Dear friends from the Press,

Good morning. I am very glad to meet you all again and make a briefing on China’s commercial performance in January-May 2013, and answer your questions.

I. Commercial performance in Domestic Market
Total retail sales of consumer goods in January-May was up by 12.6% year-on-year, 1.9 percentage points lower as compared with that of the same period of 2012. Retail sales of consumer goods in May were up by 12.9%year-on-year, 0.1 percentage points higher as compared with that in April 2013, and domestic consumer market kept rising slightly. The main features of domestic consumer market in May are as follows:

1. Consumption in rural areas saw a fast growth. According to the statistics by NBS, consumption in rural areas was up by 14.8% year-on-year, 0.5 percentage points and 1.0 percentage points higher than that of 2012 and that of April, and 2.2 percentage points higher as compared with that of urban area.

2. Sales by medium and large sized circulation enterprises rose slightly. Sales of 3,000 key retailers monitored by MOFCOM were up by 9%, 0.2 percentage point higher than that of April, and 1.1 percentage points higher as compared with that of 2012.

3. Sales of foodstuff, garments, home appliances and communication equipment rose steadily. Among the 3,000 key retailers monitored by MOFCOM, sales of foodstuff, garments, home appliances and communication equipment rose by 7.9%, 6.6%, 18.7% and 5% year-on-year respectively, and sales of, with the growth rate rising by 0.5%, 5.5%, 13.7% and 5.7% respectively as compared with that of April.

4. Consumption in catering was slowly up According to statistics by NBS, catering revenue rose by 9.2% year-on-year, 1.3 percentage points higher as compared with that of April, 3.7 percentage points slower as compared with that of 2012. Of which revenue of large- and medium- sized catering enterprises declined, with that of catering enterprises above designated size down by 1.8%, and key catering enterprises monitored by MOFCOM fell by 6.6% year-on-year, 1.0 percentage points and 0.5 percentage points slower respectively as compared with that of in April.

5. growth in Sales of gold, silver and jewelry, automobiles and furniture was slowing down. Sales of gold, silver and jewelry in 3,000 key retailers monitored by MOFCOM rose by 29.7% year-on-year, and sales of furniture and building materials were up by 1.1% and 4.5% respectively year-on-year, with the growth rate falling by 42.2%, 1.3% and .2% respectively as compared with that of April. Sales of automobiles rose by 1.3% year-on-year, and retail sales of cultural and office supplies and sports and recreation products fell by 3% and 5.4% respectively year-on-year.

6. rate of price rise fell down by small margin. According to statistics by NBS, the overall consumer price in May was up by 2.1% year-on-year, with the growth rate falling by 0.3% as compared with that of April. The overall consumer price in first five months was up by 2.4% year-on-year. According to monitoring by MOFCOM, the price growth of agro-foodstuff fell in May, and prices of pork, chicken and aquatic products were down by 5.4%, 2.8% and 1.1% respectively year-on-year, while price growth of beef, mutton, eggs and peanut oil rose by 30.7%, 17.1%, 11.7% and 9.3% respectively year-on-year.

II. Foreign Trade

According to Customs statistics, total value of China’s import and export from January to May 2013 exchange rate fluctuations excluded (same as below) was RMB 10.51 trillion (equivalent to US$ 1.6763 trillion), up by 10.9% year-on-year. Out of which, exports amounted to RMB 5.51 trillion (equivalent to US$ 878.6 billion), up by 13.5%; and imports amounted to RMB 5 trillion (equivalent to US$ 797.7 billion), up by 8.2%. Trade surplus was RMB 507.9 billion (equivalent to US$ 80.9 billion) with an increase of 1.2 times. The main features of foreign trade were as follows:

1. Trade with major partners of U.S. and ASEAN was steadily up while trade with the EU and Japan was down. From January to May, China’s bilateral trade with the U.S. and ASEAN rose by 6.9% and 14.8%respectively; and with the E.U. and Japan dropped by 2.8% and 8.9%, respectively.

2. Exports by central and western China remained active; export by provinces in eastern China saw ups and downs. From January to May, exports by Anhui, Jiangxi and Sichuan went up by 60.2%, 25.7% and 13.8%, respectively; total import and export by 7 provinces and cities in eastern China such as Guangdong and Jiangsu accounted for 80% of total value of foreign trade; among others, import and export by Guangdong jumped up by 26.9% while import and export by Shanghai dropped by 2.5% on a year on year basis. Import and export by Jiangsu, Beijing, Zhejiang, Shandong and Fujian lifted by 1.5%, 1.3%, 6.0%, 7.3% and 18.2%, respectively.

