Hu Kaihong (host):

Ladies and gentlemen, good morning. Welcome to today’s policy briefing of the State Council. The executive meeting of the State Council on Sept 23 discussed relevant policies on speeding up the construction of recharging facilities for electric vehicles and city parking lots. To better inform you of this, I’m honored to have Lian Weiliang, vice-chairman of the National Development and Reform Commission, Lu Kehua, vice-minister of housing and urban-rural development, and Zheng Zhajie, vice-chairman of the National Energy Administration. Vice-Chairman Lian, please.

Lian Weiliang:

Ladies and gentlemen, friends from the press, good morning. I’m delighted to attend today’s policy briefing. The CPC Party Committee and the State Council have attached great importance to improving people’s living conditions, and the 106th executive meeting of the State Council specially discussed work related to speeding up the construction of city parking lots and promoting the building of charging posts for electric cars. Premier Li Keqiang stressed at the meeting the need to strengthen infrastructure construction and provide better public services, asking for policies to be implemented in this regard.

Today, I’m here together with Vice-Minister Lu and Vice-Chairman Zheng, to brief on you relevant policies. I’d like to introduce you to work related to the construction of parking lots.

The construction of parking lots is an important infrastructure project that helps to improve people’s living conditions and promote urbanization.

First, it is a necessary requirement to meet urban and rural residents’ increasing use of vehicles. Since 2005, car ownership in China has grown 15 percent annually. However, the construction of parking areas is far from meeting the fast-growing number of cars. It is estimated that in big Chinese cities, every car only has an average of 0.8 of a parking space, and the figure is 0.5 in small and middle-sized cities. However, in developed countries, every car has 1.3 parking spaces on average. China now is short more than 50 million parking spots.

Second, such efforts are necessary for promoting China’s new type of urbanization. Based on China’s population, every increased percentage point of the urbanization rate will reflect the migration of more than 13 million people into the cities. As cities become larger and their people grow, there will certainly be more and more parking needs.

Third, it is also an important measure to improve city traffic and people’s living conditions. The parking difficulties have caused many traffic violations, which worsen the traffic situation and affect people’s normal life.

Fourth, to speed up the construction of parking lots will bring more economic benefits. It is estimated that China needs to build about 30 million parking spots every year, and the cost for building one spot varies from 50,000 to 200,000 yuan. This means an investment of 3 trillion yuan. It will not only promote effective investment, but also help to improve the automobile market and expand reasonable car buying. Moreover, developing parking-related industries will help to boost the development of the service industry and create more jobs.

However, we should still stick to the following principles when speeding up the construction of parking areas.

First, policy implementation should consider the situation in different cities. For mega-cities and big cities, the authorities should pay attention to the role of public traffic when making policies concerning the supply of parking lots, and different standards and solutions should be applied to a city’s different areas based on their function and transportation convenience. For small and middle-sized cities, the authorities should fully consider their development and public transportation so as to plan the construction of parking spaces through forward-thinking.

Second, all cities should, first of all, formulate their special plans for parking space construction, and ensure that the plans conforms to the city’s overall planning.

Third, priority should be given to public transportation and “green travel” should be encouraged. Building more parking spaces doesn’t mean to meet all kinds of demands for greater numbers of cars. The construction of parking areas should be considered with the development of public transportation and new energy vehicles. Parking facilities, for buses and near subway and railway stations and transportation hubs, should be guaranteed. In the meanwhile, charging facilities should also be equipped to promote the use of electric vehicles.

Fourth, the market should play a decisive role in allocating resources during the construction of parking lots. Efforts should be made to explore various patterns of cooperation and attract the participation of private capital. The government should play a guiding role and offer support in terms of planning, land and financing.

Fifth, equal attention should be paid to construction work and management. The management of parking spots on roads should be further improved. The authorities should further regulate parking through punishing violations, to create a good environment for investment in the parking industry. Also, the Internet Plus should play a full role in effectively improving the utilization efficiency of parking resources.

As the executive meeting of the State Council has noted, the construction work should make clear that local governments are responsible for the construction, operation and management of parking lots.

Also, efforts should be done in terms of key aspects, that is, planning, land use, investment and returns.

First, all cities with divided districts, are required to make special plans for the construction of parking lots. They are responsible for determining basic data such as parking needs, and connect the parking plan with others, such as city overall planning and transportation plans. All cities with divided districts are required to complete the special plans on parking construction in the first half of next year.

Second, land use should be guaranteed. A certain percentage of land vacated in central urban areas should be used for the construction of parking facilities. The overground and underground space of public facilities should also be used to build parking facilities. Relevant departments should make sure that investors obtain the property rights of parking lots in accordance with regulations.

