Dear friends from the Press:

Welcome to the regular press conference of the Ministry of Commerce. I am Yao Jian, spokesperson of the Ministry. I am very glad to see you here. Now I would like to brief you on the commercial development of China in January and February of 2011, and then I will take your questions.

Yao Jian: I. China’s consumption market operation

According to the statistics of National Bureau of Statistics (NBS), in January and February, the total retail sales of consumer goods amounted to 2.9 trillion yuan with a year-on-year increase of 15.8%, 2.1 percentage points lower than that in the same period of last year. The total retail sales of consumer goods increased by 11.4% in real terms, falling back by 4.1 percentage points. Since 2011, with the stimulation of policies on consumption promotion and pull of demand in the New Year and Spring Festival, domestic consumption market has kept the steady and moderately rapid growth, but the growth rate fell back. Here are the main features of the consumption market:

First, the growth gap between urban and rural consumption was reduced. Statistics from NBS showed that rural consumption increased 15.4% in January-February period while the urban consumption increased 15.9%. The growth gap stood at 0.5 percentage points, 2.4 percentage points lower than that of the same period of last year.

Second, sales of large circulation enterprises kept steady growth. Driven up by demand for purchases in the Spring Festival and medium and high-end commodities as well as promotion activities, sales of large circulation enterprises kept steady growth. In January-February period, sales volume of 3,000 major retailers monitored by MOFCOM increased 18% year on year, 2.2 percentage points higher than the average growth rate nationwide and 0.4 percentage points higher than that in the same period of last year.

Third, sales of gold, silver and jewelry kept thriving, but growth rate of sales of home appliances and automobiles shrank. Affected by traditional customs and inflation expectation as well as price hike of gold worldwide, sales of gold, silver and jewelry has increased markedly. In January-February period, sales of gold, silver and jewelry of 3,000 major retailers rose by 41.4% year on year, 18.2 percentage points higher than that in the same period of 2010. Sales value of home appliances and automobiles increased 7.5% and 9.7% respectively, and both growth rates fell back.

Fourth, prices of edible agricultural products like vegetables edged down, while prices of meat and sugar rose slightly. With the implementation of a series of measures on stabilizing prices, prices of major edible agricultural products like vegetables began to drop slightly in the beginning of February. Monitored by MOFCOM, from March 14 to 20, wholesale prices of 18 kinds of vegetables in 36 large and medium-sized cities and retail price of eggs dropped 3.4% and 3.0% respectively compared with that in the end of January. And prices of grain, meat and sugar continued its slight growth. In the same period, retail prices of small package of rice, flour, sugar and wholesale price of pork increased 5.2%, 3.4%, 6.6% and 8.2% respectively compared with that in the end of last December.

“To increase consumption” is a strategic mission in 2011 and the 12th Five-Year-Plan period. MOFCOM will earnestly implement relevant spirits in the Report on the Work of the Government 2010. Firstly, while sorting out existing consumption policies, MOFCOM will give priority to fostering growth points in the consumption of home appliances, automobiles, motorbikes, means of agricultural production and building materials in the rural areas. Secondly, MOFCOM will establish and improve the modern network of circulation, reduce the cost and loss of circulation, implement the Direct Farm Purchase Program if possible, and gradually improve the system of cold chain. Thirdly, MOFCOM will focus on the development of cultural, tourism and endowment consumption, foster and regulate the operation of new services like e-commerce and on-line purchase so as to form new growth points in consumption. Fourthly, MOFCOM will redouble its efforts in promoting food safety in circulation and create a convenient, safe and trustworthy consumption environment. (2011-03-22 10:21:23.0)

II. Foreign trade

According to the statistics by the Customs, China’s imports and exports in January and February registered US$495.83 billion, up 28.3% year on year. Among that, exports stood at US$247.47 billion, up 21.3%; and imports, US$248.36 billion, up 36.0%. In February, China’s imports and exports reached US$200.78 billion, up 10.6% year on year. Specifically, exports amounted to US$96.74 billion, up 2.4%; and imports, US$104.04 billion, up 19.4%; The trade deficit was US$7.31 billion, the second monthly trade deficit since last March. The main features of imports and exports in January and February are as follows:

(I) The growth rate of import and export suffered a sharp fall with a significant increase in price. Affected by Spring Festival, the import & export growth rate in February fell by 34.8 percentage points than that of the same period of 2010. Among that, export and import dropped by 43.3 and 25.6 percentage points respectively. Average export price increased by 11.6%, hitting a record high in price increase since March of 2008; average import price grew by 16.7%, setting a record high for the latest 8 months.

(II) Export to European and American markets witnessed a great drop while emerging markets enjoyed a steady increase. In February, export to European Union and America fell by 8.1% and 3.6% respectively, 10.5 and 6 percentage points lower than the total growth rate. However, export to emerging countries kept a rapid growth. In January and February, export to South Korea, India, Russia and Brazil increased by 30.6%, 46%, 37.2% and 34.6% respectively.

(III) Deficit in general trade surged while export in processing trade grew steadily. In February, export in general trade reached US$41.67 billion, down 4.8%; import, US$60.49 billion, up 25.1%; The deficit increased by 3.1 times to US$18.82 billion. Export in processing trade amounted to US$47.96 billion, up 9.6%, 7.2 percentage points higher than the overall growth rate; import, US$28.14 billion, up by 8%, 11.4 percentage points lower than the overall growth rate.