3. Both general trade and processing trade were steadily up. From January to May, general trade was up by 7.1% to US$ 858.59 billion. Of which, export was US$ 416.05 billion, up by 12.0%; import was US$ 442.54 billion, up by 2.9%; processing trade was up by 3.2% to US$ 547.07 billion; of which export was US$ 344.13 billion, up by 1.1%; import was US$ 202.94 billion, up by 7.0%. Trade surplus by processing trade was US$ 141.19 billion.

4. Private enterprises remained the key driver for the growth of foreign trade; import and export by foreign-invested enterprises saw slow growth while import and export by state-owned enterprises experienced negative growth. From January to May, import and export by private enterprises was US$ 535.63 billion, up by 41.0% year-on-year and 30.1 percentage points higher than the overall growth; imports and exports by foreign invested enterprises were US$ 755.28 billion, up by 0.7% year-on-year; imports and exports by state-owned enterprises were US$301.71 billion, down by 4.4% year-on-year.

5. Exports of mechanical and electrical products were steadily up and exports of traditional labor-intensive products saw good growth; import volumes of most energy and resource products were increasing. From January to May, export of mechanical and electrical products from China was US$ 511.05 billion, increasing by 14.2% and accounting for 58.2% of total export value of China over the same period; total export of seven categories of traditional labor-intensive products of clothing, textile, footwear, furniture, plastic products, bags and suitcases and toys was US$ 171.2 billion, up by 15.4% year-on-year , accounting for 19.5% of total export. In imports, bulk resource and energy products were on the rise in import volume. Among others, import volumes of iron ores, product oil, plastics of primary forms were 320 million tons, 18.32 million tons and 9.52 million tons, respectively growing by 4.7%, 6% and 1.9% year-on-year; import volumes of beans and steel were 20.57 million tons and 5.75 million tons, down by 12.2% and 1.8% year-on-year. (10:09:42, June 18, 2013)

III. Foreign investment

From January to May of 2013, 8,609 foreign-invested enterprises were newly approved, down by 7.04% year on year; realized FDI amounted to US$47.595 billion, up by 1.03% year on year. In May, realized FDI reached US$9.256 billion, up by 0.29% year on year (excluding the statistics of banks, securities and insurances). The main features of foreign investment in January-May period are as follows:

1. Realized FDI in service sector kept growing. From January to May, realized FDI in agriculture, forestry, animal husbandry, and fishery sectors reached US$583 million, down by 15.22% year on year, accounting for 1.23% of the national total. Realized FDI in manufacturing sector registered US$20.882 billion, down by 1.39% year on year, taking up 43.87% of the national total. Among that, petroleum processing, coking and nuclear fuel processing were up by 237.85% year on year; communication equipment manufacturing up by 85.85% year on year; and pharmaceutical manufacturing up by 38.44% year on year, all of which enjoyed a rapid growth. Realized FDI in service sector registered US$22.995 billion, up by 4.03% year and year, taking up 48.31% of the national total. Among that, realized FDI in real estate reached US$9.65 billion, down by 4.95% year on year; the production and supply of gas were up by 605.05% year on year; water transportation up by 146.58% year on year; and environmental management up by 119.22% year on year, all of which grew rapidly.

2. EU and US investments to China increase by large margin. 6887 new enterprises were established by ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea), down by 4.4% year on year, with Realized FDI of US$40.888 billion, up by 0.57% year on year. Among that, Realized FDI from Hong Kong reached US$30.452 billion, up by 1.73% year on year; Realized FDI from Japan, US$3.405 billion, up 5.72% year on year; Realized FDI from Thailand, US$444 million, up 706.72% year on year. 451 new enterprises were established by US, down by 21.02% year on year, with realized FDI of US$1.58 billion, up by 22.62% year on year. 588 new enterprises were established by the EU 27 countries, down by 14.16% year on year, with realized FDI of US$3.452 billion, up by 24.13% year on year. Among that, realized FDI from Germany reached US$1.219 billion, up by 57.33% year on year; realized FDI from France, US$484 million, up 23.55% year on year.

