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Regular Press Conference of the Ministry of Commerce on August 23, 2013

Dear friends from the Press,

Good morning. I am going to make a briefing on China’s commercial performance in the first seven months of 2013, and answer your questions.

I. Commercial performance in domestic market

Retail sales of consumer goods kept a steady upward trend in first seven months of 2013. According to statistics by NBS, retail sales of consumer goods in January-July amounted to 12.9277 trillion Yuan, up by 12.8% year-on-year, 1.1 percentage points higher than that of the first half of 2013.The actual growth was 11.4% year-on-year, when price fluctuation excluded, 0.1 percentage points higher as compared with that of the same period of 2012. Retail sales of consumer goods in July saw a nominal increase of 13.2%, 0.1 percentage points higher as compared with that of the same period of 2012. The main features of consumer market in July are as follows:

1. Consumption in rural areas kept growing fast. Statistics from NBS showed that consumption in rural areas rose by 15% year-on-year, 1.4 percentage points higher than that of the same period of 2012, and 2.1 percentage points higher as compared with that of urban area.

2. Online consumption kept a fast growth. According to statistics by iResearch, China’s online retail sales reached 437.13 billion Yuan in the second quarter, up by 24.2% and 45.3% as compared with that of the first quarter and that of the same period of 2012, accounting for 7.3% of the total retail sales of social consumer goods, and was 2.78 times that of total retail sales of social consumer goods. Online consumption monitored by MOFCOM was up by 26.3% year-on-year in July, while that of department stores and supermarkets rose by 15.9% and 8.9% respectively.

3. Consumption in catering saw a slow growth. According to statistics by NBS, revenue from catering in July rose by 9.1% year-on-year, 3.6 percentage points and 0.9 percentage points lower as compared with that of the same period of 2012 and that of the first half of 2013. Revenue of catering enterprises above designated size was down by 2.1% year-on-year, 1.8 percentage points lower than that of the first half of 2013.

4. Sales by small enterprises rose. According to statistics by NBS, retail sales of consumer goods by enterprises above designated size in July rose by 11.2% year-on-year, and that of 3,000 key enterprises monitored by MOFCOM rose by 9.9%, 2.0 percentage points and 3.3 percentage points lower respectively as compared with that of total retail sales of social consumer goods.

Fifth, sales of commodities that could stave off heatstroke soared. Certain areas of China have suffered from high temperatures since July, and MOFCOM started immediately the daily monitoring system in 14 regions. Statistics showed that retail sales of air conditioners and beverage in key enterprises of the said regions monitored by MOFCOM were up by 26% and 9.7% respectively as compared with that in June, and sales of refrigerators in Gome Electrical Appliances of Jiangsu and Suning Electrical Appliances of Shanghai were up by 57% and 50% respectively as compared with that in June, sales of watermelon in fruit wholesale market of Jiujiang, Jiangxi and Chaoyang fruit wholesale market of Wuxi, Jiangsu were up by 34% and 28% year-on-year respectively, and sales of refreshing food including green beans, crystal sugar and white fungus were more than doubled in supermarkets of Zhejiang, sales of sunstroke prevention drug including HuoxiangZhengqi liquid also saw a substantial growth in major pharmacies in Hangzhou and Hunan.

6. Consumer prices remained relatively stable. According to statistics by NBS, consumer price in July was up by 2.7% year-on-year, same with that of June, and was up by 2.4% year-on-year in the first seven months. According to monitoring by MOFCOM in 36 medium and large sized cities in July, price of agro-foodstuff was up by 5.7% year-on-year, of which prices of beef, mutton and vegetable rose by 27.6%, 18.4% and 11.2% respectively year-on-year, and prices of indica rice, aquatic products, chicken and soybean oil fell by 2.7%, 1.4%, 1.0% and 10.9% respectively year-on-year. (2013-08-23 10:24:02)