Third, investment mechanisms should be further improved. Multi-channel investment should be encouraged, with focus on the investment of private capital and the private-public partnership. Various financing forms such as corporate debt will be encouraged, and the financing institutions are encouraged to offer stronger credit support. The central government will also speed up support through special funds.

Fourth, efforts should be made to give full play to the role of price leverage, and narrow the range of government-guided pricing. The charges for newly built parking lots by private capital will be determined by the market. The charge standards of parking lots built through private-public partnership will be decided through agreement between the investors.

The State Council also stressed the implementation of the following policies.

First, to ease market access. Both enterprises and individuals could apply for investing in the construction of parking lots.

Second, to streamline approval procedures. Related departments in all cities should deepen the reform of administrative approval systems, transform the functions of government and streamline procedures concerning parking construction projects.

Third, the authorities should strengthen supervision over the management of public parking resources on roads, and ensure that a certain percentage of income will be used for the construction of parking lots. Strict supervision over parking services and fee charges should be carried out, and illegal activities such as unlicensed business should be cracked down on.

Fourth, efforts should be made to promote the development of the parking construction industry. Relevant equipment manufacturing enterprises should be encouraged to innovate, thus improving the percentage of major parking equipment made domestically.

As the prices for investment products are currently low, it is high time to build public products at a low cost. Therefore, the local governments in all cities should seriously implement the requirements of the executive meeting of the State Council and mobilize relevant parties to speed up the construction of parking lots and honestly solve the parking difficulties faced by the residents.

That’s all, thank you.

Hu Kaihong:

Thank you, Vice-Chairman Lian. Next, Vice-Minister Lu, please.

Lu Kehua:

Good afternoon, ladies and gentlemen.

People have become familiar with difficulties in parking cars recently, which brought them inconvenience and affected the city’s appearance and environment.

In 2010, the Ministry of Housing and Urban-Rural Development, the National Development and Reform Commission and the Ministry of Public Security jointly issued a guideline to address that problem. This year, our ministry released three regulations to plan, construct and manage public parking lots.

First, we figured out the demand for parking lots in cities according to population, land use and future development. For example, cities with a population under 500,000 should have parking lots 1.1 to 1.5 times of its car ownership and cities with a population over 500,000 should have parking lots 1.1 to 1.3 time its car ownership.

Second, we are providing more access to car parks by building private parking spots, public parking lots and by using road sides temporarily for parking.

Third, we combined urban planning with the construction of parking lots, not just simply building more parking lots in places that received the most complains.

In the construction sector, the core issue is to ensure the safety and reliability of parking facilities and to improve the use and efficiency of them.

In the management sector, we have issued a notice to clarify how will parking facilities be managed professionally and properly utilized.

Lu Kehua:

Additionally, in the construction of more recharging facilities for electric cars, we did two things to meet the requirements and planning of the State Council. One is planning and clarifying our requirements. For example, we demanded the speeding up of the construction of recharging facilities such as charging posts. All new residential buildings should install charging facilities in parking spots or leave necessary space for later installation. There should be no less than 10 percent of such facilities in large public buildings or public parking areas. The other is standardizing the charging facilities to avoid the problem of uncoordination by implementing a unified interface.

Thank you.

Zheng Zhajie:

Good morning.

As you know, the State Council executive meeting passed a guideline on Sept 23 to speed up the construction of stations for electric cars to recharge electricity or change batteries. By the end of last year, we had built 780 such stations and 31,000 charging posts across the country. But there were many problems during the construction of these facilities, such as a lack of a standard for these facilities.

The guideline requires that there should be enough smart and highly efficient charging facilities that meet the demand of more than five million electric cars by 2020. Construction of charging facilities for electric cars should be taken into consideration while planning estates. In principle, all parking lots for newly built apartment buildings should be equipped with charging facilities or should allow the installation of such facilities. No less than 10 percent of public parking lots should be equipped or allow the installation of such facilities and there must be a public charging station for every 2,000 electric cars. It also asks the authorities to open up the market and reduce red tape for the construction of such facilities.

In order to address major challenges facing the development of charging facilities for electric cars, the document came up with the following measures.

First, attract investment from private companies by allowing them reasonable profits while applying for financial support from the central government. Second, establish special funds to guarantee the construction. The central government will set aside funds for the project. The guideline encourages private companies to set up special funds and issue corporate bonds. It also encourages new ways to finance for projects of constructing charging facilities. Third, the authorities should simplify the procedure for approval of these projects and renovate the electricity grid to make sure the voltage of electricity for all neighborhoods is enough for electric cars to use charging facilities.

Thank you.

Economic Daily:

Is there a general plan for the National Development and Reform Commission to tackle the parking difficulty in cities?

Lian Weiliang:

The parking problem has many reasons, which requires a comprehensive solution. In general, it calls for the fulfillment of responsibility by the planners and managers of urban parking spaces, which are the municipal governments. Then, we also have to deal with “four critical issues” – planning, land, investment and charges (returns), as well as implement “four support measures”.