3. Realized FDI in the western China enjoyed a rapid growth. From January to May, Realized FDI in the eastern China reached US$39.679 billion, down by 1.29% year on year; Realized FDI in the central China, US$4.175 billion, up 8.19% year on year; Realized FDI in the western China, US$3.741 billion, up 22.54% year on year. In January-May period, the eastern, central, and western China accounted for 83.37%, 8.77% and 7.86% respectively of the national total amount of FDI. (2013-06-18 10:13:20)

IV. Investment and economic cooperation overseas

Direct investment overseas. From January to May, Chinese investors had directly invested in 2,494 overseas companies in 144 countries and regions, and total direct investment in non-financial sectors (similarly hereinafter) reached US$34.3 billion, up by 20% year on year.

Investments in seven economies including Hong Kong, ASEAN, EU, Australia, US, Russia and Japan reached US$26.9 billion, taking up 78% of the total outward direct investments over the same period of time, up by 16% year on year. Chinese investments in Australia, US, ASEAN, EU grew dramatically by 93%, 76%, 60% and 47% respectively; investments in Hong Kong remained steady growth of 9%; while investments in Russia and Japan dropped by 19% and 18.5% respectively.

Of investment mix, direct investment overseas reached US$10.36 billion by province, up by 20.3% year on year, accounting for 30.2% of the total investments overseas over the same period of time. Among that, Guangdong, Shandong and Jiangsu ranked the top three.

Contracted projects overseas. From January to May, the accomplished turnover of China's contracted projects overseas amounted to US$43.7 billion, up by 19% year on year, and value of newly-signed contracts was US$56.5 billion, up by 29% year on year. The new projects each with a contract value above US$50 million numbered 238 (with 156 over the same period of last year), amounting to US$43.2 billion, accounting for 76% of the total value of new contacts. Among that, the projects each with a contract value above US$100 million numbered 134, an increase of 45 over the same period of last year.

By the end of May 2013, total contract value of the projects overseas reached US$1.0547 trillion with the realized turnover of US$699.3 billion.

Labor service cooperation overseas. From January to May, all kinds of laborers sent abroad reached 185 thousand, with an increase of 10 thousand over the same period of last year. Among that, laborers sent abroad for contracted projects reached 107 thousand and that for labor cooperation projects numbered 78 thousand. By the end of May, all laborers sent overseas totaled 860 thousand, an increase of 32 thousand over the same period of last year. (2013-06-18 10:15:39)

V. Major activities to be carried out recently by MOFCOM

1 27h Session of China-EU Trade and Economic Joint Committee. China and EU temporarily agreed to hold the Committee in Beijing on June 21st of 2013, when Minister of Commerce Gao Hucheng and EU Trade Commissioner Karel de Gucht will co-chair it. The Committee is an annual mechanism at ministerial level for trade and economic communication between China and EU. Both sides will earnestly review the bilateral trade and economic development in the past year, study how to solve the disputes in bilateral cooperation such as the PV trade disputes, and further probe new approaches and areas in bilateral practical cooperation.

2. International Symposium on Global Value Chain and Economic Restructuring. MOFCOM will hold, jointly with WTO, OECD, IMF, US International Trade Commission, Columbia University, Tsinghua University and the University of International Business and Economics, International Symposium on Global Value Chain and Economic Restructuring in Beijing from June 24th to 26th in order to further strengthen international exchanges and cooperation in the research of global value chain and study the relations between global value chain and industrial restructuring. During that period, Summit Forum on the New Phase of China’s Opening-up will be held in the afternoon of June 26th, which majored in several issues such as industrial upgrading in global value chain era and trade as well as economic relations between the South and the North. WTO Director-General Pascal Lamy and OECD Secretary-General Angel Gurria will deliver speeches respectively via video at the Symposium. Besides, Ex-Minister of Commerce Chen Deming will make a speech and Deputy Minister of Commerce Wang Chao will address at the Symposium.

