1. Shanghai Morning Post: Director Jiang, can you first tell us more about the modern service industry's charging system? Next, the annual per capita income threshold, for families to apply for subsidized loans in buying homes, has been lowered by Local department.  This of course means that more families can be the applicants; however, they can only purchase apartments that are smaller than 90 square meters and priced below 3,500 yuan (US$422) per square meter, which are the same standards as before. Can spokeswoman Jiao tell us whether or not the standard will change? Finally, I would like to know the latest on the helicopter that crashed into the Yangtze River basin early this month. Has the black box been decoded? How is the injured pilot?

Jiang Yingshi (director of Shanghai Municipal Development & Reform Commission): Securing the establishment of a sound pricing and management system, one that's in tune with the traits of the local service industry, will augment its development in these modern times. We must divide the pricing system into different classifications. Basic service charges from ordinary citizens must be kept stable, one of the key moves in implementing the central government's macro-adjustment policy. Restrictions on charging for high-end services should be lifted, to help boost development of a modern service industry, and improve the investment and money-raising systems within the service sector. Also, service charges should be in relation to service consumption. Economic growth doesn't totally depend on investments and exports, and consumption is related to charge. We are considering expanding the consumption policies.

Jiao Yang (Spokeswoman): Offering subsidized loans comes down to the housing policy. I will introduce it to you in detail. Shanghai's aim to improve the local housing policy will solve problems at three different levels, based on different family situations. First, families receiving the city's minimum incomes and having living space below seven square meters per capita would be allowed to lease economy apartments, increasing this year's number of beneficiaries, from 13,000 to 18,000. Second, for those families living above the required standards, yet still have difficult living conditions, the local government will continue to maintain low rents on public housing, renovate old properties and replace the flat roofs of multi-story residential buildings with sloped ones. Third, for ordinary families with the desire to purchase homes, but without enough buying capability, the government will lower the requirements for them to receive subsidized loans. Our goal is to provide real benefits to all local residents and allow them to enjoy the achievements of China's reform and opening policy.

As to the helicopter crashing, currently known is that the black box has been found and sent to the relevant unit in Beijing to be decoded. Local department is continuing to search for those missing. The injured pilot is reportedly out of danger, in stable condition and receiving further treatment.

2. Dragon TV: Recent reports say that Shanghai individuals, following in the footsteps of Nanjing and Beijing, have been raising funds to build their own properties. What's the attitude of the Shanghai municipal government? Will it intervene? If there are no relevant laws on such behavior, will Shanghai issue new policy?

Jiao Yang: We have taken notice of these reports and I believe the relevant departments will, in the light of the new circumstances, work policies out.

3. AFP: It has just been reported today that the Shanghai Automotive Industry Corporation has acquired MG Rover Group Ltd., the British car firm, with help from the Nanjing Motor Group which will hold 20 percent of the stakes.
Is it true?

Jiao Yang: I am sorry that, for the latest report you mentioned I didn't get information as timely as you, so I cannot comment.

4. STV News Channel: You mentioned the key locations for developing a modern service industry would be along the Huangpu River and Suzhou Creek. Can you disclose some concrete details on any special projects?  Since real estate, a pivotal sector, is not involved in any part of the six pillar sectors act guidelines for a modern service industry, what then is the development direction of the property sector?

Jiang Yingshi: We have publicized the service areas that will be created during the development of Shanghai's modern service industry.  There have been three categories of areas planned.
Category-one includes the first-class areas of Shanghai's service industry, and we have already mentioned Shanghai will create three service industry areas:
The first is along the Huangpu River, which will bank on its riverside development and the World Expo;
The second is along the Suzhou Creek, where development will combine the creativity industry with the development of old workshops and warehouses along the creek;
The third area stretches from Yan'an Road to Pudong's Century Boulevard, which will mainly focus on hotels and office buildings.
As Shanghai's first-class service industry areas, these three sections are described as "one vertical and two horizontal lines".