III. Attracting foreign direct investment

In the first two months of 2011, 3,399 new foreign-invested enterprises were approved in China, up 7.46% year on year. The actual input of FDI reached US$17.823 billion, up 27.09% year on year. In February, 1,156 new foreign-invested enterprises were approved to establish in China, down 10.9% year on year. The actual input of FDI reached US$7.8 billion, up 32.2% year on year. The main features are as follows:

Firstly, actualized FDI in service sector grew faster than that in manufacturing sector. In January and February, actualized FDI in manufacturing sector reached US$8.37 billion, up 24.3% year on year, 1.05 percentage points lower than that of the same period of the country’s total. Actualized FDI in service sector amounted to US$8.3 billion, up 34.5% year on year, accounting for 46.6% of the country’s total in the same period with 2.6 percentage points increase year on year. FDI in service sector mainly focused on distribution service, financial service, transport service, computer application service as well as production and supply of electricity, gas and water. In addition, actualized FDI in real estate reached US$4.15 billion, up 50.5% year on year.

Secondly, FDI inflow into the western regions was faster than that into eastern and central regions. In the first two months, the actualized FDI inflow in western regions reached US$1.22 billion with a 104.7% year-on-year increase, which is much higher than that of the same period of last year, equivalent to about 4 times of the country’s average since this January. The actual inflow of FDI in eastern and central regions were US$15.4 billion and US$1.2 billion, up 23.4% and 26.7% year on-year-respectively.

Thirdly, the investment from ten countries and regions in Asia to China saw an evident increase. In January and February, 2,694 enterprises were newly established in China by investors from ten countries and regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea), up 10.59% year-on-year. The total value of actual input of foreign investment rose by 31.33% to US$14.981 billion.

V. Outward investment and economic cooperation

Outward direct investment. According to the statistics of MOFCOM, in January-February 2011, domestic Chinese investors had directly invested in 680 overseas companies in 88 countries and regions, and their outward direct investments in non-financial sectors reached US$5.27 billion on a cumulative basis, up 13.1%. By the end of February 2011, China’s cumulative outward direct investment in non-financial sectors had reached US$264 billion.

Foreign contracted projects. In January-February 2011, the accomplished turnover of China’s foreign contracted projects reached US$9.88 billion, up by 5.5% year on year. The value of newly signed contracts reached US$17.76 billion, down 5% year on year.

Foreign labor service cooperation. From January to February, all kinds of labor sent abroad reached 56 thousand, 7 thousand more than that in the same period of last year, among which, labor sent abroad in foreign contracted projects was 34 thousand, and in labor cooperation projects was 22 thousand. By the end of February, the number of all kinds of labor abroad was 764 thousand, about 4 thousand less than that in the same period of last year.

As one of the major markets of China’s foreign contracted projects business, the unstable political situation in Western Asia and Northern Africa has brought some impact on our foreign contracted projects business. From January to February this year, the value of newly signed contracts in Africa was US$3.47 billion, down 53.2% year on year; the accomplished turnover was US$3.96 billion, up 3.8% year on year. Among these contracts, the value of new contracts of China in Libya decreased by 45.3% year on year, the realized turnover decreased by 13.9%; the value of new contracts in Algeria declined by 97.1%, with 10.7% less of turnover; the value of new contracts in the United Arab Emirates was down 54.2%, with 42.8% less of turnover. By the end of February, China’s labor abroad of all kinds was 28 thousand less than that of the same period last year.

Ⅵ. About expanding imports of mechanical and electrical products

In order to expand imports of advanced technologies and equipments, and strengthen the consistency and coordination of China’s import and industrial policies, accelerate restructuring of mechanical and electrical products, and give play the important role of imports in pushing forward China’s macroeconomic balance and structure adjustment, on March 4, MOFCOM and seven departments including the National Development and Reform Commission and Ministry of Finance jointly issued the Several opinions on actively promoting imports of mechanical and electrical products during the 12th Five-Year Plan period, which is a programmatic document.

China’s basic principles in expanding imports of machinery and electronic products during the 12th Five-Year Plan period are: stick to the combination of playing the role of market mechanism and policy guidance, stick to the combination of product introduction and innovation, and stick to the combination of promoting import and maintaining industrial safety. And the development goals are: gradually increase the proportion of imports in advanced technologies as well as key equipments and components, promote the proportion of imports of investment goods, consumer goods and intermediate goods to be rational, satisfy the demand for import in strategic emerging industries and key industries such as new generation of information technologies, energy conservation and environmental protection, new energy, biological and high-end equipment manufacturing, new materials and new-energy vehicles, and alleviate the rapid growth of trade surplus with some countries and regions.


The specific measures for promoting imports of machinery and electronic products during the 12th Five-Year Plan period include:

1. Vigorously promote the adjustment and optimization of import structure of mechanical and electronic products. Give strong support to the development of strategic emerging industries; give more support to products encouraged to import; perfect the current import promotion policies, and give more support to the import of advanced technologies, key equipment and components, and advanced technologies and equipment restricted by foreign countries to be exported; encourage the import by state-level R&D institutes; make timely adjustment to the Catalogue of Imported Commodities not Entitled for Tariff Exemption; and deliberate on establishment of financial leasing market and modern circulation market for import of advanced technologies and equipment.

2. Promote the balanced development of trade of mechanical and electrical products. Vigorously enhance trade facilitation of mechanical and electrical products; carry out trade promotion activities for mechanical and electrical products; and speed up the establishment of public service system.

3. Strengthen international consultation and cooperation, and urge relaxation of export control against China. Urge western developed countries to relax export control against China; perfect bilateral trade and economic cooperation mechanism in hi-tech field; and reinforce IPR protection.

