1. Shanghai Morning Post: My first question: it is reported that overseas investors are pumping huge amounts of capital into city real estate. Local residents consider the existing housing prices already too high to afford. Has the surge of foreign investment driven up the property prices? The second question: recently, traffic jams are a hot topic in Shanghai, and parking cars randomly is one of the main reasons for the congestion. Local car owners think that not purchasing but parking cars is difficult. Can you tell me whether there are any new measures to deal with the parking problems?

Jiao Yang: Based on statistics and analyses, in recent years, local residents were responsible for about 75 percent of all local property purchases, while out-of-town Chinese took 20 percent; this means that only five percent of the property was bought by overseas people. That proportion is reasonable. During the first ten months of this year, Shanghai residents bought a little more than 20 million square meters of apartments, or about 80 percent of the total; out-of-town Chinese purchased nearly four million square meters of housing, or nearly 15.5 percent of the total; overseas people purchased the rest, less than four percent of apartment spaces, or 99,000 square meters, a slight decline from the same period last year. Therefore, the current mix of buyers in the local property market is reasonable.
Shanghai's real estate market is an open and uniform market. It serves local residents and citizens in other Chinese cities, as well as buyers from around the world. As the national economic guidelines, especially credit policies affect the local property market, we will pay special attention to how exchange and interest rate changes and stock market fluctuations might affect the housing market. And we will closely watch the inflow of overseas investment into the Shanghai real estate market.

As to your second question: at the previous press conference, we have elaborated on the measures needed to solve local traffic jams. One of our key measures recently is to crack down on parking cars randomly. We will also establish a long-term effective management system and draft corresponding regulations. Considering parking management a key measure to ease local traffic congestion, the local department is studying regulations for managing local parking lots.

2. Shanghai Business: I have noticed that you have explained the new equity trade regulations, in which the local equity trade management office will not ratify the qualifications of equity trade agencies as they have previously done.  Do you mean the ratification will not be made? You mentioned that it was likely the qualifications of agencies dealing with  state-owned enterprises (SOE) equity trades would be ratified in the near future. Will the local equity trade management office still be in charge of the ratification?

Wu Hongmei (deputy director of Shanghai Municipal State Assets and Equity Administration Office): The revised municipal government regulation on equity trades pays more attention to the government's supervision of the market. According to the administrative licensing law, the Shanghai equity trade management office will not ratify the qualifications of equity trade agencies, but we are more focused on the qualifications of the agencies trading SOE equities. At present, we are preparing for the ratifications.

3.  Securities Times:  Are there any definite plans by the municipal government or the Shanghai Municipal State-owned Assets Supervision and Administration Commission to sell large blocks of shares to overseas investors?

Wu Hongmei:  Shanghai is pushing ahead its new round of reforms with the state-owned enterprises and assets under the supervision of the municipal leadership.  The restructuring of some large companies has already proven the vitality of the reform program.  Brilliance, Jinjiang and Shanghai Electric Group have all reported satisfactory performance in management and business after restructuring.  Reform and restructuring plans for some other groups are still progressing.

4. Oriental Morning Post: There are many media reports about the functions of the public housing fund, with some indicating that the fund may be used for new purposes such as covering labor insurance, poverty insurance, and medical insurance.  Can you comment on these reports?  To Dean Wu: Shanghai will adopt a membership system for state assets and equity exchanges while continuing the trading of assets owned by the state and organizations.  Can you explain the membership system?

Jiao Yang:  There are many media reports about the new functions of the pubic housing fund. Approved by the Shanghai People's Congress, the Shanghai Public Housing Fund Regulation has been in effect since July 1, 1996. It was revised in 2002 after the State Council published the country's public housing fund regulations in 1999.

To better align the local regulations with the national rules, the Shanghai People's Congress has added another revision of the local regulations to its work plan for this year. After this revision, the regulations will be published under the title of "Several Regulations of Management for Shanghai's Public Housing Fund".

Under the new system, supplements and specifications will be added to some local rules based on the national rules, and some rules will be clarified according to Shanghai's practical situations.

There are media reports stating that the use of public housing funds will be expanded to include other purposes.  I can confirm here that the purpose of the fund, long-term housing assistance for local working people, is to finance the participants so that they can obtain proper housing.

Since the draft revision of the regulations is still under deliberation at the Shanghai People's Congress, details of the new rules cannot be published yet.  But there is no uncertainty about the purpose of the fund.