II. Foreign Trade

According to Customs statistics, total value of our import and export from January to July were of 14.7 trillion Yuan (US$2.35176 trillion), up by 8.5% year-on-year, exchange rate fluctuation excluded (same as below). Among that, exports amounted to 7.74 trillion Yuan (US$1.23873 trillion), up by 9.5%; and imports amounted to 6.96 trillion Yuan (US$1.11302 trillion), up by 7.3%. Trade surplus was 786.51 billion Yuan (US$125.71billion) with an increase of 33.9%. The main features of foreign trade from January to July are as follows:

1. Trade with U.S. and ASEAN was steadily up, and trade with EU and Japan decreased. China-U.S. trade from January to July rose 6.2%, and China-ASEAN trade was up by 12.4%. China-EU trade dropped 1.8%, and China-Japan trade dropped 8.8%. Mainland China-HK trade and Mainland China-Taiwan trade rose 34.1% and 31.7% respectively.

2. Rapid growth in Export by the central and western China remained; export by eastern China saw ups and downs. From January to July, the growth rates of exports of Shan Xi, Hei Longjiang, Guang Xi, An Hui, Yun Nan, Hu Nan and Shaanxi were 63.4%, 49.6%, 28.3%, 26.9%, 23.5%, 22.1% and 22% respectively, significantly beyond the overall growth rate; Fu Jian, Guang Dong and Zhe Jiang in eastern China maintained a double-digit export growth rate while the growth rate of export by Jiang Su rose only 2.1% and Shanghai dropped 4.2%.

3. Growth of conventional trade was steady and processing trade saw an evident growth. Import and export by general trade from January to July was US$1.23124 trillion, up by 7.1%. Among that, exports amounted to US$603.58 billion, up by 9.8%; imports registered US$627.66 billion, rose by 4.7%. Import and export by processing trade was US$759.28 billion, with an increase of 0.9%, among that, export registeredUS$479.24 billion, down by 1.3% while import amounted to US$280.05 billion, up by 4.7%.

4. Exports of mechanic and electronic products and exports of labor-intensive products enjoyed good momentum. Our exports of mechanic and electronic products from January to July registered US$711.37 billion, up by 9.7%, accounting for 57.4% of China's total exports over the same period. Total export of clothing, textiles, footwear, furniture, plastic products, bags and suitcases and toys was US$253.15 billion and rose by 11.9%, accounting for 20.4% of China’s total exports.

5. Import volumes of most energy and resource products increased. Among that, import volumes of iron ores, product oil, plastics of primary forms were 460 million tons, 24.85 million tons and 13.68 million tons, respectively growing by 8%, 6.6% and 4.2% year-on-year; import volumes of beans and steel were 34.69 million tons and 8.01 million tons, down by 0.7% and 1.3% year-on-year.

III. Foreign investment

From January to July of 2013, 12,626 foreign-invested enterprises were newly approved, down by 7.68% year on year; realized FDI reached US$71.392 billion, up by 7.09% year on year. In July, realized FDI amounted to US$94.08 billion, up by 24.13% year on year (excluding data of banking, securities and insurance). The main features of foreign investment in January-July are as follows:

1. Realized FDI in agriculture, forestry, animal husbandry, and fishery sectors and service sector kept growing. From January to July, Realized FDI in agriculture, forestry, animal husbandry, and fishery sectors reached US$105.6 million, up by 6.83% year on year, accounting for 1.48% of the national total. Realized FDI in manufacturing sector reached US$29.396 billion, down by 2.42% year on year, taking up 41.18% of the national total. Among that, Oil processing and coking and nuclear fuel processing industry, papermaking and paper products industry and the ferrous metal smelting and rolling processing industry were up by a large margin of 330.6%, 38.18% and 36.71% respectively. Realized FDI in service sector registered US$35.643 billion, up by 15.78% year and year, taking up 49.93% of the national total. Among that, Electrical machinery repair industry, culture and arts industry and Radio, film and television industry increased by a large margin of 271.34%, 198.45% and 154.15% respectively.