3. The 9th China Meat Expo. As the first event of the Theme Day of the Ministry of Commerce in 2013 National Food Safety Week, the 9th China Meat Expo (hereinafter referred to as the Expo) will be inaugurated in Beijing China International Exhibition Center on June 22 and last for three days. The Expo will highlight five aims in combination with the events of the food safety publicity activity: First, to exhibit achievements made in the construction of national tracking system on meat and vegetable circulation and the “quality-assured meat” service system; second, to exhibit the brand images of large meat producing and processing enterprises in China and the technical advancement and development of the industry, and to show the ideas and determinations of integrity, openness and continuous innovative operation of meat processing enterprises; third, to propagate knowledge on meat product to lead consumers to consume in a scientific and safe way; fourth, to stage four events on meat processing and food safety , which are “Integrity, Openness and Innovation” Initiative in Meat Industry; “Shuanghui Cup” Meat Quality and Safety Knowledge Contest among meat processing enterprises from ten provinces and cities; Meat Products on the Tongue — Cooked Meat Nutrition and Taste Contest and issuance of “Food Safety Knowledge Brochure” and the brochure of “Quality-assured Meat around Us”. The fifth is to hold 2013 China Meat Industry Development Forum, in which discussions will be made around the continuous improvement of meat quality and safety and creation of industry brands. The Theme Day events of the Ministry of Commerce will also include the publicity of food safety entering supermarkets and professional wine knowledge training and publicity, etc.

4. Seminar on China-Japan-South Korea FTA. Seminar on China-Japan-South Korea Free Trade Area will be held in Weihai, Shandong on the afternoon of June 18. Mr. Yu Jianhua, Deputy China International Trade Representative, will attend and address the opening ceremony of the seminar. This seminar is hosted by Trilateral Cooperation Secretariat, the first seminar since China-Japan-South Korea Free Trade Area negotiations was held in last March and the first meeting of representatives of the governments, business and academic institutions In this seminar, discussions will be made on how to accelerate the construction of China-Japan-South Korea Free Trade Area to further enhance the economic connection among three countries, promote trusts and make contributions for the economic integration, peace and prosperity of East Asia.

5. Seminar on Promotion of Local Economic Cooperation by China-South Korea FTA. Seminar on Promotion of Local Economic Cooperation by China-South Korea FTA will be held in Weihai, Shandong on June 19. Mr. Yu Jianhua, Deputy China International Trade Representative, will attend and address the opening ceremony of the seminar. This seminar is hosted by Weihai Municipal Government, Shandong, Present at the seminar are around 60 representatives from the government, industry, academy and enterprises of China and South Korea. In this seminar, discussions will be made on how to further enhance the communications and cooperation between local governments and enterprises of two countries and practically promote in-depth development of economic and trade relation between two countries by constructing China-South Korea Free Trade Area.

It is appreciated that media pay active attention to the events above. (10:20:49, June 18, 2013)

Now I will take your questions.

[China Consumer News]: I noticed some media reports saying that the retail sales of consumer goods grew at a faster speed in May than in April, and that the growth rate has been accelerating since the beginning of this year. Does it mean that China’s retail market has rebounded? How would you comment on this year’s overall consumer market situation? Thank you. (2013-06-18 10:26:42)

[Shen Danyang]: Since the beginning of this year, China’s consumer market went from being relatively weak to stable and now has rebounded to show growth. The total retail sales of consumer goods grew at a year-on-year rate of 12.6%, 12.8% and 12.9% in March, April and May respectively. The nominal growth rates have accelerated. However, the growth rates are still below the level of the previous year. The growth we have seen is mainly of a recovery nature. China’s overall economic situation is stable. Although the consumer market still faces complex situations, effective demands are yet to be further boosted, and retail consumption is constrained by a number of factors, the big picture is that consumer confidence is rising. We are of the view that if macro economic conditions remain stable, policy adjustments are appropriately and effectively made and reform measures for boosting consumption are further implemented, the consumer market is likely to maintain a growing momentum in the second half of this year. (2013-06-18 10:27:00)

[Bloomberg News]: We saw a noticeable decline in the import and export growth rates in May. What are the reasons? According to some Chinese media, MOFCOM conducted a survey on the inflated trade figures. Have you come to any conclusions? What’s your forecast of this year’s overall import and export situation? Thank you. (2013-06-18 10:38:48)

