Dear friends from the Press,

Welcome to the regular press conference of the Ministry of Commerce. I am Shen Danyang, spokesman of the Ministry. I am very glad to meet you all again. First I would like to brief you on the commercial performance of China from January to August, and then I will take your questions.

I. China’s domestic market operation

According to the statistics of National Bureau of Statistics (NBS), from January to September, the total retail sales value of consumer goods surpassed 13 trillion yuan (amounted to 13.0811 trillion yuan), up by 17.0% year on year. The real growth was 11.3% after adjusting for price factor, 0.2 percentage point higher than that of the first half of this year. In September, the total retail sales value of consumer goods was increased by 17.7% than that of the same period. The real growth was 11.0% after adjusting for price factor, up by 1.35%.

Here are the main features of consumption market in the first three quarters:

Sales business of key monitored enterprises has been increasing steadily. In the first three quarters, sales value of 3,000 major retailers monitored by MOFCOM rose by 16.8%, dropped by 1.0 percentage points than that of the same period of last year. Among that, sales value in September was increased by 15.3%, up by 0.6 percentage point than that of August. From the trend of marketing, the sales volume of supermarkets and specialty stores in September dropped by 0.1 and 1.2 percentage points than that of August respectively.

The growth sales of foodstuffs and daily commodities increased rapidly. From the statistics of thousands of major retailers monitored by MOFCOM, the sales value of foodstuffs, clothing, shoes and caps were 0.5, 6.1 and 6.8 percentage points higher than that of August respectively. Affected by the soon-to-expire policies of home-appliance to the countryside and home-appliance old for new replacement, demand for home appliances began to increase. Sales value of home appliance in September was 0.3 percentage point higher than that of August, reversing the declining growth rate for two consecutive months.

Growth of prices of gold, silver and jewelry and automobiles slowed down. With the dropping price of gold internationally, sales value of gold, silver and jewelry slowed down. In September, sales value of thousands of key gold, silver and jewelry retailers increased by 32.4%, 7.1 percentage points down by that of August. Since the beginning of this year, automobile market remained low in growth. In September, sales value of thousands of key automobile retailers increased by 2.1%, 1.5 percentage points dropped by that of August. The sales value had been less than 5% for the last four consecutive months.

Prices for parts of edible agricultural products maintained steadily with a dropping trend. According to MOFCOM’s monitoring, prices for grain and cooking oil were still increasing. The retail prices of small-packaged rice and flour, soybean oil, peanut oil and rapeseed oil increase by 1.2%, 0.6%, 1.4% 1.9% and 1.4% respectively compared with that of the previous month. Seasonal factors drive the demand for vegetables and the average wholesale prices of 18 varieties of vegetables up by 13.2%, 17.1% lower than that of the same period of last year. Recently, the wholesale prices of pork, egg and vegetables maintained steadily with a dropping trend. Last week (from October 10 to 16), the wholesale price of pork dropped 1.9% than compared with the middle of September. The whole sale price of egg dropped 0.9% than that of late September, while of 18 vegetables dropped by 5% than that of last week.

II. Foreign Trade

According to the statistics by the Customs, China’s imports and exports from January to September registered US$2677.44billion with a year on year increase of 24.6%. Among that, exports amounted to US$1.39227 trillion, up by 22.7% year on year; and imports was US$1.28517 trillion, up by 26.7%. In September, China’s imports and exports totaled US$ 324.83 billion, increased by 18.9%. Among that, exports amounted to US$169.67 billion and imports were US$ 155.16 billion.

The main characteristics of China’s foreign trade from January to September are as follows:

Import growth rate was still higher than export growth rate. In September, export and import were increased by 17.1% and 20.9%, down 8.0 and 3.2 percentage points than that of the same period of last year. While import growth rate was still 3.8 percentage points higher than export growth rate. From January to September, the growth rate of both export and import were down by 11.3% and 15.7% respectively. Import growth rate was 4 percentage points higher than the export one.

Growth rate of private enterprises was in the leading position. From January to September, export value of foreign invested enterprises was US$1.3689 trillion, up by 18.4%, and accounted for 51.1% of total exports .Import value of SOEs was US$569.14, rose by 23.8%. Import value of private enterprises was US$739.39 billion, up by 38.7%. The growth rate was 20.3 and 14.7 percentage points higher than foreign invested enterprises and SOEs respectively.