2. Investments by ten countries/regions in Asia increased by large margin. From January to July, realized FDI from ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea) amounted to US$61.7836 billion, up by 7.74% year on year. Among that, realized FDI from Hong Kong reached US$45.989 billion, up by 9.76% year on year; that from Japan, US$5.181 billion, up by 9.57% year on year; that from South Korea, US$2.167 billion, up by 55.21% year on year; that from Thailand, US$ 46.9 million, up by 612.75% year on year. Realized FDI from USA amounted to US$2.184 billion, up by 11.44% year on year. Realized FDI from the E.U. 27 countries reached US$4.637 billion, up by 16.72% year on year. Among that, realized FDI from Germany registered US$1.516 billion, up by 58.25% year on year. Realized FDI from France registered US$57.7 million, up by 10.09% year on year.

3. Realized FDI in western China enjoyed a rapid growth. From January to July, realized FDI in the eastern China reached US$59.66 billion, up by 4.7% year on year; Realized FDI in the central China, US$6.08 billion, up 11.8% year on year; Realized FDI in the western China, US$5.66 billion, up 33.0% year on year. In January-July period, the eastern, central, and western China accounted for 83.6%, 8.5% and 7.9% respectively of the national total amount of FDI. (2013-08-23 10:28:01)

IV. Investment and economic cooperation overseas

Direct investment overseas. From January to July, Chinese investors had directly invested in 3,275 overseas companies in 156 countries and regions, and total direct investment in non-financial sectors (similarly hereinafter) reached US$50.6 billion, up by 20% year on year.

From January to July, investments in seven economies of Hong Kong, ASEAN, EU, Australia, US, Russia and Japan reached US$35.7 billion, taking up 71% of the total overseas direct investments over the same period of time, up by 76% year on year. Investment in Hong Kong and Japan dropped by 5.3% and 11.5% respectively; while Chinese investments in US, Australia, EU, ASEAN and Russia grew dramatically by 278%, 78%, 74%, 33% and 21% respectively.

From January to July, direct investments overseas by enterprises of local governments reached US$16.18 billion, up by 26.2% year on year, taking up 32% of the total overseas direct investments over the same period. Top 3 are Guang Dong, Shan Dong and Bei Jing.

Almost 90% of the investments flew to commercial service industry, mining industry, wholesale and retail industry, construction industry and manufacturing industry. Investments to commercial service industry and manufacturing industry are dropped respectively, while investments to other industries saw a strong growth. Among that, investments to construction industry, scientific research and technical service industry, and mining industry enjoy a multiple high-speed growth, reached 32 billion, 0.8 billion and 14.7billion respectively, up by 532%, 147% and 130% .

Contracted projects overseas. From January to July, the accomplished turnover of China's contracted projects overseas amounted to US$66.2 billion, up by 13% year on year, and value of newly-signed contracts was US$92.2 billion, up by 23% year on year. The new projects each with a contract value above US$50 million numbered 373 (with 272 over the same period of last year), amounting to US$72.9 billion, accounting for 79% of the total value of new contacts. Among that, the projects each with a contract value above US$100 million numbered 225, an increase of 62 over the same period of last year.

By the end of July 2013, total contract value of the projects overseas reached US$1.0904 trillion with the realized turnover of US$721.8 billion.

Labor service cooperation overseas. From January to July, labor service personnel sent abroad reached 269 thousand, with an increase of 20 thousand over the same period of last year. Among that, labor service personnel sent abroad for contracted projects reached 153 thousand and that for labor cooperation projects numbered 116 thousand. By the end of July, all personnel sent overseas totaled 887 thousand, an increase of 35 thousand over the same period of last year. By the end of July 2013, total amount of labor service personnel sent abroad reached 6.66 million. (2013-08-23 10:32:18)

V. China’s trade and economic cooperation with Russia, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan

Cooperation with Russia. Economic and trade cooperation is an important basis for China-Russia All-round Strategic Partnership. Great achievements have been made in China-Russia economic and trade cooperation in recent years. China – Russia trade volume of reached US$88.16 billion in 2012 and China has become Russia’s first largest trade partner for three consecutive years; investment cooperation saw a rapid growth and China’s direct non-financial
investment in Russia accumulated to US$4.42 billion , with an average annual growth of more than 40% in recent ten years; large projects in energy, nuclear power, aeronautics, astronautics, science, transportation and communications got fully enhanced and local economic and trade cooperation enjoyed vigorous development among two countries. Besides the improvement of bilateral economic and trade cooperation, China and Russia also worked together and played a constructive role in regional economic cooperation and global economic governance. Both sides have coordinated with each other in G20, BRICs and APEC to preserve common interest and make great contributions to the prosperity of Asia and Europe as well as the steady development of world economy.