Category-two includes the downtown areas.  We are primarily considering planning and building 12 modern service areas.
1. Lujiazui Financial and Trade Zone area, on the Bund;
2. World Expo-Huamu international exhibition area;
3. Zhangjiang high-tech creative cultures and information technology area;
4. Xizang Road area, that surrounds People's Square;
5. Huaihai Road M. international fashion-business area;
6. Nanjing Road W. specialty services area;
7. Xujiahui knowledge, culture and comprehensive business area;
8. Hongqiao overseas business area;
9. North Bund shipping service area;
10.Jiangwan-Wujiaochang science and technology business area;
11.Changfeng environmental business areas;
12.Zhabei Everbright modern-transport business area.

Category-three includes areas in the suburbs.  We hope that in these areas the service industry will gain support from some key basic infrastructural facilities and industrial bases there.  There are seven areas:
1. International logistics and free-trade logistics area in Nanhui District's Lingang New City;
2. Education R&D and service area in Songjiang New City;
3. Automotive culture and service area in Jiading New City;
4. Ecological vacation and tourism area on the three islands of Chongming, Changxing and Hengsha;
5. Zizhu science park area;
6. Entertainment and tourism area along the north bank of Hangzhou Bay;
7. Old town tourism area in Songjiang District's Sheshan Mountain and Qingpu District's Dianshan Lake.

As for your second question, I've mentioned earlier in the press conference that Shanghai, during pursuit of its strategic service industry development target, still lists the property sector as a pivotal industry for a stable development.  We hope over the next five years, the revenues of the service industry will steadily grow and reach 750 billion yuan by 2010.  Last year's figure of 356.5 billion yuan represented 47.9 percent of our GDP.

To achieve the goal, we will first develop the pivotal sectors of finance, trade, logistics and real estate, and then new sectors such as information services, shipping, exhibition, tourism and intermediate services, and finally those emerging industries like entertainment, education and training, health care and sporting.
In this sense, I believe the real estate sector is still a pivotal sector on which Shanghai will place emphasis, and achieve further development.

5. Oriental Morning Post: I have three questions. First, how far along has Shanghai's reform of its public institutions come? Second, how will the service industry sectors be classified?  Third, I've heard about an airline company under the control of Shanghai Spring International.  So, what's your view on the opening up of the service industry to private investors?

Jiang Yingshi: Shanghai's party commission and municipal government regard reform of public institutions highly, stressing reinforced of planning work and trial implementations.  At this year's sessions of the Peoples Congress, Mayor Han Zheng clearly said the government will, during its functional reform, choose three departments (health bureau, traffic administration and the water affairs bureau) to conduct trial implementations of the reform and separate their government administrative responsibilities from business operations. 

As for your second question, we hope revenues from the pivotal sectors of the modern service industry will reach around 480 billion yuan in 2010 and sectors that will expand rapidly, such as information and shipping services, will produce around 230 billion yuan.  The figure for the emerging sectors, like culture and entertainment, should exceed 100 billion yuan.
(Editor's note: There is some overlap of data.)

As to the third question, while pushing the service industry development forward, it will further "open up", which will help the reform program.  We encourage overseas and private investors to participate in the service industry's development.  The investors of our service industry will be diversified, and entitled to equal treatment.  More investment areas will be opened to them.

6. Wenhui Daily: We know that the Shanghai Municipal Development and Reform Commission is the local administration on investments. Would you please comment on the investment trends for this year and on any plans for major investment projects? Consumer prices for Shanghai were relatively low in 2004, compared with the rest of the country. How about this year?

