Scalpers are controlling the market for automobile license plates in Shanghai, pushing auction prices to a record high for a seventh consecutive month and fueling the black market for plates.

A Nanjing native surnamed Zhang who now lives in the city said he paid 75,000 yuan ($11,952) for a Shanghai car plate in last Saturday's auction because he thinks prices will continue to rise in the future.

The Shanghai Commodity International Auction Co said the average price for a license plate was 75,332 yuan in January, up 6,000 yuan from December.

The increase on the black market, however, was even more, according to the Shanghai Morning Post, which reported the price of a secondhand license plate had rocketed from 72,000 yuan in December to 81,000 yuan in January.

Xu Yan, who has connections in the city's vehicle administration office, told China Daily that the soaring prices are the result of "scalpers taking control of the market".

"What's happening is people entrust their 4S shop to bid for a plate and the shops keep in touch with scalpers on auction days."

Meanwhile, the new policy introduced last July to rein in price speculation hasn't worked. The rule, which extended the period motorists must keep a license plate from one year to three years, was supposed to deter scalpers from reselling license plates. But the average price of a Shanghai license plate has increased `more than 28 percent since the policy was introduced.

Speaking on condition of anonymity, one scalper said there's a loophole in the policy, as it doesn't say anything about a time limit on transferring plates attached to secondhand cars.

"It's possible to attach a new plate to a secondhand car registered in my name, sell the car and plate and then take the plate off the car after the transaction," he said.

There's no effective policy to prevent scalpers from getting involved in the city's monthly auction except the regulation requesting anybody who won a plate to attach it to the car within three months, said Zhou Wenchao, a salesman at a Shanghai car dealership.

As an alternative to paying for an expensive Shanghai plate, drivers in the city have been buying Jiangsu and Zhejiang province license plates. However, the overwhelming demand because of the Spring Festival holiday next month means even these are scarce on the black market.

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