Imported commodity bulk prices were in high turbulence. Influenced by excessive flow globally, the situation in Middle East and North Africa, and Japanese earthquake, imported commodity bulk prices raised significantly with a rapid growth of imports amounts. From January to September, the average imports price rose by 14.8% and average import volume increased by 10.3%. The average imports price of crude oil, iron ore, refined oil, natural rubber, edible vegetable oil, were up 37.7%, 35.4%, 34.1%, 61.9% and 38% with an increase on imports amounts of 43.2%, 50.3%, 52.4%, 74% and 30.7% respectively.

Trade surplus continue to fell sharply. The trade surplus of September was $ 14.51 billion, down 12.4% over last year, 2.3 percentage points lower than August. Among that, general trade deficit was US$ 10.07 billion, up by 102.9%. Processing trade surplus was US$ 33.92 billion, increased by 10.2%. From January to September, trade surplus was US$ 10.71 billion, down by 10.6% over last year. Among that, general trade deficit was US$ 67.57 billion, up by 80.4%. Processing trade surplus was US$ 263.92 billion, increased by 17.0%. Trade surplus to the U.S. and the EU increased by 9.7% and 5.3% while to ASEAN, Australia, Brazil, and Korean were 54.4%, 47.5%, 44.2% and 10.5 respectively.

In addition, according to the statistics by MOFCOM our signed outsourcing contracts in the first three quarters amounted to US$ 28.64 billion and US$ 20.01 billion for execution, up by 67.8% and 65.7 respectively year on year; US$1.24 billion and US$ 2.07 billion higher than the total amounts over last year. Among that, undertaken international service outsourcing contacts amounted to US$ 20.92 billion and US$ 14.51 billion for execution, up by 69.8% and 65.6 respectively. US$1.09 billion and US$ 70 million higher than the total amounts over last year.

III. Development of China's Cultural Trade

Recently, under the strong support of the central government, relevant ministries and local governments acknowledge the role of developing China's cultural trade as an important part in revitalizing cultural industry and transforming the development mode of foreign trade, further enhancing policy support on cultural exports, and promoting the “Going Global” of Chinese culture.

Export of Chinese culture accelerated during the “11th Five Year Plan” period. From 2001 to 2010, export of cultural products and services increased by 2.8 times and 8.7 times respectively, and the ratio of import of book copyright over that of export declined from 9:1 in 2003 to 3:1 in 2010. During the “11th Five Year Plan” period, the main characteristics of China’s cultural exports were as follow: First, a policy environment supporting export of Chinese culture was initially formed nationwide, with China Export-Import Bank and Bank of China actively providing loans for key cultural exports enterprises. Second, cultural enterprises began to expand cultural exports throughways like direct oversea investment. For example, China Heaven Creation began to make in-performances after it took over the White House Theatre in Branson of the U.S., stepping out the first step in oversea acquisition and operation of theatres by Chinese performing arts companies. Third, emerging cultural services such as online games has become an important increment in cultural exports. Fourth, international market demand began to promote Chinese cultural enterprises to achieve internationalized development by capital operation.

MOFCOM has been focusing on advancing cultural trade: Firstly, continuously improve policy framework of export promoting. In recent years, MOFCOM worked with relevant departments to promulgate several policies to encourage culture export, including the “Guiding Catalogue of Culture and Services Export”, and the “Guiding Opinions on Further Developing Key Enterprises and Projects to Export Chinese Culture”, clearly specified the development goals, main tasks and safeguard measures on exporting Chinese culture. Secondly, strengthen the organization and leadership over culture export. MOFCOM has worked with 12 departments including the Publicity Department of CPC and Ministry of Culture to establish an inter-ministerial working mechanism on key enterprises and projects of cultural exports, strengthening communication and coordination on policy researching, training, information releasing as well as statistics system, effectively promoted the implementation of policies and measures. Thirdly, culture export was encouraged with key enterprises and projects as the starting point. MOFCOM, working with relevant departments, appraise and elect national key enterprises and projects on culture export every two years according to the “Guiding Catalogue of Cultural products and Services Export”. Fourth, international trade and exchanges are boosted by culture trade exhibitions as the platform. MOFCOM has held a series of trade and exchanges with the Shenzhen International Cultural Industries Fair and China Trade in Services Congress as important platforms. MOFCOM also built an information platform for enterprises on culture export and services through the network of "China Trade in Services". Fifth, culture trade statistics were used as basis in promoting cultural exports. MOFCOM has established, with the support of the Chinese Customs and the State Administration of Foreign Exchange, a cultural trade statistical system, and from 2007, Cultural Trade Statistics Express has been monthly released, laying a foundation for monitoring the trend in export of culture, at the same time providing a reference for enacting the policies of cultural services trade.