Cooperation with Kazakhstan. China and Kazakhstan enjoy good momentum in economic and trade relations. The trade volume of China and Kazakhstan reached US$25.68 billion in 2012, hitting a historic high. China is Kazakhstan’s first largest trading partner and, Kazakhstan is China’s first largest trading partner in Middle Asia. And the bilateral trade volume came to US$13.57 billion in the first half of this year, up by 23.1% year on year. At present growth rate, the goal proposed by leaders from the two countries that trade volume in 2015 will reach US$40 billion is expected to come true. China’s statistics shows that by June in 2013, China’s investment in Kazakhstan has reached US$19.43 billion. China’s large cooperative projects on oil & gas pipeline, uranium ore development, electrolytic aluminum plant, and Sino-Kazakh Huoerguosi International Frontier cooperation Center get on well and the cooperation in areas like finance, transportation, customs and quality control is deepened, which has brought much convenience to bilateral economic and trade cooperation.

Cooperation with Turkmenistan. China enjoys overall good economic and trade relations with Turkmenistan. Statistics by China side shows that bilateral trade volume came to US$10.37 billion in 2012, almost doubled that of 2011. China has become Turkmenistan’s first largest trade partner. From January to June, 2013, trade volume between the two countries reached US$5.16 billion, up by 4.9%. China- Turkmenistan gas pipeline was completed on December, 2009. Turkmenistan’s export of gas to China saw an increase year by year and China has become Turkmenistan’s largest exporting market of gas. Meanwhile, bilateral economic and technology cooperation is also rising steadily. By June 2013, our investment in Turkmenistan reached nearly US$3.3 billion and the turnover of contracted projects came to US$6.13 billion. The two countries have positively carried on cooperation on transportation, communication, textile, railway equipment, municipal and infrastructure construction, and finance and enjoyed good prospect for economic and trade cooperation. (2013-08-23 10:33:54)

Cooperation with Kyrgyzstan. China and Kyrgyzstan enjoy good economic and trade relations. The trade volume between
China and Kyrgyzstan in 2012 came to US$5.16 billion, up by 3.7% year on year. Kyrgyzstan is China’s fifth largest trade partner among CIS countries. Statistics by Kyrgyzstan shows that China has been Kyrgyzstan’s second largest trade partner for four consecutive years. The trade volume between China and Kyrgyzstan accounted for 17.5% of the total foreign trade of Kyrgyzstan. From January to June, 2013, the bilateral trade volume reached US$2.23 billion, up by 3.9% year on year and still maintained a rapid growth. China’s direct investment in Kyrgyzstan is expanding. By the end of June 2013, China’s investment in Kyrgyzstan was nearly US$790 million, up by 3.9% as compared with the same period in last year. Kyrgyzstan’s data shows that China was Kyrgyzstan’s second largest investor in 2012 and China’s investment accounted for 22% of the total FDI in Kyrgyzstan in that year. The bilateral economic and technology cooperation have also made great achievements. Cooperation on transportation, electricity, mineral resources exploitation and telecommunication have gone on well and played a very important role in the improvement of Kyrgyzstan’s economy and people’s livelihood.

Cooperation with Uzbekistan. China maintains good economic and trade relations with Uzbekistan. According to statistics by China, bilateral trade volume came to US$2.87 billion in 2012, up by 32.8% and accounting for 12.3% of Uzbekistan’s total trade volume. From January to June 2013, the bilateral trade volume came to US$2.125 billion, up by 53.5%. China is Uzbekistan’s second largest trade partner and first largest destination of cotton exports. By the end of June2013, China’s investment in Uzbekistan is more than US$500 million and the total turnover of contracted project was US$3.099 billion. Domestic enterprises carried on a series of key projects in Uzbekistan. Cooperation on energy, transportation, communication, electromechanical areas prove to be the highlights of deepening the bilateral economic relations of the two countries.

