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November 25, 2011

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Car plate sales raise billions for Shanghai

SALES of private car plates in Shanghai are raising billions for the city.

The Shanghai Finance Bureau said fiscal income last year from plate auctions hit 4.15 billion yuan (US$652.7 million), compared to 2009's 2.59 billion.

The bureau's report showed the city government last year spent 2.4 billion yuan from the accumulated income from plate auctions on supporting public transport.

It was used to subsidize transit bus companies's purchases of greener buses, cover losses incurred by offering free rides to senior citizens and funding discount programs to encourage more people to take public transport.

The total spent on such measures in 2009 was 3.04 billion yuan.

The report did not explain the variance but breakdowns showed the subsidies for discounted mass transit programs and free rides for seniors were lower last year than in 2009. But the cost to support companies buying greener buses increased, reflecting the government's determination to introduce more lower-emission buses on local streets.

The report also disclosed that there was still 3.59 billion yuan in the plate auctions account at the end of last year.

Despite calls from some city residents, Shanghai government officials have repeatedly said there are no plans to drop the practice of auctioning plates. The auctions, which began in 1994, were still important to help curb road congestion and limit the rise in the number of private vehicles in the city, officials said.

Public opinion seems to be split. Residents planning to buy a car are opposed to plate auctions, while supporters of the practice say that without the auctions traffic conditions in the city would be much worse.

The city government pledged to spend the income from plate auctions on improving the mass transit services, including building new Metro lines.

Car plate prices dropped for the first time this year at this month's auction, closing at an average 47,635 yuan, down 6,373 yuan from October, auction organizer Shanghai Commodity International Co said.

But analysts say the rising trend would continue in the long term. In August, the plate price reached 52,000 yuan, the highest in almost four years and equivalent to the cost of buying a small car.

The city's total fiscal income in the first nine months of this year reached about 281 billion yuan, an increase of 25 percent from a year earlier, the bureau said.


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