IV. Attracting foreign investment

From January to September, 20,400 new foreign-invested enterprises were approved in China, up by 6.24% year on year. The actualized FDI reached US$86.679 billion, up by 16.6% year on year. In September, the actualized FDI nationwide amounted to US$9.045 billion, up by 7.88% year on year.

In terms of industrial structure, the growth rate of actualized FDI in service industry continued to take the lead. From January to September, the actualized FDI in agriculture, forestry, husbandry and fishery reached US$1.387 billion, up 10.18% year on year. The actualized FDI in manufacturing sector registered US$39.965 billion, up by 12.97% year on year. Actualized FDI in service sector reached US$40.192 billion, up by 20.13% year on year, taking up 46.37% of the country’s total in the same period. The growth rate of actualized FDI in such service sectors as comprehensive technical services, special machinery and equipment repair, wholesale, retail, tourism and transportation services increased over 60% year on year, while real estate sector grew only 13.29%, 6.84 percentage points lower than the total service sector growth rate.

Concerning sources of foreign investment, investment from Asia rose while that from Europe dropped from the year-on-year growth and downward from the US investment. From January to September, the total investment from ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea) was US$65.323 billion, up by 23.66% year on year. The actualized FDI from the US reached US$1.877 billion, down by 9.88% year on year. The actualized FDI from the EU 27 countries totaled US$4.184 billion, down by 1.8% year on year.

With regards to geographic location, the actualized FDI in eastern and central regions grew faster while that in western region slowed down in growth rate. From January to September, the actualized FDI in eastern region reached US$74.357 billion, up by 16.24% year on year, 0.36 percentage points lower than the countries average growth rate. The actualized FDI in central region reached US$5.995 billion, up by 27.21% year on year, 10.61 percentage points higher than the average growth rate. The actualized FDI in western region reached US$6.327 billion, up by 11.85% year on year, 4.75 percentage points lower than the average.

V. Outward investment and economic cooperation

Direct outward investment. During January to September, domestic Chinese investors had directly invested in 2,526 overseas companies of 129 countries and regions, with outward direct investment in non-financial sectors reaching US$40.75 billion, up by 12.5% year on year. Direct outward investment has mainly flown to Hong Kong, Cayman Islands, Virgin Islands, Australia, Luxemburg, Singapore, and the US, etc. Among that, direct investment to Hong Kong amounted to US$22.98 billion, up by 29.9% year on year, accounting for 56.4% of the total direct outward investment during the same period. Outward direct investment by regions reached US$13 billion, accounting for 31.9% of China’s total in the same period, up by 8.3% year on year, among which Jiangsu, Shandong, Zhejiang, Shanghai and Guangdong are in the lead.

Foreign contracted projects. In the first nine months, the accomplished turnover of China’s foreign contracted projects reached US$66.66 billion, up by 12.4% year on year; and the value of newly signed contracts reached US$93.12 billion, up by 13.6% year on year. The top ten countries and regions of the newly signed contracts were: India, Saudi Arabia, Hong Kong, Vietnam, Angola, Malaysia, Burma, Algeria, Nigeria, and Indonesia, with a total contract value of US$36.11 billion, accounting for 38.8% of the total value of newly signed contracts. In terms of industrial distribution of newly signed contracts, foreign contracted projects mainly concentrated in the industries of electric power, housing construction, transportation construction, electronic communication, petrochemical, manufacturing and processing. By the end of this September, the accumulated value of signed contracts in China’s foreign contracted projects stood at US$792.5 billion, and the accomplished turnover amounted to US$502.2 billion.