Wu Hongmei: The second question. Shanghai's assets and equity exchange market has a distinct character from those in other cities; that is, brokering institutions are involved in the brokering business of the trade. According to the new rule, brokering institutions engaged in asset and equity exchanges with corporate qualifications can apply to be members of the assets and equity exchange.

Our experience in the past few years indicates that brokers play an active role in Shanghai's assets and equity trade, which has totaled 300 billion yuan (US$36 billion). The trading of big enterprise and group assets is better when carried out in this fashion.

5.Times: The fourth item in the newly published management approaches on property transactions says: to protect employees' legal rights and interests, one negative vote from the employee congress could halt a company's property transaction. Does that mean the employee congress enjoys the power of a veto?

Wu Hongmei: Both this approach and the guidance from the Shanghai Municipal State-owned Assets Supervision and Administration Commission mention the importance of protecting the legal rights and interests of employees. The reform of an enterprise should be considered by its employee congress.  Projects relating to employees' allocations should be approved by its employee congress.  As for your question, my answer is "Yes".

6.Youth Daily Shanghai: You mentioned just now that the new approaches encourage non-state-owned property transactions.  Does the government provide any other favorable policies besides reducing the registration period for the changes?

Wu Hongmei: According to the statistics, state-owned and collectively owned enterprises accounted for 72 percent of property transactions during the first ten months of this year. 49 percent of the buyers were state owned enterprizes,which means there are more and more non-state-owned enterprises participating in property exchanges.   The processes of exchanges for state-owned and non-state-owned enterprises are exactly the same.  We welcome more non-state-owned exchanges and foreign capital.

7.Shanghai Afternoon Post: When will the 1st Mayor's Quality Award begin? When do applications begin and when is the judging? And what is the amount of the prize?

Jiao Yang:The Mayor's Quality Award has been approved via the standing conference of the municipal government.  The regulations for this award, to be put into practice next year, are still under development.  Firstly, the Shanghai Quality and Technical Supervision Bureau (SQTSB) will issued a notice at the beginning of next year.  The government departments will then start to receive declarations from organizations and individuals and examine their qualifications.  Secondly, from June to August are the months for on-site appraisals and a comprehensive judgment by the award examing and approving committee.  Thirdly, the results will be published and sent for final confirmation by the municipal government.  Lastly, the awards will be issued at the SQTSB work conference held at the end of next September.  The whole process requires about 8 months.  The details are available on the city's official website (www.shanghai.gov.cn) and SQTSB's website (www.shzj.gov.cn).  Bulletins describing this process will also be published by related news medias.

8. Jiefang Daily: The newly-issued regulations for the local property market have introduced the mechanism of letting market forces decide transaction prices. What is the difference between the revised clause and the previous one? Secondly, the new regulations add a clause to govern mergers and acquisitions (M&A) by foreign investors. Should foreign investors and their domestic counterparts follow different procedures when engaged in M&A?

Wu Hongmei: As China becomes more and more market-oriented, our understanding of how to set transaction prices for state-owned property has deepened. We have realized that transaction prices should be decided by the market. Before the bidding occurs, the assets must undergo a general check, audit and evaluation. Property transactions need evaluations for reference purposes, while final transaction prices are decided by market. This idea is more clearly pointed out in the new regulations.
In answer to your second question, the government set out guidelines for the foreign capital M&A of state-owned enterprises several years ago. The newly-issued regulations allow foreign investors to bid in the local property market. Since the opening bid helps an asset establish its market value, a specific clause (Clause 31) was added to the new regulations to govern foreign capital M&A activity.

9. Dragon TV: Can citizens take part in the appraisal of the Mayor's Award for product quality?

Jiao Yang: The Mayor's Quality Award is the highest quality award given by the municipal government. The award appraisal process adheres to the principle of being scientific, open and fair. There are standard procedures for the award appraisal. All the processes, including application, examination and appraisal, are well-organized. Here are the whole appraisal processes: Applicants will apply on a voluntary basis; Candidates will be nominated by departments in charge or trade organizations; Detailed qualification appraisals of candidates will be carried out; On-site appraisals will be made; A comprehensive judgment will be given; The results will be published and sent for final confirmation. Before the announcement of final winners, the name list of the candidates will be published on the official website and media. We welcome and will attach great importance to comments from local residents.