VI. The 9th China Foodstuff Expo

In order to promote food production and marketing, and promote food consumption, Ministry of Commerce will co-host the 9th China Foodstuff Expo with Sichuan Provincial People’s Government in Chengdu from September 15 to September 18, 2013.

China Food Expo has done eight times since 2004. The 9th China Foodstuff Expo covers an exhibition area of 80 thousand square meters and is made up of 12 exhibition districts: Brandname Foodstuff, International brandname Foodstuff, Local Foodstuff, Sichuan Food, Drinks, Meat, Food Procession and Package, Tea, Condiments and Ingredients, Edible Oil, Functional Food and International Food Festival.

The 9th China Foodstuff Expo carried out the guideline of central government to practice strict economy and combat waste, to simplify ceremonial activities and innovate in the contents. First, China International Food Industry Development and Investment/ Finance Forum are conducted to explain food distribution and investment/finance policies, analyze the present situation of food industry as well as its development trend. Second, Submit meetings for food dealers and serial production & sales matching meetings are run to serve as a platform for the food suppliers and dealers to communicate so as to promote the food trade. Third, China International Food Industry Supply Chain Management Forum is held to discuss hot issues like supply chain informationization and food security management. Fourth, we carry on food nutrition exhibition and public lectures to popularize the food nutrition and health so as to lead the way for a scientific and healthy foodstuff consumption.

VII. Minister Gao Hucheng Attends East Asia Trade and Economic Ministerial Conferences

East Asia Trade and Economic Ministerial Serial Conferences were held in Bandar Seri Begawan, the capital of Brunei from August 19 to 21. Commerce Minister Gao Hucheng led Chinese delegation to attend Regional Com-prehensive Economic Partnership (RCEP), East Asia Trade and Economic Ministerial Conference, ASEAN-China-Japan-South Korea Trade and Economic Ministerial Conference and the East Asia Summit Trade and Economic Ministerial Conference. I’d like to share with you here Minister Gao Hucheng’s speech and opinions in the conferences.

Mentioning China-ASEAN trade and economic cooperation, Minister Gao Hucheng said that it is ten-year anniversary for China-ASEAN strategic partnership this year. In the past ten years, China and ASEAN countries have deepened mutual trust and made impressive achievements in trade and economic cooperation. China-ASEAN FTA goes on smoothly and negotiations for RCEP are officially launched. Bilateral trade and investment grow rapidly, interexchange and cooperation goes on smoothly and Pan-Beibu Gulf Economic Cooperation Roadmap is about to complete. China-ASEAN cooperation does not enhance the economic and social development in both sides but also contribute much to the local peace, stability and prosperity.

Mentioning negotiations on RCEP, Minister Gao Hucheng said that great progress made in core issues like the model of market access schedule while differences exist. China would like to go with other members to positively deal with the difficulties and discrepancies in negotiations according to the actual conditions in open, equal and reciprocal principles, and create conditions for realization of the concensus reached by all the country leaders that the negotiations will be completed in 2015 as planned.

Regarding China-ASEAN FTA, Minister Gao Hucheng said that China-ASEAN trade and economic relations have entered into a stage of overall and multi-level development since it was launched ten years ago. Ten years ago, the FTA was in a relatively low level and the level of trade and investment liberalization and facilitation was not high enough to satisfy the rapid development of bilateral trade and economic relations. Meanwhile, the coverage and contents of the then FTA regulated can not satisfy the new trend and demand of modern economic globalization and regional integration any more. In modern historic conditions, how to raise the level of China-ASEAN FTA and make an “upgraded” FTA has become a top issue for both sides. Chinese government would like to, with great sincerity, discuss with ASEAN countries on the upgrading of FTA, collect different opinions on relevant issues and respect the advice and suggestions ASEAN countries proposed. In words, China would like to widen the mutual benefits by the way of upgrading China-ASEAN FTA with great sincerity, build concensus with ASEAN countries and make China-ASEAN FTA a solid foundation for China-ASEAN strategic partnership.