Foreign labor service cooperation. In the first nine months of 2011, all kinds of labor sent abroad by labor cooperation projects reached 308 thousand, 26 thousand more than that of the same period of last year. By the end of September, all kinds of labor were sent to the following countries and regions: Japan, Singapore, Macao, South Korea, Angola, Algeria, Saudi Arabia, Hong Kong, Russia and Burma. The number of all kinds of labor sent abroad by labor cooperation projects totaled 5.74 million on a cumulative basis.

VI. Comprehensive pilot programs of modern circulation for agricultural products

During 2010-2011, the Ministry of Commerce and the Ministry of Finance has allocated 1.86 billion yuan of in total central fiscal fund to 17 provinces including Chongqing, Hebei and Hainan to support the implementation of comprehensive pilot programs of modern circulation for agricultural products, including wholesale market for agricultural products and farmer’s market upgrade and reform, direct farm-supermarket connection, innovation of agricultural products circulation mode, and transporting fresh vegetable from South to North. Currently, among the 825 pilot projects established in 2010, 80% of them have been completed and put into use, and the pilot work is progressing smoothly with obvious achievements.

Circular system and circulation infrastructure has been improved. By way of the pilot program, some provinces have stepped up integration of agricultural products market system, fostered a batch of backbone markets, created a stable production and selling chain, and formed a preliminary modern circulation network of agricultural products. In the 2010 pilot program, over 1.7 million square meters of market transaction area was added, 549 cold stores were established, 110 processing and distribution centers were constructed and reconstructed, and 185 inspection and testing centers were set up.

Circulation links and circulation cost for agricultural products have been reduced. Production and selling connection mechanism was established, such as farm-wholesale market connection, farm-supermarket connection, farm-college connection, and farm-community connection. Minimum purchasing quantity and minimum contract duration was set to promote farm-supermarket connection as a normal state. Meanwhile, stable business chain was established as agricultural wholesale enterprises connecting both production areas and sale areas. In the program of transporting fresh vegetable from South to North in Hainan, 12 concentration and distribution centers were set up in the main production area, and 8 transaction and distribution centers set up in the main sale area; one wholesale market was established both in Haikou and Tianjin, and totally 22 production and selling business chains leading to the North were established.

Establish quality tracing system, and guarantee meat and vegetable safety. Since this July, the Ministry of Commerce and the Ministry of Finance have set up meat and vegetable quality tracing pilot system in 20 cities nationwide. And the pilot programs are carrying out in over 170 butcher companies, 100 large-scale wholesale markets, 3,000 standardized vegetable markets, and 1,400 large and medium supermarkets, and are expected to cover over 150,000 individual companies. Among that, the meat quality tracing system is preliminary established and carrying out in Shanghai, Qingdao, Chengdu, Hangzhou, Nanjing and Wuxi; vegetable tracing system will be put into use recently on a trial basis, and is expected to connect with the central platform by the end of this year, preliminarily realizing the meat and vegetable trans-regional tracing.

In addition, the comprehensive pilot programs of modern circulation for agricultural products has increased farmers’ income, guaranteed market supply and ensured price stability. The operation scale and capacity of the markets with pilot program has been significantly enhanced, which has created a great many of jobs, brought along 13 billion yuan of total social investment and obviously boosted the income increase of neighboring framers.

Ⅶ. China-US Cooperation in IPR Protection

On October 17-21, MOFCOM, the Publicity Department of CPC and the Supreme People's Procuratorate held China IPR Overseas Publicity Week in US, with “Cooperation” as the main theme. IPR is an important topic in Sino-US economic relations, and since the 1980s, exchanges on IPR protection have been carried out between the two sides. From 2004, exchanges on IPR protection have been deepened through such forms as the JCCT IPR Working Group meetings, promoting bilateral trade and economic development. At present, China has become the 3rd largest technology export market of US, and cumulative US investment projects in China was over 60,000.