Jiang Yingshi: As for the first question, Shanghai reaped in 308.47 billion yuan from investment revenue last year, up 25.8 percent from that in 2003. The rise was in line with the national average; however, Shanghai's announcement was earlier than the rest of the nation. Last year, we optimized the investment structure, focusing on those areas with regional advantages, giving more attention to the larger scale and more important projects. 2005 will be the last year of our "Tenth Five Year Plan," and while 50 construction projects are still on-going, we are seeing an annual investment of some 55 billion yuan. We'll announce our plan after we get the approval from the Shanghai People's Congress. The construction projects will have four areas of focus. Firstly, infrastructural construction aims to make the city function better. Secondly, projects aiming to sharpen the city's edge in industrial competitiveness. Thirdly, projects targeting the social establishments. Finally, projects focusing on preparations for the World Expo., Mayor Han Zheng visited the construction site of the Yangshan Deep Water Harbor, before the Spring Festival, listing it highest on this year's plan, reflecting the city's resolution to build itself into a world-class trade, financial, economic and shipping center - especially a world-class shipping center. We expect 2005 to be the gleaning year of the "Tenth Five Year Plan," in which our objectives will be realized. In addition, we'll also prepare our working plan for the "Eleventh Five Year Plan."
Now, the second question. We got our CPI under control last year. It was stable. In 2004 the city's CPI rose 2.2 percent, to 102.2, while the retail price index (RPI) and the industrial product price index reached 100.9 and 103.6, respectively. We proposed a 3 percent rate-rise for the CPI this year, which has been approved by the Shanghai People's Congress already, and predict we can get our CPI-rise under control again, in spite of the complicated situation involving the rises in petroleum price and other manufacturing material prices, as well as the fluctuation in staple food and non-staple food prices. Assuming we can properly control CPI, we plan to control the price of public utilities as well, in order to keep the overall price levels stable and to lay the groundwork for further price reforms. During the process, we'll pay special attention to the strength and timing of the reforms.

7 Daily Economic News: How do you keep the development of those service sectors in the other cities of the Yangtze River Delta region coordinated with Shanghai's, aligning them with the modern service planning draft of our city?

Jiang Yingshi: Shanghai municipal government and Party commission have pledged to accelerate the city's developmental steps while, at the same time, serve the whole country actively. We've formed good relationships with the other parts of the Yangtze Delta region, especially the Jiangsu and Zhejiang provinces. We've organized  seminars to discuss the cooperation and development among the three regions. So far, the seminar has been held 4 times annually, since 2001, setting up 8 special topic groups to study issues on transportation, information sharing, travel, ecological treatment, natural gas network construction, city planning, human resources and credit systems. We held our first seminar in Zhejiang in 2001, and the second in Jiangsu in 2002. The third was held in Shanghai in 2003, and fourth was again in Zhejiang in 2004. On the whole, overall co-operations have been successful. The governments offer what companies need and the companies act upon what the governments propose. The national development and reform commission puts emphasis on two regional cooperation projects, the Yangtze River Delta region and the Beijing-Tianjin-Hebei Province region. Shanghai municipality, Jiangsu Province and Zhejiang Province are close neighbors, sharing nearly the same cultural heritages and ancestors. To strengthen cooperation, we should concentrate on our mutual advantages, that the three regions share the same interest in the development of the whole Yangtze River basin. We'll make even greater contributions towards the Yangtze River's construction into a "golden watercourse", and to that of the entire country.

8. Magazine on Taiwanese Businessmen in China: The local act's guidelines for a modern service industry intend to strengthen the economic cooperation between Hong Kong and Shanghai, while encouraging the city to learn more from those famous service companies there, so I would like to know how the municipality is preparing to increase intercommunication with local foreign invested service enterprises, especially those from Taiwan.   Moreover, with fewer and fewer limits on foreign investments, after China's entry into WTO, in which aspects of the city's construction will the government invite more foreign investment?

Jiang Shiying: Thanks to the focused concerns of the municipal government and the Shanghai CPC Committee, on the applied Closer Economic Partnership Arrangement, Shanghai and Hong Kong have already achieved a lot from their cooperation in the following eight sectors: The construction of air ports and sea ports, preparations for the Shanghai World Expo 2010, development of tourism, conferences and exhibitions, encouragement of investments in business and trade,  communications in education, public health and sports, the increase of financial services, and the further development of professionals.  In these aspects, we will continue to strengthen our cooperation with Hong Kong this year. 

Many of the 50 key urban projects planned for this year will invite foreign investment; especially in high-end technology industries like integrate circuit construction, in which some Taiwan businessmen will take part.  Shanghai highly recognizes participation of capital from Taiwan.  In fact, there are now many projects in the Pudong and Songjiang areas that have received investments from Taiwan.  The local government promotes these key urban projects in particular, each reaching certain feasible conditions in their early development.  Besides these 50, there are other good projects waiting to be upgraded to the key-list, once their feasibility study reports have been approved as certain by authority.  I have explained during the closed Shanghai People's Congress that the reason why some projects have not made it onto the (key) list is that the approving procedure takes time.