[Shen Danyang]: Foreign trade growth rate declined by a large margin in May. It was the result of a number of factors, and a reflection of the severe and complicated foreign trade situation. Recently, MOFCOM conducted a survey on foreign trade situation on over 1,000 enterprises, which we have been in regular contact with. 1015 enterprises responded to the survey. They contribute around 80% of China’s total export. The respondents view RMB appreciation and sluggish external demands as the two main factors constraining our export growth. In answering what are the main factors currently affecting exports, 73.4% of the respondents choose RMB appreciation, and 72.6% choose weak international demands. In fact, continued and accelerating appreciation of RMB were already having its impacts on our exports back a few months ago. As a result of the sharp narrowing of profit margins and the lack of confidence, enterprises have been reluctant to take orders since a few months before. They now mainly take short-term and small-value orders. As I said at previous press conferences, mid-term and short-term orders accounted for 83.7% of the total at this year’s Spring session of the Canton Fair. When asked what are the specific impacts of RMB appreciation on enterprises, 83.7% of the respondents choose decreasing export profits, 50.7% choose declining orders, 38.1% say that they now only take short-term orders and are afraid of taking long-term orders, and 21.2% either are afraid of taking orders or have to stop the performance of certain contracts. The average export profit margin of the over 1000 respondents is below 3%, and 26.8% of the respondents are losing money in their export business. Consequently, export growth was negatively affected in May and such impacts are likely to continue in the next few months.

The prolonged sluggishness of international demands is another major factor affecting exports. In the recent months, effectively demands on the international market have further shrunk. Latest WTO statistics show that the import trade and the export trade in goods declined by 0.44% and 0.03% respectively in the first quarter year on year. Among the major developed economies, the US, the EU and Japan had negative growths of -2.6%, -6.2% and -7.2% respectively, and it seams that the downward trend is continuing. Our foreign trade growth in the first four months of this year should be attributed to both our policies put in place since last year to stabilize foreign trade and the partial recovery of external demands. However, the conducive affects had been fully cashed by May.

In addition to the above mentioned two factors, enterprises also list some other important factors such as rising costs, insufficient capital, loss of orders and trade frictions. 53.9% of the respondents choose rising costings, 23.1% choose insufficient capital, 18.9% choose losing orders to neighboring countries, and 15.2% choose trade frictions. So this is where our export now stands. (2013-06-18 10:39:15)

[Shen Danyang]: On the import side, slowing growth of domestic industrial production and declining prices of imports are the main factors behind our weak import performance. Since the beginning of this year, domestic industrial production has remained on a low level, thus affecting import demands. In the first five months, the industrial added value of enterprises above the designated scale grew by 9.4% year on year, a growth rate 1.3 percentage points lower than the same period last year; and fixed asset investment in the manufacturing sector grew 18.4%, down by 6 percentage points year on year. Another important factor is that since the beginning of this year, commodity prices on the international market have been declining. By the end of May, the TR/J CRB had been down by 4.8%, the Brent Crude Oil prices had declined by 9.6% and the price of copper had dropped 8.4%. The price of our iron ore imports decreased by 6.3% in May. In addition, the large trade volume in May last year also partly explains the big drop in year-on-year growth rate in May this year. This year’s overall foreign trade situation is grim, and we will have to overcome many difficulties to achieve the grand goals we’ve set.

You also asked about the false growth of trade and our trade to Hong Kong. I would like to give a brief response. Starting from the fourth quarter of last year, a large part of the trade growth between the mainland and Hong Kong was trade via special customs supervision zones, among which a significant part was what the media calls arbitrage trade. As a result, customs statistics on the mainland’s trade with Hong Kong showed unusual growth for a few months. MOFCOM has noticed and investigated the unusual growth. The conclusion is that although the so called arbitrage trade is not a practice to defraud export rebate, as believed by some media, if unchecked, it will hurt the normal economic order and our foreign trade. Therefore, in collaboration with related authorities and local governments, we have studied the reasons behind and developed the solutions. The sharp decrease in the growth rate of the mainland’s trade with Hong Kong in May was mainly because of our efforts to contain the so called arbitrage trade with Hong Kong. Of course, there are other reasons for the sharp decrease such as the overall trade situation being grim and the lack of strong driving forces for trade growth in May. Arbitrage trade was only one of the reasons. I have some statistics to share with you. Our analysis of customs statistics reveals that from January to April, our total export excluding the export to Hong Kong grew by 8.5%. However, in May, our total trade excluding the trade with Hong Kong dropped by 0.12% year on year, with export down by 0.17% and import down by 0.08%. Thank you for your question. (2013-06-18 10:47:23)

[Xinhua News Agency]: I also have a question on export. The central banks of major economies in the world have followed each other in introducing easy monetary policies, and have taken such measures as lowering interest rates or competitive devaluation of their currencies. How, based on MOFCOM’s analysis, will such measures affecting our exports to these countries? Thank you. (2013-06-18 10:49:17)

[Shen Danyang]: Japan and some other countries have had rounds of quantitative easing and interest lowering. As a result, the currencies of China and certain other countries have been forced to appreciate by large margins. Since the beginning of this year, RMB has appreciated by over 13% against the yen, and the real effective exchange rate of RMB has kept breaking record highs, which has had significant negative impacts on Chinese exporters‘ export business and profits. I just mentioned that recently MOFCOM conducted a survey on over 1,000 major companies. 85.5% of the respondents would like to see a stable RMB exchange rate. However, as you all know, to have a stable RMB exchange rate needs more than China’s efforts.