Regarding the MC9, or the nineth ministerial conference, Minister Gao Hucheng said that MC9 is an important meeting in multilateral trade system development history. It has great influence on Doha Round negotiation and prospect of the multilateral trade system. Each part should endeavor to act closely and flexibly, make early harvest, and work out a roadmap for the completion of Doha Round Negotiations. Doha Round is a developmental round and its developing members’ attentions should be paid properly. China would like to make efforts with other parts and make contributions to the success of MC9.

That’s all. Now I’ll take your questions.

[CCTV]: Recently, many people were concerned about the high price of imported cars. Since the Administrative and Implementation Measures for Automobile Brand Sales were implemented in 2005, many manufacturers of the imported automobiles began to set up exclusive distributors to manipulate imported car price in order to gain windfall profits.. Some people believe that the Measures need to be revised to adapt to the current situation. How do you comment on it? Regarding China (Shanghai) Pilot Free Trade Zone (Shanghai FTZ), which will be established on the basis of the comprehensive bonded zone, what kind of breakthroughs will the Shanghai FTZ have in terms of functions? Some Hong Kong media reported that the Shanghai FTZ, once established, would bring a negative impact on Hong Kong’s trade and foreign investment. Could you give some comments? Thank you!

[Shen Danyang]: I’ll answer the questions relating to China (Shanghai)Free Trade Zone first. China (Shanghai) Pilot Free Trade Zoneis an upgrade of the four zones under special customs supervision, including the Shanghai Waigaoqiao Bonded Zone, which was officially approved by the State Council. China (Shanghai) Pilot Free Trade Zone will continue to explore ways to promote development, reform and innovation through wider opening-up, and gain replicable experience to serve nation-wide development. It aims at breakthroughs in deepening the reform, accelerating the transformation of government functions, widening the opening up in services industry, innovating new investment management models, and establishing a supervision system compatible with the Free Trade Zone, etc. Since the implementation of the plan relating to China (Shanghai) Free Trade Zone requires the adjustment of relevant laws and regulations, the State Council has submitted it to the Standing Committee of the National People’s Congress. The overall plan will be released after the completion of relevant legal procedures.

China (Shanghai) Pilot Free Trade Zone benchmarks international practices with a view to accumulating experience for the whole country in terms of deepening reform and opening up. I do not think it is necessary to worry about the negative influence it may have on trade and investment in Hong Kong.

Regarding the Administrative and Implementation Measures for Automobile Brand Sales and the question about the price of automobiles, I will answer it briefly. The Ministry of Commerce, National Development and Reform Commission and State Administration for Industry and Commerce jointly issued the Administrative and Implementation Measures for Automobile Brand Sales in 2005 with a view to promoting uniform operation model for authorized automobile brand. It not only gives the automobile suppliers the rights to set up a sales network and authorize automobile sales, but also requires them to be responsible for network maintenance, management and training, and particularly product quality. It aims to regulate domestic automobile brand sales, strengthen the operators’ commitment to services, clarify duties and responsibilities, improve accountability and defend the lawful rights and interests of consumers. Generally speaking, these Measures have played a positive role in accelerating automobile brand development, improving automobile sales and service quality, adapting to China’s opening-up drive in automobile distribution, and expanding automotive consumption.

Meanwhile, we have also noticed that according to the media, some automobile suppliers did not go on well with brand dealers recently. They forced dealers to adopt the particular operation model, charged guarantee deposit for store opening, and forced dealers to overstock or make tie-in sales. As more families began to own cars, more complaints were lodged. It is therefore necessary to work with relevant ministries to revise the Administrative and Implementation Measures for Automobile Brand Sales. At present, we are proactively studying the ways to revise the Measures. First and foremost, we must put consumers’ legitimate rights and interests first when it comes to further specifying relevant provisions and further standardizing business behavior. Second, we aim at putting necessary restrictions on suppliers when it comes to store-opening guarantee deposit, overstocking and tie-in sales, strive to build a stable supplier-dealer relationship, guide the establishment of an efficient automobile distribution network, and promote the sound development of automobile brand sale.