4. Promote secondary innovation. Give more support to secondary innovation of technologies and equipment encouraged to import; strengthen the combination of technology and trade so as to introduce key technologies; and promote secondary innovation based on important and large-scale projects; encourage the importers of advanced technologies and equipment and manufacturers of equipment to join efforts to realize secondary innovation.

5. Give more support to import and secondary innovation by way of financial and fiscal means. Intensify financial support to import; and intensify fiscal support to secondary innovation.

6. Strengthen coordination, and perfect the management system and coordination mechanism for import of mechanical and electronic products. Establish import coordination management mechanism; perfect coordination mechanism of industrial organizations; perfect liaison system between key industries; and encourage the establishment of cooperation mechanism between banks and enterprises.

Ⅺ. About “Year of Export Quality Upgrading”

Since the reform and opening up 30 years ago, especially after China’s entry into WTO, China’s foreign trade has been developing rapidly, with trade scale and exports market expanding tremendously. At present, China has become the world's biggest exporter and the second biggest importer. And the products of “Made in China” have achieved a substantial leap in variety quality, design and packaging, and the overall qualities of export commodities are reliable and credible, and most of the products are welcomed broadly, while there still exist many difficulties and challenges in improving export quality.

Further improve export quality is a requirement for strengthening China’s international competitiveness and fundamental interests, as well as for accelerating the transformation of China’s foreign trade development mode, creating new advantages for international cooperation and competition, so as to push forward China’s transformation from a big trading country to a strong trading power. On March 4, eight ministries, including MOFCOM, MIIT and MOA, co-sponsored a video conference in Beijing on “Year of Export Quality Upgrading”, which was officially launched.

The activities of “Year of Export Quality Upgrading” mainly include: 1. Improve services. To strengthen, with multi-channels, the awareness and capacity of foreign trade companies, especially SMEs, in improving the quality and optimizing the structure of exports, enhancing export benefits and intellectual property rights, developing their private brand, and enhancing credibility management. 2. Strengthen publication. To introduce the measures that China has taken and the results achieved in improving export quality, so as to strengthen consumer confidence and enhance the image of China's exports and export companies in international markets. 3. Strengthen coordination. To create, step-by-step, an environment in which all provinces, departments, intermediaries and export companies to join efforts to promote export quality.

And in order to improve export quality, China will establish the platform to improve export quality, and continue to formulate the guide of quality and safety control of key exports and distribute them to export companies, provide training of foreign trade skill for rural enterprises and agricultural product processing enterprises, push forward self-discipline, conduct publication and education of laws in key export commodity distribution centers and markets, and organize qualified companies to participate in marketing campaigns at home and abroad. (2011-03-22 10:33:19.0)

CCTV: Excuse me, I’d like to ask one more question. The earthquake in Japan has caused great damage to Japan, as well as foreign companies and people in Japan suffered a lot, what about the current situation of the Chinese enterprises and laborers in Japan? China has provided timely aid after the earthquake, what kind of materials and what is the total amount, including food, gasoline and diesel, were provided besides daily necessities for disaster relief? Moreover, regarding the panic buying of grain and edible oil in Xinjiang and Fujian recently, will the Ministry of Commerce take any countermeasures? And the joint venture cosmetics enterprises, including detergent enterprises, are discussing raising prices collectively, does the Ministry of Commerce have any countermeasures or suggestions on it? (2011-03-22 10:48:15.0)

Yao Jian: After the earthquake and tsunami hit Japan, the Chinese side quickly activated emergency response mechanism, and conducted communication with the Japanese side, and Vice Minister of Commerce Fu Ziying had discussed the issue with the Japanese Ambassador to China in Beijing. As you can learn from the information released, the aid included the disaster relief goods worth of 30 million Yuan and 20,000 tons of fuel oil, including 10,000tons of gasoline and 10,000tons of diesel. The first batch of materials including coverlets, tents and emergency illumination devices were transported from Pudong airport on March 14, and had arrived on March 15 in the hard-hit Miyagi. And we are discussing with the Japanese side, and will deliver the follow-up materials according to the needs of the Japanese side as soon as possible. According to feedbacks of the Japanese side, mineral water, rubber gloves and shoes are in need. As some of the goods are not traditional aid materials, we are coordinating with the Japanese side. We will arrange the supply in time according to the list provided by the Japanese side, and will deliver them as soon as possible.

Secondly, the earthquake has caused certain impact on Chinese enterprises in Japan, as well as bilateral economic and trade cooperation. According to statistics by MOFCOM, at present, there are over 200 Chinese enterprises in Japan, and 22670 workers and trainees in quake-hit areas, of which 22661 have been in touch, and 9 still can’t be reached. The main task currently is to keep in close contact with the workers and trainees, and take them back home according to their needs, or ensure them stay safe in Japan. (2011-03-22 10:48:27.0)

Yao Jian: Besides the Chinese-funded enterprises, bilateral trade will be affected. The economic and trade relations between Japan and China are very close, as Japan is China’s third largest trading partner, the largest source of imports, and the fifth largest destination of exports. At present, Sino-Japan trade volume was nearly US$ 300 trillion, specifically US$ 297.8 trillion in 2010, accounting for 10% of China’s foreign trade. And from statistics of Japan, China is an important market for Japan, and is Japan's largest export market. As we all know, China has surpassed the United States to become Japan’s largest export market. The GDP of the northeastern areas affected by the earthquake accounts for 8% of the total GDP of Japan, at the same time, a number of electronic, automobile and petrochemical products are manufactured in this region, and account for a large proportion of trade with China. As a result, it will have an impact on bilateral trade over a short period.