We are of the view that although quantitative easing can, to a certain extent, help boosting a country’s economic recovery, given the current global economic landscape, the negative spill-over effects of such a monetary policy on other countries still outweigh. We hope that countries could act up to the joint statements of G20 central bank governors and finance ministers, make the best efforts to mitigate the negative spill-over effects of domestic monetary policy on other countries, and, especially, stand firmly against competitive devaluation. (2013-06-18 10:49:37)

[China Daily]: On June 4, the EU decided to impose a provisional anti-dumping tariffs of 11.8% on Chinese solar products. China and the EU will have price-undertaking negotiations by August 6. If an appropriate solution is found in this process, the provisional duties will be revoked. What will be China’s next step concerning the anti-dumping and countervailing investigations on Chinese solar products? Has any progress be made? What’s the expectation of both sides reaching agreement by August 6? Thank you. (2013-06-18 10:51:16)

[Shen Danyang]: Since the EU made the preliminary determination in June, the Chinese government and representatives of the Chinese solar products industry have been in close contacts with the EU Commission on price-undertaking negotiations. China’s position remains unchanged, that is, trade disputes should be solved through consultations and negotiations. Both sides have been actively communicating with each other on various levels, from industry representatives to technical officials to minister/commissioner, and relevant negations are being advanced. We have worked hard to have both sides sit down for a talk. I believe both China and the EU should value this opportunity, keep in mind the big picture of China-EU cooperation, adopt a pragmatic approach, and work together to reach a mutually acceptable agreement as soon as possible. Thank you. (2013-06-18 10:51:38)

[CBN]: In the anti-dumping and countervailing investigations on wines from the EU, when will punitive tariffs be imposed? Do you have statistics on the losses suffered by our solar companies following and as a result of EU’s preliminary determination on the anti-dumping and countervailing investigation on Chinese solar products on June 4? Thanks. (2013-06-18 10:53:00)

[Shen Danyang]: We’ve initiated anti-dumping and countervailing investigations on wines from the EU in accordance with relevant Chinese laws and on the basis of the petition filed by the domestic industry. In fact, the domestic wine industry had previously communicated with MOFCOM for a number of times, accusing wine imports from the EU entering the Chinese market by using the unfair trade practices of dumping and subsidy and harming the domestic wine industry, and requested MOFCOM to initiate anti-dumping and countervailing investigations. We found that the petition basically satisfied relevant requirements and decided to initiate investigation. The investigation procedure is clearly provided for in relevant Chinese laws. The investigation authority will strictly abide by the procedure, follow the principle of fairness, reasonableness, due procedure and transparency, fully honor the rights of all interested parties, and conduct investigation and make determination on the basis of objectiveness and justice. For the product scope of this investigation, please refer to the description of the product scope in the initiation notice of MOFCOM. The subject of investigation in the petition is wine imports originated in or exported from the EU.

You also asked about the impact of the preliminary determination on the Chinese solar products industry. We are still in the process of evaluating the impacts. MOFCOM has not obtained relevant details. You may approach the China Chamber of Commerce for Import and Export of Machinery and Electronic Products or relevant industry associations for more information. Thank you for your questions. (2013-06-18 10:53:15)

[International Business Daily]: Yangzhou Bestpak made an appeal to the US Court of Appeals for the Federal Circuit on the determination of the US Commerce Department in the anti-dumping investigation against narrow woven ribbons. The US Court of Appeals for the Federal Circuit ruled in favor of Yangzhou Bestpak. There are reports saying that the ruling overruled the duty calculation method of US Court of International Trade and is of significance to future Chinese respondents of US anti-dumping investigations. What’s MOFCOM’s view on this? (2013-06-18 10:56:36)