Here I would like to emphasize the following points:

First, stick to scientific planning to build a more advanced infrastructure. In the past, the lack of urban parking spaces had objective reasons, but urban planning and development in the future should be based on the fact that private cars are getting increasingly common in households. Therefore, the newly developed urban areas should have their parking facilities established according to preset standards. For example, cities with more than 500,000 vehicles should guarantee 1.1-1.3 parking spaces per car, while those with less than 500,000 should guarantee 1.1-1.5 per car. For old districts, parking problem should be dealt with by controlling both the demand and the supply sides while tapping the areas’ potential.

Second, prioritize public transportation and advocate “Green Travel”. Urban development should prioritize public transport, making it the first choice for traveling citizens. Accordingly, city governments should increase investments in public transport. Meanwhile, the government ought to make coordinated plans for the construction of parking spaces and urban public transportation, as well as the development of electric vehicles, to facilitate convenient transfer between the operation of private cars and public transport.

Third, adopt multiple measures to ensure a positive circle. Building new parking spaces will create conditions for governments to tackle on-road parking, which will produce effective demand for parking lots, which, combined with reasonable charging standards, will earn reasonable profits for parking spaces, which will attract more social capital. The solution of problems such as land use, planning and funding will also help secure investments. In this way, social capital is willing to invest in sufficient parking spaces and create a positive circle.

Currently, we have a vicious circle, which is deteriorating. Because of the lack of parking spaces, many vehicles occupy roads for parking with no effective solutions. Because of widespread low-cost on-road parking, there is no strong demand for car owners to purchase parking spaces. With no demand, nor reasonable return mechanism, nor funding approaches, combined with limits on land planning, social capital does not and cannot invest in this area. This has created a vicious circle. The State Council has researched building parking spaces and has taken a series of measures in hopes of solving the parking problem completely.

Bloomberg:

Authorities in the US are investigating whether the exhaust from certain Volkswagen vehicles pass car emission tests in the US. Are Chinese authorities concerned with such investigations and rulings? My second question is, it’s a new and global trend to intensify the oversight regarding the standards of fossil fuels. Will it benefit the electric car industry? In addition, will the introduction of some new clean energies facilitate the development of the auto industry?

Zheng Zhajie

We have long been paying attention to the prevention and control of air pollution, not just recently, as it is related to the development, structural adjustment, as well as people’s livelihood in China.

We have a very important indicator in this regard, the proportion of non-fossil fuels. It’s China’s commitment to the world to raise the ratio to 15 percent by 2020, and 20 percent by 2030. We are taking various measures to strive for the target.

I have to say that it is a big topic, with numerous problems to be dealt with. It’s a comprehensive problem that needs comprehensive measures, as Mr Lian said.

As part of the comprehensive measures, China is vigorously promoting electric cars, to tackle and minimize emission problems brought by the combustion of diesel and gas. And that is what is related to the topics we are discussing today.

China National Radio:

I have two questions. The first question is for Mr. Zheng. There is no unified charging standard as manufacturers make their own standards. For example, Tesla has its own charging system, while BYD uses another system. So from the perspective of manufacturing, how could we convince the manufacturers to unify the charging standard?

The second question goes to Mr. Lian. You have mentioned that parking lots are scarce resources. But we can see that some local governments are implementing a trial policy that requires people to own a parking space before they can buy a car. If so, that means the fewer parking lots the better to implement the policy. Does this go against the will to tackle parking difficulties? How do you comment on it?

Lian Weiliang:

I think we should see from three aspects:

First, the responsibility of solving the parking problem goes to the municipal governments, which, of course, make decisions based on thorough consideration and public opinion.

Second, infrastructure construction should be enhanced to meet the parking needs as much as possible. By carrying out special studies and implementing specific policies, the State Council aims to help local governments solve the problems of parking lot construction and development of electric vehicles as well as to satisfy consumers’ needs for cars.

Third, municipal governments can make new policies to encourage consumers to buy parking spaces. Having a parking space becomes a premise before you can purchase a car, which means it is also a part of consumption. So, government and individuals should both think about parking conditions before getting a car. For the government, it should create a better environment and conditions. For individual consumers, they should also cover part of the costs.

This means that special measures should be taken when the scale of a city and the number of cars reach a certain level.

Local governments should be allowed to explore making policies to encourage consumers to buy parking spaces.

Of course, a thorough discussion should be held before creating an idea that can encourage people to buy parking spaces as well as solve the parking problems.

But the most important thing, as we said today, is speeding up parking lot construction to meet consumer needs as much as possible.

Zheng Zhajie:

Your question is important and practical, which is in fact an issue concerning unified standards, and interconnection and interworking. It will have a big impact on the healthy development of the whole industry, to which the Opinion also attaches great importance.