According to the statistics, the top imports from Japan to China are integrated circuit, steel, auto parts & automobiles, with an annual import volume of US$ 14 billion, US$ 8.8 billion, US$ 8 billion and US$ 7.6 billion respectively, accounting for 22% of total imports from Japan, and will be affected to some degree. Besides trade cooperation, there are a large number of Japanese enterprises of processing trade in such places as Tianjin, Liaoning and Shandong, which need to import large quantities of raw materials, components and parts from Japan. Meanwhile, imports of plastic, aluminum and tin will be affected as well. In addition, garments, farm produce and electronic products, which are the top three categories of exports from China to Japan, will also be affected, as garments and farm produce are traditional exports to Japan, and electronic products are supplied to the electronic products manufacturing industry in Japan. However, we expect that the impact will be limited within a short period of time.

Your second question is about the panic buying of some commodities several days ago. There was a panic buying of salt in some areas on Wednesday and Thursday last week. MOFCOM had activated the market control mechanism for daily necessities in accordance with the arrangement of the State Council, and had worked together with the production and price regulatory authorities to ensure production, establish linkage of production and sales, and guarantee market supply. And according to MOFCOM statistics, there was an orderly and continuous supply of salt in large supermarkets from the morning of March 18, and salt sales had returned to normal state in the commercial facilities of most provinces and cities on March 19. Market supply of salt had been ensured under the organization and arrangement of the State Council. This event also reminds us that it is of great importance to strengthen market supervision and ensure the supply in case of emergency, at the same time, it is necessary to establish a scientific concept and correctly understand domestic economic situation. Generally speaking, with the 30 years of development since the reform and opening up, especially the rapid economic development in the 10 years after China’s entry into WTO, China has become a buyers' market. Agricultural sector has kept a stable output for many years, and its manufacturing capability is very strong, and its capacity of market control and stabilization in emergency has been enhanced. Generally speaking the policies of the Chinese government on macro-economic regulation and control are effective.

There are several factors ensuring smooth market operation for the coming period: First, as the Spring Festival has passed, the supply of daily necessities is sufficient and the prices are expected to remain stable with slight decrease. Second, China has taken effective measures to promote agricultural production. Specifically, it has implemented favorable policies in agricultural sector to respond to drought in the previous stage. It is expected that domestic supply and demand of grain and edible oil will be balanced and the price will remain stable. Third, as the weather becomes warmer, large quantities of open-air vegetables will be on the market, and meat, eggs and aquatic products will enter into peak season for production, and their supply will be sufficient. Accordingly, we expect that market price will drop continuously in the coming period. We believe that with the strengthening of China's capability for macro- economic control, especially for market supply in emergency, consumption of the residents will be carried out in a rational and reasonable way. MOFCOM will further improve emergency management mechanism, so as to ensure consumption demand of residents and maintain stability of market supply.

I would also like to inform you that MOFCOM has established an emergency regulation network including a backbone emergency control team composed by 500 large enterprises. 1600 manufacturers of key daily necessities have been selected to ensure production and supply in emergency. At the same time, over 300contingency commodity distribution centers and the contingency commodity release network that covers over 3,100 outlets have been established nationwide, which will play an important role for the supply and control of contingency products. (2011-03-22 10:57:57.0)

Century Weekly: I would like to ask you about trade deficit. You just mentioned that the Spring Festival was an important factor for February’s trade deficit, and Minister Chen Deming had said on last weekend at China Development Forum that there was a trade deficit in early March, what is the reason in your opinion? Someone says not only the Spring Festival, but the labor shortage may also be an important factor. In February, exports of coke and container showed a positive growth, while labor-intensive products such as textile, plastics, furniture and footwear saw a negative growth, with export growth rate in February declined. How will you comment on it? Moreover, according to MOFCOM, how long the deficit is expected to continue? Thank you. (2011-03-22 11:06:01.0)

Yao Jian: The US$ 7.3 billion of trade deficit in February was caused by several factors. First of all, import prices continued to increase. In February, import prices rose by about 16%, which was an important factor for the increase of import value. And the two-week Spring Festival should be an important factor for the declining of exports. Of course, we also noticed that the exports, especially labor-intensive exports, declined in several coastal provinces and municipalities except Guangdong Province in February. Not only the decreased demand in overseas markets, but also the rising costs of domestic labors and raw materials including cotton, also caused a decline in export competitiveness, to which we are paying close attention.

Generally, China has an adequate labor supply, and Chinese enterprises have maintained effective competitiveness in the global market. China will maintain a relatively stable export growth in 2011, and our policies are aiming at promoting balanced trade, which is a national development strategy. In 2011, China will further strengthen policies to promote exports, and the basic policy is to maintain a steady growth of exports based on the balance of imports and exports. This is the essential policy. Thank you. (2011-03-22 11:06:55.0)

Economic Information Daily: I have two questions. Firstly, with regard to the current complicated international situation with an increase of unpredictable incidents like in Libya and in Japan, do you think China’s import and export of this year may be affected by those incidents? Is it likely that the monthly trade deficit will be more frequent? Secondly, after “clenbuterol-tainted pork” fraud, whether MOFCOM has enacted new regulations or implemented more strict supervision on pig slaughtering activities? Thank you.

Yao Jian: As to China’s export, I would like to add some remarks although it has been mentioned earlier. The competitive advantages of exports for Chinese enterprises are embodied in medium grade products, accounting for 9%-10% of the world market. The increasing costs of some raw materials and labor force may exert some influence on our competitiveness. Therefore, we will further raise the quality and added value of export products, further enhance Chinese brands and reputation, and integrate more technology content into the products for export. Such an orientation of export transition shows that we attach more importance to the adjustment of export structure.

