Proposal to increase Beijing subway fare

A majority of those who attended a meeting which discussed adjustments to transportation fares in Beijing Tuesday supported a proposal to raise subway fees to 3 yuan ($0.49) for trips within 6 kilometers and bus fees to 2 yuan within 10 kilometers.

At the hearing held by the Beijing Municipal Commission of Development and Reform, 25 people, including government officials, transportation experts and ordinary residents, were given two proposals and 23 of them chose a proposal that could benefit long-distance commuters.

The first plan suggested 2 yuan for subway trips within 3 kilometers and 1 yuan for bus trips within 5 kilometers without discounts for adult transportation smart cards.

The second suggested 3 yuan for subway trips within 6 kilometers and 2 yuan for bus trips within 10 kilometers, suggesting a 50 percent discount for adult smart cards. This one was favored by the majority as the long-distance commuters would pay less under the second plan.

All the participants, including the 10 ordinary residents who attended the government hearing for the first time, said that a fare hike was necessary.

The whole hearing process was broadcast live on the website of the commission. The hearing did not settle on any proposals and the commission will compile the opinions voiced at the hearing and submit to related departments for further decision making.

Beijing's 2-yuan subway fare has remained unchanged for seven years and is the lowest in the country, the commission's report said.

Chen Yanyan, a transportation expert from the Beijing University of Technology, said that the low price resulted in excessive consumption and a waste of resources.

Chen suggested that the government raise the minimum wage for low income people as their lives will be affected after the transportation fares are increased.

The government has been heavily subsidizing the public transport system.

The municipal government provided a total of 95.8 billion yuan for the public transportation system from 2007 to 2013, and the subsidy has increased by 19 percent annually in the past seven years. Whether or not this public expenditure is fair or sustainable has been a source of contention, according to a report published on the commission's website.

Despite the fare hikes, the Beijing municipal government will still finance 50 percent of subway operation costs and 62 percent of bus operation costs, the Xinhua News Agency reported.

Before Beijing's transportation prices being changed, the city's sensitive housing market was been affected by the news.

Housing rental prices at suburban districts including Daxing and Tongzhou dropped around 8 to 10 percent in the first 19 days in October, while the overall housing rental prices citywide dropped 4 percent, according to chinanews.com.

Zhang Dawei, the chief market analyst at Beijing-based Zhongyuan Real Estate, told the Global Times that the rental price drop in suburban districts was partially caused by the news, and the rental market will witness another price drop after the price hike.

"The transportation cost will force tenants to choose places closer to the downtown area," Zhang said. In the long run, the price drop in the property rental market will transfer to the purchasing market as property investors will also consider transportation costs for their potential tenants, Zhang said.