We will start our work from two aspects. First is about the standards. We will release the revised draft of some key national standards, such as the charging connector and communication protocol, which have been passed by the Standardization Administration of the People’s Republic of China. After that, the existing charging facilities will be upgraded to make them unified nationwide. Meanwhile, we are formulating standards on emerging technologies, such as wireless charging. In addition, standards on operation services concerning measuring and charges for the charging infrastructure are being improved, as well as the system of traffic signs for those infrastructure along the roads.

Oh the other hand, we are making efforts in implementing and supervising, making sure these standards are put in place. We will set up an alliance of charging facilities for electric cars, aimed at fully mobilizing social resources. An information service platform will also be built, to integrate information resources between different enterprises and platforms offering charging services in different cities. These measures will speed up the construction of charging facilities.

As to some vehicle plants taking their own standards, such as the Tesla, our attitude is clear: All charging facilities constructed within China must strictly abide by our standards. As far as I know, Tesla is actively participating in the setting of new standards, and will make adjustment to their products according to the new standards. I’m sure the problem will be resolved very soon, thank you!

China News Service:

I have a question for Mr Lu. Some people believe that the parking problem is due to insufficient urban planning. What’s your comment on that view?

Lu Kehua:

It does make sense in certain respects, especially in the old residential communities and public buildings.

The lack of parking space among the old residential communities, which accounts for 1/6 nationwide according to our survey, is because formerly we missed factors such as the speed and scale of private car usage by Chinese families in our urban planning.

As to public buildings, we considered less the carrying capacity of traffic infrastructure, including parking lots, which has created an imbalance between the development rate and parking capacity.

As I mentioned earlier, we’ve made clear in the new urban planning the general scale of parking lots. For cities that have a population of more than 500,000, every car should have a range of 1.1 to 1.3 parking spaces, and for those with a population of less than 500,000, the range is 1.1 to 1.5. Then the total number will be sufficient. With construction of parking lots in public facilities that go with newly developed areas a major part of the plan, the overall results should be more satisfactory.

But I would like to stress one more point. To address the parking problem, overall planning with integrated thinking is key.

Currently, we’re isolating the problem, and in the future, we’re moving the focus to a combination of resolving and redirecting.

To resolve, I mean it’s for short term, we’re constructing more parking lots, and rationalize roadside parking.

In the long run, we should redirect and guide a new way of car use by emphasizing a new concept in car trips and car consumption.

Considering the large population, everyone is entitled to 100 square meters of urban construction land.

We’re considering an overall picture of traffic for both families that possess cars and those that don’t, and also of the development of industry, housing problem, as well as the ecology.

Lu Kehua:

It is not reasonable for citizens to travel mostly by car, and people’s incomes are not the decisive factor in choosing how they travel. It is not that cars are the choice of people with high incomes, while public transportation is the choice of low-income groups. We should choose proper transportation methods according to our destination and distance.

Most Chinese consumers prefer buying bigger private cars. Cars that are on the road are mostly sedans in China, but in France or Germany, they are mostly hatchbacks or micro cars. Different size cars need different size parking spaces. If car sizes could become smaller, a parking lot could hold more cars than before, and parking efficiency could increase one-third from before.

Private cars in China are mainly used for commuting, so its usage is high in our country. While in European countries and Japan, people use their private cars only on weekends or daily leisure. The frequent use of cars in China contributes to the tight parking space issue.

Many Chinese drivers choose private cars for short-distance traveling within five kilometers, within which public transportation might be the best choice. So if car use and people’s perceptions can change, the issue of tight parking spaces could be greatly relieved.

Lian Weiliang:

I want to expand on multi-channeled fund-raising. Aside from the task of constructing parking lots, financing is another outstanding problem that needs to be tackled. As part of the current investment and financing reform, great efforts will be made to expand cooperation between the government and private capital, namely, public-private partnership (PPP). The PPP model is very suitable for the construction of parking lots. But in addition to registered capital contributed by joint ventures established by the government and private companies, more money is needed from other financing channels. Therefore, seeking more channels to raise money is a very important part of the measures the government is considering, with great importance attached to encouraging companies to raise funds through debt issuance. The measures also include encouraging financial institutions to lend money. Debt issuance has a big market potential, and it can exist in many forms, such as project return debt and renewable bonds. The government has rolled out special parking lot bonds and reduced the threshold to issue such bonds. When companies issue bonds for their projects, credit must be ensured with a mortgage or guarantee. For example, already built parking lots can be used as security. The central government will also supplement companies’ registered capital by establishing special funds. We hope that the media’s publicity efforts can help city governments better understand and use these policies. And we also hope that more private companies are willing to invest in the construction of parking lots, which have returns with multiple government support.

Hu Kaihong:

That’s all for today’s policy briefing. Thank you all.