In terms of China’s trade surplus and deficit. China has witnessed trade surplus in several successive years, we will persist in promoting the balanced development of trade, expanding import within the overall policy framework.

Concerning the issue of pork products quality, i.e. so-called “graceful pig”. After “graceful pig” matter was exposed on March 15, the Food Safety Leading Group of the State Council had showed great concern to it and sent a central government taskforce to investigate and direct follow-up rectification in the place of event. MOFCOM had sent a taskforce immediate after the exposure of the event, and later dispatched some personnel concerned to join the central government taskforce. The safety problem of agricultural products is a salient challenge to the national economic development and the quality improvement. By international economic cooperation, we have been introducing international standards and attempting to improve the quality of Chinese products. Besides, agricultural products take a considerable proportion in Sino-Japanese trade. Through trade cooperation between both sides, the quality of agricultural products, especially edible agricultural products, in Shandong, Jiangsu and other major places for export has been improving. Therefore, we will continue to follow international norms and standards so as to improve the quality of domestic agricultural products.

Meanwhile, I’d like to mention here that MOFCOM launched a quality tracking system for pork and vegetables in 10 cities across the country last year. That system has played an important role in coping with the “graceful pig” incident, helping us find the origin meat source in Henan and Nanjing quickly. With a good start in the system construction last year, MOFCOM will select 10 more cities on top of current 10 pilot cities to further advance the system. The key to the program is establishing a reverse tracking system along the food chain from production farm to the whole distribution system including grocery stores and dining tables in 20 cities, namely tracing certain food back to their source. That program has already achieved a good beginning. For example, apart from Suzhou and Wuxi among the 10 cities in the pilot program, Jiangsu Province has developed its own quality tracking system in the prefectural-level cities. So far, the tracking system for pork has covered 168 designated mechanized slaughterhouses and 93 large wholesale markets in 10 cities across China, linking production, slaughtering and circulation sections. We will carry out the construction of quality tracking system for pork and vegetables in the ten newly designated cities with reference to international standards and norms. With our great efforts, we should solve such problems as food safety, quality safety and IPR protection raised during China's economic transformation as soon as possible. Relevant policies and administrative measures have been released in succession, and we believe that food safety in China will be improved through our hard work, and the tracking system will be perfected with scientific methods and means. Thank you.

CNR: Shuanghui scandal reminds many customers of Sanlu milk powder incident occurred three years ago and it seems that this is a part of a scandal. I could remember that clenbuterol-tainted luncheon meat of another brand had been exposed in 2009. After Shuanghui incident, whether MOFOM has carried out a supervision and inspection over other big brand names, such as Yurun and Chundu? What measures will be taken by MOFCOM to ensure food safety in ham sausages industry and rebuild consumers' confidence?

Yao Jian: Your question is very important as you mentioned how to learn by analogy to further perfect our system. As I have just mentioned, during the process of building the quality tracking system for pork and vegetables launched by MOFCOM to strengthen food safety, we, on one hand, will apply more foreign standards through international cooperation and at the same time implement a unified standard both in domestic and international markets. On the other hand, we will launch such a tracking system in 20 cities. Those programs will be pushed forward in good order under the guidance of Food Safety Leading Group of the State Council. Surely, the State Council has an overall leadership for food safety work which is systematically wide-ranged and complicated, covering several sections such as slaughtering pork processing, circulation as well as inspection and quarantine.

In the construction of pork quality tracking system, MOFCOM will follow the overall program made by Food Safety Leading Group of the State Council and strengthening cooperation with agricultural and sanitary and quarantine departments, so as to address the problem of pesticide residues in slaughtering and circulation sections. The enterprises referred just now are all large-scale food-processing enterprises. They should have more strict standards and borne more social responsibilities. Those are what they should do.

BTV: I have two questions. Firstly, the recent salt-rush has quickly retreated due to the timely response of the market emergency mechanism. Such quick response can be regarded as a reflection after experiencing several similar incidents in the past. Is it possible to transform the emergency responding mechanism into an early warning system in order to prevent rumors from spreading? Concerning my second question, with regard to salt-refund coming just in the wake of salt-buying panic, is it necessary to differentiate salt buyers in high price? Do it have any more considerate and specific measures to deal with salt-refund? Thank you.

Yao Jian: Your suggestion on the transition from emergency responding mechanism to early- warning system is very correct. In the construction of emergency framework, MOFCOM actually has given top priority to market surveillance and warning. We have designated monitoring sites in thousands of markets throughout the country in order to receive the latest information of weekly price changes. Salt-rush spread to nearly 30 provinces and cities, and in some cities salt sales volume in a single day reached 20 times of average sales. That indeed reflects the importance of improvement of warning system. However, we should understand that such incident may occur under extreme circumstances, which can be considered as an effective practice and test for emergency supply. The salt-rush will also stimulate us to perfect emergency supply system. In my view, early warning and emergency responding are closely connected. Specifically, early warning system can better reflect market changes and provide enough time for preparation of the emergency work. At the same time, emergency responding work can be regarded as a test for the supply network and emergency network in the whole market system. Those are two sides of one coin, which also show the significance to us.

During the past twenty or thirty years, marketization has developed rapidly in commercial sector. While there are still many state-owned enterprises in manufacturing sector, a large number of private enterprises operate in commercial sector for market

supply. The market share for foreign-invested enterprises and state-owned enterprises perhaps in the commercial sector is the least among the three industries. The question that we should take into consideration is how the government can play the leading role to implement emergency responding work in the process of marketization and privatization. Therefore, faced with marketization and market development, the government should intensify infrastructure construction in circulation section.