[Shen Danyang]: The Chinese side has noticed that the US Court of Appeals for the Federal Circuit ruled that relevant practice by the US Commerce Department in the anti-dumping investigation on narrow woven ribbons violated law. The Chinese side welcomes this ruling. In recent years, the US Commerce Department has, in many of its trade remedy investigations, used punitive duty rates to calculate the average duty rate. Such a practice clearly violates WTO rules. Its our hope that the US Commerce Department could abide by the ruling of the court, forgo its wrong practice, and conduct trade remedy investigation in a fair and just way. Thank you. (2013-06-18 10:56:56)

[China National Radio]: We noticed that MOFCOM recently issued a notice on launching the on-line application process for automatic import licenses for iron ore and alumina. Does it mean that the qualification requirements on iron ore importers will gradually be removed? If so, when will such requirements be fully removed? (2013-06-18 10:57:30)

[Shen Danyang]: For the purpose of macro statistical monitoring and analysis, the Chinese government introduced automatic import license administration on iron ore on March 1, 2005. MOFCOM issues automatic import licenses according to law if a company’s application meets relevant requirements. Our automatic import license administration on iron ore does not constitute import restrictions. Iron ore’s import channels are open and smooth. Therefore, our automatic import license administration should not be mistaken as a qualification administration on iron ore imports. Some industrial associations may, in accordance with their charter or convention, regulate the practices of its member companies, develop consensus on establishing an iron ore import order and issue industry-wide disciplinary measures. This is a different issue and MOFCOM won’t intervene.

In order to promote trade facilitation and provide convenience to companies, MOFCOM will launch the on-line application process for automatic import licenses for iron ore and alumina as of July 1, 2013. In accordance with relevant provisions of China’s Foreign Trade Law and the Measures for the Administration of on Automatic Import License for Goods, all trading companies can make on-line applications for import licenses for iron ore and alumina. Relevant application procedure and process can be found at the website of the Quota and License Administrative Bureau of MOFCOM. Companies can also consult their local commerce authorities. Thank you for your question. (2013-06-18 10:57:45)

[CCTV]: The data you just released show that Chinese companies were active in making overseas investments in January-May. There was a rapid growth, especially in developed countries. Does it mean that Chinese companies will be taking much faster steps in going global? Is the structure of Chinese companies’ overseas investment reasonable in the view of MOFCOM? Thanks. (2013-06-18 11:05:05)

[Shen Danyang]: In the first five months of this year, Chinese investors’ direct investment in non-financial sectors abroad had a year-on-year growth of 20%, and investment in major developed economies also had double digit growths. Therefore, we are fully confident that our overseas investment will maintain a momentum of rapid growth this year. In addition to the rapid growth, Chinese companies are investing in more and more areas, and the overall investment structure is also improving and becoming more reasonable. Statistics show that in January-May, 90% of the overseas investment made by Chinese companies went to five sectors, namely commerce services, wholesale and retail, construction, manufacturing and mining. Except in the areas of commerce services and manufacturing, where we saw decreases, Chinese companies’ overseas investment in other sectors all had strong growths, and investment in the six sectors of construction, mining, resident services and other services, scientific research and technical services, information transmission/software and information technology services, and culture, sports and entertainment all more than doubled.

The world famous accounting firm KPMG recently issued a report. The report says that with the development of overseas M&As by Chinese companies, Chinese investments are entering more and more sectors. In addition to resources projects, the number of projects in other industries are also increasing. According to the report, in 2005-2011, Chinese companies overseas M&As involved 28 sectors, and the figure for last year was 26. In contrast, in 1995, the number was only four. KPMG predicts that driven by domestic consumption upgrading, green development and better innovation capabilities, agriculture and food, new energies, real estate and high-end manufacturing will grow to be the top areas for Chinese companies overseas M&As. Thank you for your questions. (2013-6-18 11:05:26)

[Phoenix TV]: Many analyses have made downward adjustments to the forecasts on China’s economic growth rates. We are following closely the troika for driving the economy. If reform measures for boosting domestic consumption can be further advanced, consumption in the second half of the year will show growth. Does it mean that if the reform measures are not well put in place, consumption will continue to drag economic growth? What are the key directions of the so-called reform measures? We also noticed that foreign investment inflow grew slower in the first five months than in the first four months. Does it mean that the prospect of foreign investment attraction remains very grim? Thank you. (2013-06-18 11:12:19)