9. Real Estate Times: I have two questions.  The first one is, why haven't there  been any foreign funds or big international fund investment institutions invited into the local real estate industry in the past ten years?  The second is about some puzzling phenomenon in the local real estate market, like the continuously decreasing rent vs. the increasing price of houses, and the more houses provided by the developers in Shanghai each year vs. less local families who really possess the houses' property.  Can you tell us the real consumption-demand for houses in Shanghai?

Jiang Shiying: The local real estate industry is perfecting its operation system little by little, with multiple principals.  Let the experts answer your first question as to why there have been no foreign funds entering the local market.  Personally, I think the development of the local real estate market, comparatively speaking, has been a success, possessing a robust market-oriented system.

The growth of the local real estate market remains healthy.  It meets not only the demands raised by the city's economic development society and the opening-up reform, but that of local residents as well, with a view to ensuring that the majority of new properties developed are non-luxury residential units to be owner-occupied by Shanghai residents.  We will encourage the development of affordable housing for relocated residents, expand the supply of non-luxury properties to meet the residential needs of citizens, and strive to bring total supply and demand basically into balance by optimizing the structure of supply. Our regulation and control measures will be improved, so as to satisfy consumption-demand, regulate investment and curb speculation. We will actively develop the residential rental market, and explore new mechanisms to help low-income families rent apartments. We will further improve our housing-for-all program, keeping the rent of publicly owned residential properties low and expand coverage of the low-rent housing scheme.

10. Phoenix Satellite Television: A program was launched recently to promote the interchange of professionals between Shanghai and Hongkong. Has Shanghai made any progress in attracting HK talent? Does the city have any plan to hold job fairs in Hongkong to recruit its professionals? Secondly, according to a recent report by a Hangzhou-based newspaper, the maglev project between Shanghai and Hangzhou has received state approval. However, the rumor was later denied. Does the government plan to launch the project this year?

Jiang Yingshi: The talent exchange program is a joint effort between Shanghai and Hongkong to promote cooperation under CEPA (Closer Economic Partnership Arrangement) framework. Great achievements have been obtained in the field of talent interchange in the past two years. Shanghai has accomplished its goal of inviting a thousand HK professionals to work in the city ahead of schedule, with 1,278 HK professionals already recruited by the end of June, 2004. More efforts will be made and more cooperation will be encouraged in this field in the new year. More jobs will be created for HK talent. Our agencies that are established in Hongkong to recruit professionals will be made a standing body. The work to recruit HK professionals will be settled into a routine. The bilateral aggreement on how to acknowledge the professional qualifications of residents of the two cities will be fulfilled. Conditions will be created to make it easier for HK employment agencies to set up business in Shanghai.       
The fate of the maglev project is determined by the central government. Although we did some preliminary work in the past, the project is still waiting for approval from the central government. The state government will decide whether the Shanghai-Hangzhou maglev rail line will be built. Shanghai will follow its decision and play an active role.

11. News Times: I have three questions. First, will the local service industry create more jobs this year? Secondly, the People's Bank of China is reportedly planning to establish its headquarter in Shanghai. Could you confirm the news? Third, what's the difference between the cultural industry that Beijing plans to develop and the modern service industry that Shanghai is promoting? How does the city respond to Beijing's challenge?

Jiang Yingshi: The local service industry has become an important source of employment opportunities. I have great confidence in its capability to create more jobs this year. In answer to your last question, we are glad to see the development of Beijing's cultural industry. The modern service industry that Shanghai is promoting is abstract in concept. It deals with various aspects such as entertainment, leisure, training and medical care industries. We expect to see the development of the local modern service industry and hope the city to be a suitable place for people at home and abroad to live and work.

Jiao Yang: In answer to your second question, I think we should wait for a spokesman of People's Bank of China to confirm the report.