Regarding your second question. Owing to little information about it, I don’t know whether it is a common phenomenon or a special case. After this conference, I will recommend relevant personnel to answer your question.

Hong Kong Phoenix TV: Whether MOFCOM has calculated the losses suffered by Chinese-invested enterprises in Libya until now? In view of the current situation, have you considered to transfer Chinese investment to another country? Another question is about Japan. Since many people say that China may be a home front for Japan’s post-disaster reconstruction, what program will be proposed by MOFCOM for Japan’s reconstruction?

Yao Jian: Libya’s unstable political situation has caused great impact on Chinese-invested enterprises. According to the information we have, China has 50 large-scale contracted projects in Libya, with contract value of US$18.8 billion. Due to the unstable political situation, most staff of Chinese enterprises has been evacuated, which has brought substantial influence to the progress of projects and the operation of Chinese enterprises. With effective and orderly evacuation of staff, MOFCOM together with relevant chambers and enterprises made asset appraisal and loss appraisal of large-scale projects in Libya, and appropriately addressed relevant follow-up matters. Meanwhile, as Western Asia and Northern Africa region is an important destination for China’s overseas investment, China has established relatively perfect trade and economic cooperation mechanism and relevant work mechanism with the region. We will protect the interests of Chinese enterprises in Libya, Western Asia and Northern Africa region through those mechanisms. This has shown the importance of establishing an effective security system for Chinese enterprises doing overseas investment. China’s overseas investment last year reached US$59 billion. It is predicted that with the implementation of the 12th Five-Year Plan, and in the coming 5 to 10 years, China’s overseas investment may surpass its absorption of foreign investment. Therefore, how to establish an effective security system for overseas investment is especially urgent and important.

During the past phase, MOFCOM has paid efforts to and made some achievements in collecting security information, issuing early warning, and carrying out daily supervision, settlement of emergency, providing government’s follow-up assistance, etc. For instance, in terms of early warning, MOFCOM has provided timely overseas security information through government website. Concerning security supervision, MOFCOM will together with relevant chambers provide training about security emergency settlement for Chinese enterprises before they start overseas investment. Meanwhile, for the establishment of emergency system, domestic agencies have formed an effective and compartmentalized system for emergency settlement for overseas investment enterprises. We will reinforce security work concerning Chinese enterprises abroad, including adopting commercial measures such as insurance for projects and life insurance. The above is about the situation of projects in Libya.

With regard to disaster relief and reconstruction in Japan, the focus of coordination between Chinese Ministry of Commerce and Japanese Ministry of Economy, Trade and Industry is the emergency aid to Japan and the varieties of relief commodities. Another priority is to guarantee Sino-Japanese trade to be normal, especially the trade in key commodities. As I just mentioned, many Japanese enterprises in China need to import electronic products, steel products, and plastics in primary forms, and we should ensure the import of these products, as well as the normal export of garments, textile, agricultural products, and auto components to Japan. As for the reconstruction, I think China and Japan will conduct further consultation.

Beijing Business Today: Earlier, MOFCOM summoned Gome to talk about its subsidy fraud under policy of Trading in Old Home Appliances for the New Ones, and what is the progress now? I saw in the disseminated reference material that, China will enlarge domestic demand during the 12th Five-Year Plan. But with the termination of policies of Automobile to the Countryside and Trading in Old Automobile for the New Ones, and the termination of Trading in Old Home Appliances for the New Ones at the end of this year, what kind of new policies concerning expanding domestic demand will MOFCOM promulgate?

Yao Jian: On March 15, the subsidy fraud of Gome outlets in Tianjin was exposed. The scandal is a very bad misconduct. As is known to all, policies of “Home Appliances to the Countryside” and “Trading in Old Home Appliances for the New Ones” are effective measures for China to counter the financial crisis, boost domestic consumption and promote industrial development. The subsidy fraud has a negative influence on the implementation of the policies and public confidence to the policies. MOFCOM does have attached great importance to the matter and has taken several measures: 1. MOFCOM has summoned the principal of Gome headquarters, requiring Gome to make internal investigation, rectification and penalty; 2. MOFCOM, together with commerce authorities in Tianjin, have deprived the rights to conduct trade-in transactions at related GOME outlets in Tianjin. We will undertake further investigation and settlement to the case. We can say, since its implementation, the policy of “Trading in Old Home Appliances for the New Ones” has played an important role in assisting the industrial development. The sales volume under the policy has exceeded 40 million sets with a high recycling rate. What’s more important is that the implementation of the policy has guided the sustainable development of China’s economy. 80% of the old home appliance will be dismantled and undergone harmless treatment by certain enterprises, which is of significant importance to the environmental protection and the development of recycling economy in China.

As to the issue you mentioned about further implementation of policies and measures on expanding consumption. When addressing the crisis, China issued a series of specific industrial policies to expand consumption. With the steady and positive recovery of the economy, the orientation of economic policy has transferred from fighting against the crisis to normal macro-control. Policies to boost consumption will be implemented within overall macro-economic framework. First, consumption stimulation will become the main drive for economic growth; second, to promote consumption is not only a matter of circulation, but also a matter concerning the rise of income, of social security system, and upgrading of quality and safety of products, through which consumer confidence will be enhanced. We believe that consumption safety and income increase are the basis for expanding consumption. As for MOFCOM, we will redouble our efforts in improving circulation system especially during the 12th Five-Year Plan period. We will reinforce the infrastructure of circulation and the construction of cold chain for food and vegetables circulation, and further construct platforms to expand consumption. (2011-03-22 11:40:58.0)

International Business Daily: I have two questions: first, the central bank raised the deposit reserve rate several days ago, and whether this series of tight credit policy will have some influences on the "going global" of Chinese enterprises? Will MOFCOM take corresponding measures to help enterprises solve the problem? Second, I’d like to ask you to brief us the current situations of China’s overseas economic and trade cooperation zones, and whether the social unrest in Western Asia and Northern Africa will influence these zones?

