Shanghai will not cancel its monthly license-plate auction before next year's World Expo but is considering granting discounts on the plates of low-emission vehicles.

The Shanghai Development and Reform Commission told a Shanghai People's Congress deputy who was calling for the cancellation of the plate auction system that quota controls would be necessary until a mature and developed road network took shape in Shanghai.

Shanghai has a wide range of Metro, road, tunnel and other urban infrastructure face-lift projects under way in preparation for the 2010 World Expo.

With most of the projects in busy downtown areas, urban traffic is already under great pressure.

It said the government would continue to restrict the number of private cars while making big efforts to improve the public bus system.

In response to SPC deputy Jiang Jianhua's proposal submitted in January, the commission said local departments were discussing a scheme to provide discounts on plates for small-engine vehicles. The policy hopes to achieve a balance between reducing the cost of owning a private car and boosting sales of more environmentally friendly cars.

But the commission did not say whether the plate auction would vanish after World Expo, by which time the city's public transport and urban traffic systems are expected to be much more efficient.

Shanghai's plate auction system has long been controversial. While some people say the policy is unfair because there's no such restriction in other cities in China, others complain it is a weak tool, given the rapid increase in those buying cheap non-local plates.

The local government recently described the plate auction as a "transitional measure."

Shanghai Vice Mayor Tang Dengjie said last month that local authorities would increase the number of car plates for auction by 30 percent this year, compared to 2008's 84,500 plates sold, to encourage spending on vehicles.

Since January, the monthly car plate quota has been on the rise, ranging between 5,200 and 6,500 units. April's average bidding price was 28,724 yuan (US$4,194), up by nearly 1,200 yuan from March.

(Shanghai Daily May 12, 2009)