[Shen Danyang]: I will start with your question on foreign investment. We should put China’s foreign investment utilization situation in the perspective of the overall global situation. We should not only make comparison with our past performance, but also look at how other economies are doing. We are of the view that given the global situation, the momentum of China’s foreign investment attraction is relatively stable or is relatively better. Take the first few months of this year as an example. From February to May, foreign investment flows into China maintained positive growths for four months in a row. In the period from January to May, foreign investment inflows grew by 1.03% year on year. You mentioned that there was a slower growth in certain month. However, the fluctuation was very minor. Four months of consecutive monthly growth proves to a considerable extent the competitiveness of the Chinese economy and the favorable view of international investors on China’s investment environment. UNCTAD predicts that the global macro economic conditions will only slightly improve or even worsen in this year and the next, and foreign investment recovery will also slow down. Investment from developed countries has remained weak so far this year, and investment flows into some developing countries have declined. At this backdrop, it has not been an easy job for China to have maintained a positive growth of foreign investment inflows. Our forecast is that foreign investment will remain stable for the whole year.

With regard to consumption policies or reform measures for promoting consumption, MOFCOM is participating in the developing of such new measures. However, we are not the leading agency. Some of the reform measures that are being developed, such as those on income distribution, are pro-consumption. Relevant departments are actively working on such reform measures. Thanks. (2013-06-18 11:12:37)

[Shanghai Securities News]: We noticed that since last year, global raw sugar prices have remained weak. China has a quota administration on sugar imports. However, the domestic sugar market is still impacted by the influx of low-price sugar imports. What’s your view on this? Thanks. (2013-06-18 11:19:03)

[Shen Danyang]: As a result of increased supply by major sugar exporting countries such as Brazil and sluggish global demands, the raw sugar price on the international market has been on low levels since the beginning of this year, and is now at its lowest in the recent three years. At the same time, China’s total sugar production and yield per mu have both increased, and domestic sugar supply is abundant. Domestic sugar price has dropped noticeably from the same period last year, but is still higher than international prices. So there is a lower international price and a higher domestic price. Estimates show that if we buy raw sugar from Brazil and then process it into refined sugar，despite a 15% in-quota tariff，the price will still be 1,100 yuan/ton lower than the market price of sugar in Nanning, Guangxi , a major sugar production base in China. If we add a 50% out-of-quota tariff, the price will still be slightly lower than the market price in Nanning. Such a big price difference means that it is profitable to import, and consequently there are increasing sugar imports. According to customs statistics, in January-April, China imported 889,000 tons of sugar, up by 9.7% year on year. The growth rate is actually not as high as some might think it to be. The total import value was 440 million USD, down by 12.7% year on year. Going forward, MOFCOM will continue to follow closely the developments in both domestic and international sugar markets, provide support to efforts by relevant industry associations to guide companies to contribute to a more reasonable sugar importing order for the sake of the long term development and overall interest of the industry. Thank you for your questions. (2013-06-18 11:19:27)

[Beijing News]: Some foreign media reported that in addition to the anti-dumping and countervailing investigations on wine imports from the EU, China may also initiate anti-dumping investigation on high-end cars from the EU. Could you please confirm if it is true? You just mentioned that MOFCOM’s preliminary conclusion on the practice of arbitrage export is that the exporters are not doing so for the purpose of defrauding export rebate. Then what is their purpose? Are they trying to make interest rate and exchange rate related gains as reported by some media? (2013-06-18 11:20:48)

Shen Danyang: As for what kind of gains companies are are trying get through arbitrage export, you may have to ask the companies. Although such a practice does not violate law, it is harmful. That’s why the government has paid close attention to. As I just said, MOFCOM believes that arbitrage trade is harmful and has worked out solutions and taken actions in collaboration with relevant authorities. As a result, the so called arbitrage trade in our trade with Hong Kong was put under check in May.

You mentioned some foreign media reports saying that China is planning to initiate anti-dumping investigation on high-end cars from the EU. I would like to restate that China exercises great caution in taking trade remedy measures, and abides by strictly domestic laws and WTO rules. We have never abused trader remedy measures. They are many on-going trade remedy applications and investigations. However, trade remedy is trade remedy. We are against connecting them all to the solar products case, and are especially against conveniently labeling them as retaliations. (2013-06-18 11:21:09)

Shen Danyang: Thank you. This brings us to the end of today’s press conference. (2013-06-18 11:21:23)