Yao Jian: Let me briefly answer your question about Chinese overseas investment. The credit policy is a component of the macro-regulation policy the central government promulgated according to this year’s economic situations, and MOFCOM carries out its work under national macro-regulation polices, no matter in domestic or overseas markets. As to the changes of overseas market situations, especially the changes of political situations, they will have impact on “going global” of China’s enterprises. However, we think Chinese enterprises “going global” will make further progress in a rather long period, thanks to the continuous increase of competitiveness of Chinese enterprises, the cost rise of domestic production factors, and further transformation of China’s economic development pattern toward environmental protection and environmental friendliness.

TV Tokyo: I wonder what consequences Japan earthquake will bring to the Chinese economy and what specific influences on China’s import of advanced electronic products and components, semiconductor chips from Japan. Does China have any countermeasures for this? Would China consider importing from other countries?

Yao Jian: The earthquake in the northeast of Japan does have some influences on Sino-Japanese economic and trade cooperation, for they have such close economic and trade relations. Japan is the largest import market for China, with a share of 12.6% of China’s total import. Meanwhile, China is a cluster for Japan’s overseas investment and industrial relocation. A great many of Japan-funded enterprises are undertaking manufacturing、trade and investment in China, so the earthquake will affect trade and investment of both China and Japan. According to our preliminary understanding of the situation, our work focus is to communicate and cooperate with Japanese Ministry of Economy, Trade and Industry to ensure the smooth transportation of the relief supplies. The analysis on industrial influences is not comprehensive yet. On one hand, the Japan-funded enterprises operating in China need to import some components and spare parts from their motherland, therefore their production activities will be affected. Influences have already shown in Tianjin, Dalian and Jiangsu province. On the other hand, since China imports products such as integrated circuits, steel products and auto components from Japan, related production and trade activities will also be affected. As to the solutions, first, we should rely on the rapid recovery of the Japan’s economy, because the main sources of the industrial chain is in Japan; second, China has quite a lot of inventory of the above mentioned commodities, which is sufficient to ensure normal production for the time being; third, those Japan-funded enterprises could find alternative manufacturers in China. We hope that Japan’s economy can recover soon and bring Sino-Japan economic relations back on track as soon as possible.

Economic Daily and China Economic Net: On the China Development Forum 2011 on March 20th, the Commerce Minister Chen Deming expressed that China will solve the problem that some international luxuries are more expensive in China than in foreign countries, through various measures, such as promoting competition, improving logistics system, transforming and innovating retail modes, and relieving burdens of retailers. Here I would like to ask how the Ministry of Commerce will implement these measures. Thank you.

Yao Jian: It is safe to say that, it is normal the same product may have different prices in different markets, even if the same enterprise has different pricing strategies for different markets. From our perspective, this issue is prominent recently, reflected mainly in high-end brands, yet not obvious in the general consumer goods. This is our first basic judgment.

Such price difference is unfair for China although it is a normal phenomenon in the international market. First of all, as we know, Chinese tourists always purchase a lot from abroad. It is said that per capita overseas purchase is about US$1,000 per trip and there is a large number of Chinese tourists. However, such a huge amount of purchase is not included in China’s customs statistics, which means that China misses tens of billions of dollars in its import statistics, and thus it affects the judgment on trade balance. Secondly, the price difference is unfair and unreasonable for Chinese consumers. Although statistics made by MOFCOM could not reflect the exact situation, they could show us a signal at least. Prices of 20 brands of high-grade commodities covering watches, luggage, garment, alcohol drink and electronic products in Mainland are about 45% higher than that in Hong Kong, 51% higher than that in the U.S., and 72% higher than that in France. This phenomenon has aroused the attention of the Chinese government. As to the reasons, officials from MOFCOM have made elaborations in high-level forums and other circumstances. In my opinion, there are as expected: firstly, differences among distribution and pricing systems of multinational enterprises; secondly, limited number of domestic brand names and ensuing less choices for consumers; thirdly, China’s high composite tariff rates on imports commodities of brand names, like customs tariff and consumption tax. It needs a comprehensive policy to solve the above-mentioned problems. We should create a better distribution environment for foreign-invested enterprises, especially their operating enterprises. Meanwhile, foreign invested enterprises owning famous brands should offer a fair and reasonable price level to the Chinese market. In addition, MOFCOM will, together with relevant departments, further perfect the domestic policy system. With the upgrade of domestic consumption, those commodities that used to be luxurious have become normal for the consumers of middle class. So the formulation of policies is encountered with increasing challenges. All of these problems are among our policy concerns.

