-to-income rate, so I can't comment.

Jiao Yang:  I suggest specialized newspapers conduct an in depth study.  The banking system is operated under the guidance of the National Regulatory Authority.  It's improper for the local government to comment.

10.  Jiefang Daily:  You just mentioned that Shanghai's FDI projects, signed in the first half-year, have declined 7.6% on the same period last year.  What's the reason for this?  And what will the data show regarding Shanghai's economic development?

Cai Xuchu:  Shanghai FDI projects signed in the first half-year indicate negative growth, with the contractual investment volume up 1.3 percent on the same period last year and actual capital 15 percent higher.  Both the growth rates are prominently lower than those a year previously. 

According to our analysis, the following factors account for the decline:

Firstly, the current recovery of the global economy has attracted capital.  Some key developed countries have demonstrated an improved economy and increased capital absorption, resulting in the slowdown of local FDI.

Secondly, investment absorption in the service sector has been declining.  With the country's continued reform and openness, the service sector is set to expand.

Thirdly,  Shanghai already has a high absorption level, more than doubling country's average.  This tendency follows Shanghai's huge foreign capital absorption in the past years.  Generally speaking, when a country or region's foreign investment scale reaches a certain level, foreign investors will be increasingly sensitive in the area;

Fouthly, Shanghai pays greater attention to the quality of foreign investment.  There are, in Shanghai's foreign investment, a growing number of large projects with investment over US$10 million.  FDI projects in the past two years are mainly large projects valued over US$10 million.  In Shanghai, there are 68 headquarters of cross-national companies and many of their projects are valued over US$10 million.   However, R&D investment is currently not included in FDI.

In addition, since business costs in Shanghai are sometimes higher than in surrounding areas, many projects valued below US$10 million are attracted to these areas.
Meanwhile, the base number of Shanghai's FDI is high.

All the above factors have contributed to Shanghai's FDI situation in the first half-year.  The related government departments are considering and studying these problems to further raise Shanghai's FDI.

11. FM 990, Shanghai Radio Station: As Shanghai's government continues to auction
off driving licenses, concerns are growing over how the funds collected
from the auctions will be disposed? Will you disclose this?

Jiao Yang: The government is obliged to publicize this information. Since 1994, when Shanghai first held driving license auctions as a
measure to control traffic volume, the municipal government has
acquired a total of 4.05 billion yuan, up to June 2004.
In detail, a total of 11,000 car plates and 28,000 motorbike plates were sold in
reserved price auctions from 1994 to 1999.
Beginning in 2000, the city held auctions where no reserve prices were
set. At the beginning of 2001, Shanghai stopped auctioning motorcycle plates.
Between 2000 and June 2004, the city attained a total of 3.58
billion yuan through auctioning 137,000 car plates and 6,000 motorcycle plates.
The entire fund was turned into municipal fiscal income. This has
been used or will be used for infrastructure construction. Up to June,
3.93 billion yuan had been used. Of the sum, 2.5 billion yuan was put into
constructing the mid-ring roads; 1.2 billion yuan was invested in building the
railways and 0.23 billion was spent on traffic facilities. To date the government has retained a balance of more than 100 million yuan.
The government has started to accept commission from motorcycle owners to
auction their plates - 1,2000 plates were auctioned, bringing in 390 million yuan. The entire fund was paid to the owners.

12. Oriental Morning Post: The municipal government requires all aesthetic street lightening to be turned off when the temperature is above 35 centigrade. However many lights are still on.
Has the government noticed this and what measures will be taken?
The second question is for Mr. Cai. You just mentioned that real estate
prices have slowed by 1.2 percent a month. Is this an acceptable speed for
Shanghai? As the macro economy control policy will influence the market next
year, will local property prices fall or will they remain at present levels?

Jiao Yang: I've noticed the report on lighting and have contacted related
departments. Lighting affected includes external lighting and
green belt lightening. So far, external lighting is turned off when
temperatures rise above 35 centigrade, while the green belt lightening remains on.

Cai Xuchu: It's hard to judge whether increases are acceptable based purely
on a figure. However, slowed price rises are what we hope for.  Macro manipulation aims to cool the overheating economy, including the
property market, but not make it crash. The market has it own rules that the
government cannot control. As a result it's hard to predict property prices. All I can say is  thatthe policy to rein in the overheating market has been a success, and the slowing down may continue.

13. South China Morning Post: It's rumoured that a vice president of Shanghai No.1 People Court was arrested. Will you tell us the reason for this arrest?

Jiao Yang: I  have not been informed of this. I will find out and let you know.