There are both consensus and differences between China and US in IPR protection. China believes that,to solve the problems in Sino-US IPR protection, it is necessary to deepen exchanges and cooperation between the two parties on the basis of comprehensive development of Sino-US economic and trade relations. Firstly, respect for the economic development level, cultural and historical traditions and capacity of each other, pay close attention to the balance of interests between the IPR holders and the public, and between economies at different levels of development, and promote comprehensive development in institutional creation, protection, management and utilization of IPR. Secondly, actively explore comprehensive IPR cooperation projects on the basis of effective communication and cooperation in patent, trademark and copyright, finding the converging point for IPR protection standard that meets the interests of both parties.

China has establish a bilateral exchange and communication mechanism on IPR protection with several countries and regions including the United States, covering all areas of IPR protection as well as IPR-intensive industries including music, movies, high-tech and Internet. It was found in the campaign against cracking down software piracy and the investigation of IPR-infringing imports and exports by the Customs, that there was an increasing proportion of IPR infringement on domestic IPR holders, and MOFCOM has set up an overseas IPR protection center, aiming to help enterprises, especially the SMEs to understand and comply with the IPR legal system in all countries, and establish standards for prevention of IPR infringement in such areas as information service, legal advice, international exchanges and training as well as monographic studies, so as to enhance enterprises’ capacities in protecting their legitimate rights abroad.

Now I will take your questions.

CCTV: I have two questions. First, recently, small and medium sellers attacked larger sellers at Taobao Mall (tmall.com), many people think the case showed the disputes between small and medium sellers and e-commerce managing entity in China’s e-commerce development, and I would like to ask whether third-party appraisal mechanism should be introduced to e-commerce. Second, the issue of unsalable potatoes in Inner Mongolia has basically been solved with the help of the Ministry of Commerce. As currently not only in Inner Mongolia, the problem of unsalable agricultural products occurred in some other places in western China, will MOFCOM solve the problem together with the Ministry of Agriculture? Will relevant measures be adopted in the next year to guide farmers to avoid such issue?

Shen Danyang: I will firstly answer your second question. MOFCOM paid highly attention to Inner Mongolia unsalable potatoes issue, and quickly initiated Aid program for unsalable products. According to statistics, until now, the main potato production area in Inner Mongolia has sold over 2.06 million tons of potatoes, and stored 1.834 million tons, accounting for 86% of the total output.

In recently years, MOFCOM and commerce authorities at all levels have actively explored how to help farmers to solve the problem of unsalable agricultural products. The farmers who have difficulties in selling their products can immediately contact the grassroots commerce department report the situation and start program. The Program currently contains three Connections: First, online connection. After starting the Program, MOFCOM and local commerce department will do online sales promotion and connection for sellers and buyers through the agricultural information exchange platforms such as New Rural Commercial Net and “Business Report”. It will, on one hand, guide farmers with unsalable problems to provide supply information, and on the other hand, guide wholesale markets, large-scale supermarkets and manufacturing enterprises with processing capacity in the main production area to conduct online matchmaking purchase. In August of 2006, MOFCOM opened New Rural Commercial Net; in 2008, MOFCOM selected one pilot county respectively in 20 provinces, launched service platforms, established 1,400 grassroots information service stations, making rural commercial information service cover the “rural commercial information service system” in the pilot areas, and annually organized online summer, autumn and winter purchase-sale connection meeting when the agricultural products enter market. Second, farm-supermarket connection: MOFCOM and local commerce authorities will organize domestic large-scale supermarkets to do on-the-site purchase at the production area and set up special counters for sales promotion. Third, farm-wholesale market connection involves guiding large-scale wholesale markets, export enterprises and distributors to actively purchase and sell, and encouraging large-scale wholesale markets to set up special booth and lower the booth fee. Moreover, commerce departments will do everything possible to help solving unsalable problem, such as increasing local temporary reserve, guiding to processing transfer, encouraging export expansion, and strengthening information guidance. Of course, to fundamentally solve the unsalable problem, the key is to be market-oriented and further foster and develop make-to-order agriculture to reduce the blindness of production.