On the other hand, large amounts of “China-made” products are shipped to overseas by means of processing trade, such as electronic products, high-end apparels. In accordance with policies on processing trade, products processed in China should be exported only, and there will be taxation problems if they are sold in China. Now, MOFCOM, General Customs and tax departments are improving China’s policies on domestic sales of products under processing trade. This problem could be solved by domestic market access of processed products, perfection of distribution system and rationalization of taxation system. Of course, it also needs multinational enterprises and retailers to adopt reasonable pricing and sales strategies for the Chinese market. Thank you. (2011-03-22 12:05:54.0)

China News Agency: I noticed that in the first two months of 2011, the investment in China has increased markedly from Asian 10 countries, many of which are members of ASEAN. Could you analyze the reason for these ASEAN members increasing their investment in China recently? The second question, what new measures will be taken by the Ministry of Commerce in 2011 in order to promote the bilateral trade between China and ASEAN and the two-way investment? Thank you. (2011-03-22 12:18:38.0)

Yao Jian: China-ASEAN FTA has entered into force as of January 1, 2010. It covers not only trade in goods but also trade in services and investment. With the implementation of the FTA, the entire Chinese market was open to ASEAN. Specifically, Guangxi and Yunnan as well as their neighboring regions held plenty of cooperation with ASEAN, and their local governments and enterprises actively engaged in promoting bilateral economic cooperation by taking advantage of the FTA policies. All of these activities played an important role in promoting trade and investment. At present, Japan is China’s third largest trading partner. However, China’s export to ASEAN has increased so remarkably that it surpasses its export to Japan, from which we can see the significance of the strategy of FTA to the economic cooperation between two regions. We are thus actively pushing forward the study of China-Japan and China-ROK FTAs with the hope of effectively boosting trade between China and Japan, China and ROK on the basis of China-ASEAN FTA. (2011-03-22 12:19:02.0)

People’s Daily: I have two questions. Firstly, you have mentioned the number of Chinese trainees in Japan. Could you elaborate on the efforts taken by China to ensure their rights and benefits? Secondly, the national 12th Five-Year Plan has been launched, how is the progress of the 12th Five-Year Plan in the sector of commerce? And how do you think of “seizing the new positioning in the global economic division” proposed in the 12th Five-Year Plan? Thank you. (2011-03-22 12:25:47.0)

Yao Jian: I have given a brief about Japan. Here, I’d like to talk more about Chinese trainees in Japan. The number of Chinese trainees in the ten regions worst-hit by quake totaled 22,670. We took active measures to keep contact with those departments and relevant provincial governments that dispatched them to Japan. Up to now, there are still 9 trainees with whom we are unable to contact. And we are orderly arranging the rest to come back to China or to settle down in the proper places in Japan. It should be mentioned that dispatch of trainee is a special way and carrier for Sino-Japanese economic cooperation, and plays an important role in effectively covering the labor shortage in Japan and improving the working skills and ability of Chinese trainees. The Chinese government is greatly concerned about the trainees in Japan. They had shown calmness、mutual care and the spirit of cooperation after the earthquake and ensuing tsunami hit Japan. Currently, we are making great efforts in safeguarding their rights and interests. We are helping them come back home in accordance with their wishes.

Secondly, relevant institutions including China International Contractors Association and Sino-Japan Trainee Cooperation Organization of China have done relevant jobs, studied related laws, regulations, policies and contract articles, and actively made efforts in addressing problems left over from the earthquake for trainees. Meanwhile, MOFCOM will, together with China International Contractors Association and Sino-Japan Trainee Cooperation Organization of China, dispatch working groups to quake-hit areas to comfort Chinese trainees, timely solve their reasonable appeals and safeguard their rights. Trainees are a very special and important group apart from trade and investment in China’s cooperation with Japan. We will properly handle the evacuation of these over 22,000 trainees and protect their rights.

During the CPPCC & NPC Sessions 2011, the outline of the 12th Five-Year Plan on National Economic and Social Development was approved. MOFCOM is carrying on its work in line with relevant requirements. As for how to expand domestic demand, we have made elaborations in the domestic market plan. MOFCOM has been formulating the 12th Five-Year Development plan of Internal Trade, which has been listed as a special program at state-level. Its objective is to double the total retail sales of consumer goods, total sales of means of production, business of wholesale, retail, accommodation and catering in 2015 compared with that in the end of 11th Five-Year Plan period. Besides, MOFCOM will further take advantage of domestic market to create jobs. During the implementation of the 12th Five-Year Plan, the Chinese Government will take the development of services as an important indicator and MOFCOM will further improve the proportion of domestic consumption, trade and production circulation in the whole sector of services and their business scale. Moreover, MOFCOM will take some measures to promote job creation in domestic trade. Our objective is to create 30 million new jobs during the period of the 12th Five-Year Plan and make the total employment exceed 100 million in domestic trade. Ten aspects will be enhanced in the development of domestic trade, including further transforming the pattern of domestic trade development, economic restructuring, improving the development of safe and green consumption. That is the basic idea of the promotion of domestic trade in the 12th Five-Year-Plan period.

In addition, MOFCOM proposed other 11 special programs aiming at outward investment, development of services trade, development of border cooperation zones and special economic zones, opening-up and development of border regions. All together, there are 12 specific supplementary plans for the overall development of commerce. Here, I would like to point out that we will draft these programs in a scientific way as we will seek suggestions and opinions from experts and scholars from all walks of life as well as commercial departments nationwide. Thank you. (2011-03-22 12:25:56.0)

Bloomberg: The Department of Commerce of the U.S. stated lately that they were not optimistic about further market access in China, what’s your comment? (2011-03-22 12:26:31.0)

Yao Jian: The year 2011 is the 10th anniversary of China’s entry into the WTO. In the past decade, China’s economic development, as well as people’s livelihood have been improved dramatically, which are the achievements brought about by China’s reforms and opening-up. Since China’s accession into the WTO, we have been adhering to the principle of further opening-up. And in the future, we will persist in the guideline of opening domestic market wider to the rest of the world. Specifically, we will further improve China’s legal system on opening-up, grant equal treatment to foreign and domestic enterprises. With regard to WTO rules, we have participated in many activities of rules-making and dispute settlement. Looking ahead, we will continuously perfect our reform and opening-up region in this process. Thank you. Finally, thanks a lot to attend the press conference today. (2011-03-22 12:26:41.0)

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