1. South China Morning Post: You have just mentioned that Shanghai approved a number of solely-owned Hong Kong advertising companies under the Hong Kong and Mainland China Closer Economic Partnership Arrangement (CEPA). How about the other 17 industries? Which industries will enjoy priority?

Pan Longqing (Director of Shanghai Foreign Economic & Trade Committee and also Shanghai Foreign Investment Commission): Shanghai has signed a cooperative framework with Hong Kong in eight areas. To date, Hong Kong companies have invested more than US$100 million in Shanghai. In the retail sector, more than 10 million yuan (US$1.2 million) in tariffs has been exempted. Our cooperation is well under way. We approved more than ten Hong Kong logistic firms to open businesses in Shanghai and 19 local companies to invest in Hong Kong in aeas such as trade, processing, real estate companies and those seeking listings there. We have also cooperated with Hong Kong airports. Projects in cooperation of intent with Hong Kong companies are valued at more than three billion yuan totally.

2. Phoenix Satellite TV: Has China's macro-adjustment policy slowed the pace of Shanghai in attracting foreign investments? The document said that Shanghai would seek overseas partners for restructuring. Can you tell me what are the relevant projects?

Pan Longqing: China's macro-adjustment policy targets some industries, especially restricting projects with high rates of energy consumption but low efficiency, such as small steel and cement plants. To answer your question, I will inform you about the local situation: the last five years have been the most flourishing period for local foreign investments after the country's opening and reform policy, especially this year when the local contracted foreign funds hit a record high; the local foreign investments from January to May this year declined from the same period last year. There were more foreign funds early last year while less in the latter part of the year, but this year, the amount is increasing steadily. After the macro-adjustment policy, the volume of monthly foreign investment hasn't declined, but has increased from the previous four months; Shanghai reported a 15.5 percent increase in foreign investment last year, and the proportion for this year is predicted to be more than 10 percent, with a slower increase compared to a year earlier. However, the total amount of foreign investments this year is still the highest in record.

3. STV News Channel:  Several accidents have occurred at local construction sites, such as the collapse of the Beihong Road tunnel project between the Beihuan Expressway and the Middle Ring Road.  Has the government discovered the causes of the accident? Also this month, five traffic accidents involving public buses were reported.  Do these cases have some common causes?

Jiao Yang: On October 23, a collapse was reported at the construction site of the northern section of the Jiaohuan Expressway, which is under construction.  According to the primary checks by experts, the accident occurred because of inappropriate operation.  The quality of the T girder component was of no problem. 
Investigation is also under way on another collapse on October 25 at the Beihong Road tunnel project site along the Middle Ring Road.
I think the reporter has a good suggestion: we should emphasize workplace safety and construction quality in the wake of the rising numbers of accidents at construction sites.

4. China Business:  From January to September, Shanghai's exports reached US$53.1 billion.  What volume of tax rebates will the municipal government disperse?  Will the rebates incur local trade protectionism?  Also in the first nine months, Shanghai has attracted US$9.2 billion in foreign investment. How much foreign capital has left Shanghai?  Mostly in what sectors? And where did it relocate to?

Pan Longqing: This year, foreign trade has seen a good development in exports.  According to the nation's new tax rebate policy, the central and local governments share different proportions of the rebates.  The new policy, which takes place this year, is partly to solve the unpaid rebates left over from the previous years. 
At the national level, the policy, which fully considers the interests of corporations and their operations, is a simulative measure. 

As to the amount of the rebates the Shanghai government must provide this year, I think 4 billion yuan should cover them  if exports reach US$70 billion this year.  The figure was 3 billion yuan when the exports were US$60 billion.

Shanghai's governments at all levels, including the financial departments, are active in the rebate work.  We have set aside enough money, and now we are waiting for the enterprises to obtain their rebates, because they have to undergo a series of procedures before getting their taxes back.  Three-fourths of the due rebates are expected to be returned by the end of this year, while the rest will be left over until next year.
In this area, Shanghai definitely doesn't apply local protectionism.  We operate according to the law.

For the second question.  This year we have attracted US$9.2 billion in foreign investment.  As of today, there are more than 35,400 foreign invested companies in the city, with a total contractual foreign capital of US$83 billion. US$52 billion has been actually used.

Because of problems with land rentals and the enterprises' own development strategy, some companies may continue their development in Shanghai while others, mostly labor-intensive or those involved in primitive processing work, may have to move out to Shanghai's neighboring areas or other places. I believe this result meets with the corporations' own development demand.
Our trade and economic commission positively supports these companies' periodical development and transition.  But I can't provide accurate figures as to how much capital has moved out of Shanghai and in what sectors or areas this capital is involved.

5.Xinhua news agency: The amalgamation of enterprises has become the main target for capital flow.  Could you please describe the situation of foreign capital relating to amalgamations now in Shanghai and what the future will be?
Pan Longqing:It's an inevitable trend for these amalgamations of state-owned enterprises, including the international ones. There are mainly three types in Shanghai:
*the combinations of giant enterprises and international companies, such as the Shanghai Automobile Industrial Corporation (Group) and Ssangyong and Dawoo Korea;
*the entry permission for foreign capital during the reform in several state-owned groups, such as the 30-percent-share option specially spared for the  international fund management companies during the reform of the Shanghai Electric Group; and
 *encouraging some enterprises to be listed on the markets of home and abroad.

6.Daily Yumiuri: A prostitution incident relating to Japanese tourists happened this May.  Two of the Japanese were prosecuted as pimps. This incident won't be the last one in Shanghai. So, what is your attitude?
Jiao Yang: Sorry.  We do not have complete and accurate information about the incident you mentioned.  To govern according to the law is the main attitude of the municipal government.

7.Jie Fang Daily: It is said that the northern extension of Metro Line One is expected to be completed by the end of this year.  Is that true?
Jiao Yang:As for that, I do not have any authentic information.  But I could inform you of that on the reference from the municipal construction community.

8. Oriental Morning Post: What is the ratio of foreign investment in the local service industry to that in the local manufacturing industry? Is it possible that the service sector will attract as much overseas investment as the manufacturing sector in the future? Secondly, the government is cosidering those investment projects that won't be a drain on land resources. What measures will be taken to promote land use efficiency in the manufacturing industry, which is highly reliant on land resources?

Pan Longqing: The ratio of the amount of foreign investment in the sevice sector to that in the manufacturing sector was about 3:7 last year. The proportion of contractual overseas investment going into the service sector rose to 38 percent during the first nine months of this year. This growth does not mean the importance of manufacturing is declining. According to a planned layout, the city suburbs will develop the secondary industry while the sevice sector will account for 80 percent to 85 percent of all the industries in the downtown area. In answer to your second question, the government will encourage those investment projects that either do not require vast areas of land or can use existing facilities and buildings. The urban district will develop a so-called "housing economy" which recognizes the emergence of residential real estate as the primary driver of economic growth. Besides, industrial parks will be reconstructed to house more manufacturing plants and the open spaces of local factories will be utilized as the location of new projects. There is huge room for improvement in land use efficiency in the city's suburb.

9. Financial Times: Is it likely that foreign investors will be allowed to purchase over 50 percent shares of a state enterprise in the future? It is said that local private enterprises are incapable of acquiring state enterprises. What's your opinion about that?

Pan Longqing: State, private and overseas capital are all important to the local economy. Local enterprises should utilize these three sources of capital according to their actual situations.