From News, page 5, The Economic Observer issue no. 335-336, October 1-8, 2007
Original article in Chinese:
http://www.eeo.com.cn/eobserve/eeo/jjgcb/2007/10/08/84420.html

On October 7th, as commuters eagerly gathered to ride the first train of the new number five subway line, they enjoyed another public transportation treat: subway fares slashed to two yuan and the introduction of unlimited transfers. The drop comes after eighty percent of citizen representatives ratified a proposal to implement the flat fare at a hearing on subway pricing policy on September 26th and Beijing's official approval shortly thereafter. The so-called "Beijing Model", which includes the reduction of the bus ticket prices at the end of last year, is dedicated to traffic relief. But supporting it is a massive financial expenditure from the government on the order of one billion yuan.

The Lowest Subway Fare

At the hearing on rail traffic ticket pricing on Sept. 26^th morning, 25 representatives from different industries brought forward their own opinions on the two pricing systems proposed by department concerned, one being to implement a flat fare of two yuan, the other to adopt a flexible pricing scheme ranging from two yuan to four yuan according to the distance traveled. The 19 representatives approved the first proposal, and 6 approved the second.

The current average cash fare for taking the four present lines is 3.25 yuan per person per trip. If a flat fare is to be adopted, approximately 83 percent of passengers will save 1.3 yuan per per trip.

Chai Xiaozhong, deputy director of the Beijing Municipal Development and Reform Commission, says that the solution for Beijing's traffic congestion is not above ground but below, and passengers should be attracted there by lower fares.

The Beijing Model

Li Wen, a clerk at Beijing's IT district Zhongguancun, clearly recalls his excitement when finding out that it only took him 4 jiao (0.4 yuan) to take a bus at the very beginning of the year. He is just one of the millions of beneficiaries of the "Beijing Model".