As to the Taobao Mall case, we are happy to see, under the joint efforts of relevant parties, it has been settled properly. The Taobao Mall announced the specific measures at its press conference held on the afternoon of 17 October. It is developing towards a rational and positive direction. You just mentioned how to establish and strengthen third-party transaction platform in a long term, which I think it is a good question. The next step, MOFCOM hopes relevant departments to reinforce the operation guidance and service for third-party transaction platform, besides to follow up with Taobao Mall issue. I think to make out operational measures concerning the rights of online retailers and consumers; we should fully hear suggestions from relevant sides, be fair and coordinated, and maintain the continuity, stability and predictability of relative measures. The root cause of the matter is our weak legal foundation, insufficient regulations and imperfect supervision system in the online retailing field. Therefore, we should speed up the construction of legal administrative system on online retailing, set forth the Administrative Regulation for Online Retailing as soon as possible, form the market entry and exit mechanism for third party transaction platform, improve market rules, define the right, obligation and responsibility of all parties of online retailing market, further make clear of the administrative duties of relevant departments, so as to promote the healthy and sustainable development of online retailing market. Thank you.

HK Wenhui newspaper: According to the statistics, the growth of China’s import and export in September both fell considerably, I would like to ask whether the weak demand trend of American and European markets will affect China’s import and export, and whether the future import and export growth will continue to fall. Thank you.

Shen Danyang: From the statistics I shared just now, China’s foreign trade conditions are generally good. Against the tough internationalbackground, the import and export in the first three quarters maintained stable and relatively rapid growth, trade structure continued to optimize, market diversification made new progress and trade surplus further decreased. All of these showed our uneasy achievements in foreign trade.

Nevertheless, we are acutely aware that due to the changes of domestic and international environment, especially the increase of unstable and uncertain factors influencing China’s foreign trade, import and export situation of last quarter of this year and first season of next year will be quite tough.According to the statistics of the 110th Canton Fair we have acquired, the total number of visitors to Canton Fair was 93,000 in the first three days, increasing only 2.6% and 13.2% as compared with that in the Spring Session of 2011 and that in the Autumn Session of 2010 respectively. Total export transaction value was US$ 10.19 billion, up by 4.2% over the same period of last session and 14.5% year on year. Among the ordersconcluded, short-term orders within 3 months accounted for 51.7%, orders for 3-6 months accounted for 35.5%, long-term orders for over 6 months took up only 12.8%. Considering the factors such as costs of external demand, exchange rates and cost comparability base, it is expected that import and export growth in 2012 will be higher in first half of the year, and lower in the second half.

MOFCOM will join efforts with relevant departments to implement the requirements of President Hu Jintao expressed in his congratulatory letter to the 110th Canton Fair and massages from Premier Wen Jiabao during his recent investigation on foreign trade enterprises in Guangdong Province, working hard to maintain stable export-related policies in such areas as export tax rebates, import and export credit, export credit risk protection, the RMB exchange rate, cross-border trade settlement in yuan and trade facilitation. Meanwhile, we will actively expand import, accelerate transformation of the mode of foreign trade development, and speed up the development of new advantages, so as to promote the development of foreign trade to achieve the established goals.

French News TV: The first question is about the relationship between EU and China. Many people say that China has a lower degree of openness to European companies, is it right? The second question, EU is facing with very serious financial crisis, and needs China’s help, how will the Chinese government provide help to EU, and how should EU address the debt problem?

Shen Danyang: Thank you for your question. Generally, the situation of EU investment in China is positive, as well as the situation of China’s utilization of foreign capital. 2011 marks the 10th anniversary for China’s accession to the WTO. In the past ten years, China has opened on schedule over 100 sectors in services trade, and foreign investment has covered most of the areas including agriculture, manufacturing and services, and has established an all-round, multi-layer and wide-ranging structure of opening up. At present, there are over 190 countries and regions investing in China, and almost all EU countries have invested in China. 480 of the Fortune 500 enterprises have invested or operated in China. China’s total FDI inflow is ranked first for 19 consecutive years among developing countries. And China will adhere to the basic national policy of opening up as well as the guideline of positively and effectively utilizing foreign capital from all countries and regions including the EU, opening up more sectors, so as to further promote investment facilitation.

