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January 14, 2012

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Mayor outlines array of measures to improve city

SHANGHAI will expand the switch to value-added tax for seven industries, raise the pensions of retired and low-income people, improve air-quality monitoring and increase investment for education in 2012, Mayor Han Zheng told the city's top legislative body yesterday.

The disparate measures will help Shanghai continue to drive innovation in its economic growth and improve people's daily lives, Han said during the ongoing Shanghai People's Congress.

"Though the external economic environment is not so good this year, its also the opportunity for Shanghai to develop itself, through the global economic transformation from developed regions to developing countries," Han said.

Shanghai will push the VAT switch in transportation and six other modern service industries such as information technology and culture. The switch covers 118,000 Shanghai-registered companies now.

The tax reform will help companies reduce taxes and improve their competitive position. The new VAT rate is 11 percent or 6 percent, much lower than the business tax rate of 13 percent or 17 percent.

Pressure on manufacturers

Traditional manufacturing companies face great pressure this year because of the global economic slowdown and increased cost of materials. Shanghai is thus shifting to develop its service industries, Han said.

Meanwhile, the city will also raise pensions for retired and low-income people. Shanghai's average monthly salary for the retired is 2,017 yuan (US$320), ranking the city No. 4 in the Chinese mainland behind Shenzhen, Guangzhou and Beijing. The city aims to lift pensions by 300 yuan a month by the end of this year, Han said.

Shanghai will also improve its environmental monitoring, Han said. This year, Shanghai will be among the first regions to adopt PM2.5 monitoring. The standard will spread to 113 key cities next year, all major cities in 2015 and nationwide in 2016.

PM2.5 refers to particles measuring smaller than 2.5 microns in diameter. They can pose major health risks as they are small enough to lodge deep in the lungs and even enter the bloodstream.

Currently, Chinese cities adopt the less sensitive PM10 standard in reporting air quality.

Shanghai started a lab for PM2.5 monitoring trials 10 years ago, and local stations had been collecting results systematically for years, according to the local environmental watchdog.

The mayor said that based on results from the past five years, about 50 to 60 percent of particulates reported under the looser PM10 monitoring standard turn out to be smaller than 2.5 microns in diameter. In other words, they are the more harmful PM2.5 particulates.

The stations also discovered the concentration of local PM2.5 particulates reached 0.044 to 0.05 milligrams per cubic meter of air, which is higher than the 0.03 standard expected to be passed by the state environmental watchdog soon, the mayor added.

The results from recent years indicate that once PM2.5 is adopted, the percentage of good air-quality days in Shanghai will drop by 13 to 15 percentage points from the current 90 to 93 percent, the mayor said.

Increased education spending is another major government goal this year, Han said. He specified that of the unprecedented 70 billion yuan annual government investment in education, 60 to 65 percent will be used to build more kindergartens and other schools as well as improving the quality of education. The rest will be spent on funding development of local colleges.

The mayor stressed the city's educational resources must be distributed evenly because of the sharp difference between suburban areas and downtown.

He urged local authorities to make the best use of funds and encouraged downtown district schools to open branches in the suburbs and transfer senior teachers to schools there.


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