Regarding China's investment and cooperation in EU, the Chinese government is making efforts to promote Chinese enterprises to invest in Europe. Investment from Chinese enterprise to EU not only enrich China-EU trade and economic cooperation, but also help EU cope with the debt crisis. Several projects invested by Chinese enterprises in EU recently received positive response from all parties in EU. Since Henan Linkglobal acquired German Parchim Airport, the airport has achieved profitability, and booking of international flights increased, promoting local economic development. And in June 2008, Cosco Pacific won the bid in the tender for Greece’s Piraeus Port, acquiring operating right of 35 years, and promising nearly 500 million Euros for port construction. After the Greek parliament approved the project, COSCO Pacific resumed the port’s normal operations in a short period of time, promoting local social and economic development. Under the current difficult situation in Greece, investments from China are especially helpful and cherishable. In short, the Chinese government will continue to encourage Chinese enterprises to invest in Europe. It is of mutual benefit for Chinese enterprises to invest in EU, and it is a complete corporate behavior, and the government plays its role as public service provider. Thank you.

China Business Journal: China’s trade surplus narrowed 12/4% in September. What do you think about this data? All long, the relative small proportion of our domestic consumption on imported products. High import tariffs and consumption tax have resulted in a certain degree of purchasing power outflow. Do you think there will be a trend of substantial tariff reduction on imported products?

Shen Danyang: It is within our expectation that China's foreign trade surplus in September further decreased, which shows the objectives set in the beginning of the year has been gradually achieved. The scale of China’s trade surplus was smaller in the first three quarters of 2011 despite the expansion of foreign trade. Trade surplus accounts for about 4% of total trade volume, while accounts for a little more than 2% in China’s GDP, both are declining. And what does this mean? It shows the determination and action of the Chinese government in promoting China’s trade balance, and it's unreasonable to suspect China's trade surplus and attempt to press China with that excuse.

The questions you asked about imported consumer goods, you may have noticed, has already been put forward in the China’s 12th Five-Year Plan. It was the first time to bring forward expanding importation of consumer goods, which had never mentioned before. We used to encourage the importation of hi-tech products and urgently-needed important energy and raw materials while this time we put forward to the expansion of importation consumer goods. Actually, MOFCOM has always been promoting this job. We think that to expand importation of consumer goods will benefit our people, so they can buy more high quality imported products at lower prices. In addition, it will meet the various needs of consumers. Why not do it?

Second, in view of macro economics, to expand importation of consumer goods will be conducive to promoting the upgrading of consumption structure, strengthening residents’ consumption capability, enlarge consumption scale and accelerate strategic adjustment of our economic structure. Of course it will certainly further improve trade balances.

Here I still want to state clearly that imported consumer goods are subject to tariff and GST. To reduce the taxes of imported consumer goods is an important and effective way to expand importation of consumer goods, but not the only way to do so. To change consumer concept, to transform the traditional ideology of encouraging export and limiting import, to encourage foreign government and enterprises to launch trade promotion activities, and to provide imported consumer goods with a better business environment in China, are also effective ways to promote importation of consumer goods. Maybe you have also notice that some states from U.S. make use of Canton Fair to promotion their own products as well as those enterprises from Japan which set their own booths for promoting. These are all good ways for expansion of imported consumer goods. Thank you.

Market News International: Recently, MOFCOM released Circular on Relevant Issues about Cross-Boarder Direct Investment in RMB. What adjustments and modifications have done to your draft document according to public concerns? Thank you.

Shen Danyang: Recently, MOFCOM has released Circular on Relevant Issues about Cross-Boarder Direct Investment in RMB. In the process of formulation, MOFCOM and relevant departments have conducted careful researched and consultation. It took almost a month (from August 22 to September 20) to solicit comments from the public and we got over 50 pieces of advices from more than 30 institutions and persons in total. This circular was supposed to be implemented in September, which I had mentioned in last conference. But it was delayed until October as MOFCOM attached great importance to it and carefully researched and consulted on the collected comments with relevant departments. In the formed document adopted those suggestions of high public concern, including strategic investment in RMB from overseas and repayment of loans from home and abroad. I’d like to express my heartfelt thanks to all the sectors of society for their care and supports of this work from. Thank you for your question.

Xianhua News Agency: Would you please introduce the latest development of U.S. exchange rate bill and what measures China would take to cope with this problem? Thank you.

Shen Danyang: China has clarified its position on the bill passed by United States Senate. As the spokesman of MOFCOM, I have made the statement twice that United States Senate aims to force its trade partners to appreciate their currency through legislation, which had seriously violated international rules and deviated from the international obligations of U.S. If the American side takes its own course, it will severely damage the mutual benefit relations between the two countries as well the long term interest of the people of both countries. China will have to make further reoponse. We hope that U.S. government will not politicize economic issues, not “force others to take medicine while it itself is sick” not do anything that hurts others while does not good to itself or just shot themselves in the foot. Thank you.

Phoenix Satellite TV: I have two questions, one is about diesel fuel. Now, private gas stations are not able to get diesel fuel from Sinopec and CNPC. My question is what measures MOFCOM will take to deal with market supply? The second question is what the sensitive events happened between China and ASEAN will impact on the building of ASEAN FTA? Thank you.

I’d like to answer the latter question first. Since the establishment of ASEAN FTA in 2010, China and ASEAN have strengthened mutual trust, accelerated trade development, deepened economic integration and achieved mutual benefit and a win-win situation in both enterprises and people’s income. So we believe that the overall situation between China and ASEAN will not be affected by accidents.

I’d like to use this opportunity to introduce you the data of building of China and ASEAN FTA. The trade volume of China and ASEAN was US＄78.2 billion in 2003, and rose by US＄292.8 billion by the end of last year, with an increase of more than four times. In the first three quarters of this year, the trade volume increased by 26.4% over the same period over last year. China has become the largest trade partner of ASEAN while ASEAN has surpassed Japan and become the third largest trade partner of China. At the same time, FTA has also promoted industrial cooperation between the two sides with a significant result in mutual investments. The previous feature of uneven development of trade and investment cooperation between China and ASEAN has greatly changed. In the future, based on mutual benefit, China and ASEAN will continually deepen and enrich free trade agreements, further improve liberalization and facility of trade and investment. I believe the results of FTA will be better and better.

As for the question you mentioned about diesel supply, MOFCOM needs to consult with other relevant departments, especially with departments responsible for administration of production supply and pricing, and major oil suppliers. MOFCOM is in charge of administration of the retail of diesel and various kinds of refined oil, while this time it is a problem of supply of refined oil and diesel market. We believe that relevant departments will jointly come up with a good solution. Thank you.

Finance and Economics channel of CCTV: the Sixth Plenum of the 17th Central Committee of the Communist Party of China proposed a new model of culture innovation to promote Chinese culture to the world. We know that the Ministry of Commerce has done a lot of work to boost the popularization of culture. I would like to know what will be the next job in this regard. Thank you.

Shen Danyang: Thank you. Immediately after the closing of the Sixth Plenum of the 17th Central Committee, Minister Chen Deming hosted the Party Leadership Group meeting of MOFCOM yesterday, introducing the main spirit of the Sixth Plenum of the 17th Central Committee, and making arrangements for studying and implementing the spirit of the Sixth Plenum of the 17th Central Committee. According to the spirit of the Sixth Plenum of the 17th Central Committee and the related requirements of implementation, the Ministry of Commerce will earnestly implement the Central Committee decision together with related departments; fulfill the important task of cultural system reform based on our own conditions, and accelerate the development of culture sector. Furthermore, with the improvement of opening-up pattern, implementation of culture “going global” project, the increasing ability of absorbing foreign cultural achievements and improvement of culture development and opening-up policy, we will coordinate relevant departments to do all aspects of work such as service support of culture “going global”, enhance the level of culture openness and boost socialist cultural development and prosperity. Thank you.

CNR: I have two questions; firstly, what’s your comment on the resignation of Wal-Mart China CEO? Secondly, what is your view on the quality problem of products of the foreign brand name Supor?

Shen Danyang: As far as I'm concerned, it’s quite normal for a multinational enterprise to change its executives. We have never made any comment on the personnel adjustment of enterprises. In regard to the quality problem of Supor, I will request the Press Office of MOFCOM to respond after further enquiry.

That concludes the press conference today. Thank you.



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