As for the dominant market position of automobile suppliers and their role in controlling price, it depends on the actual situation. Although the Anti-monopoly Law does not prohibit the dominant market position formed naturally or through fair competition, it does ban operators from abusing the dominant position to eliminate or restrict competition. Moreover, it is forbidden by law that suppliers and dealers reach agreement to sell at a fixed wholesale price or limit the lowest wholesale price. Therefore, the automobile suppliers will be punishable by law if they are identified with the above illicit behaviors.

[China National Radio]: I have two questions. First, the cross-border electronic commerce is a new trend in China’s foreign trade development today. It is said that in the first half of this year over 100 thousand parcels were dispatched overseas on a daily basis from Yiwu of Zhejiang province. So what measures will MOFCOM take to support cross-border electronic commerce going forward? Second, the high temperature and drought in southern China since the beginning of July has brought a sharp rise in the price of vegetables. What is MOFCOM’s view on this? Will the price keep rising? What measures has MOFCOM adopted to keep market supply stable? Thank you.

[Shen Danyang]: I’ll answer the second question first. The recent high temperature in the south and frequent floods in both the south and north has brought great inconvenience to people’s daily life, major losses to human life and property, and a negative impact on market supply. MOFCO attaches great attention to it. We have timely launched the emergency mechanism, while ministers held meetings, deployed work, made field trips in person, and put in place some prompt measures.. As for the price of vegetables, MOFCOM has primarily taken measures to satisfy market demand through increasing market supply, strengthening monitoring, and making timely allocation and transfer of the vegetables. Meanwhile, we have supported local governments to strengthen market monitoring, crack down on illegal and unreasonable forcing up of prices. By now, either in cities with high temperature in the south or cities suffering from floods, market supply overall is rather stable.

Cross-border e-commerce has been a topic of frequent discussions and has grabbed much media attention lately. Cross-border e-commerce in a general sense refers a new form of trade whereby a producing and trading company or a person conducts traditional product display, business negotiation and conclusion of a business in a digital and electronic way by means of e-commerce. At present, China’s cross-border e-commerce is mainly divided into two trade models: business to business (B2B) and business to consumers (B2C). In a B2B model, businesses mainly advertise and release information online through e-commerce, whilst the closing of the deal and customs clearance are done offline. By nature, it still belongs to traditional trade and is classified under general trade by the Customs. In a B2C model, domestic enterprises directly face foreign consumers, while the main products sold are personal consumer goods. Logistics take the forms of air mail, post and express delivery; postal or courier services serve as the customs agent while most of trade is not included in the Customs registration. So this is what you just referred to. Cross-border e-commerce develops rapidly in Yiwu. As far as we are concerned, around 150 thousand packages were sent from Yiwu on a daily basis in the first half of the year. Yiwu is the largest small commodity market in the world and its products are sold to the rest of the world. Either the goods go by air mail, post or express delivery, they are all done by cross-border e-commerce. At present, most of this e-commerce is not included in the Customs statistics.

Cross-border e-commerce is a new model of foreign trade development. It is also an efficient way for businesses to expand their overseas marketing channels, raise China’s brand competitiveness, and realize China’s foreign trade upgrade and transformation. MOFCOM believes that cross-border e-commerce should receive more support, which is why a few years before we had already begun to promote its development. For example, we selected on merit AliExpress, Dhgate, Made-in-China and Trade2CN as the third party e-commerce platforms for foreign trade recommended by MOFCOM; we worked out a document to clarify concrete guiding opinions on enhancing e-commerce platform’s function to serve foreign trade, improving business utilization of e-commerce platforms in doing foreign trade, and reinforcing supportive policies for the utilization of e-commerce platforms in developing foreign trade. All these measures have seen initial effects. The turnover of cross-border e-commerce reached around 1.6 trillion RMB in 2011,and approximately 2 trillion RMB in 2012. The size of trade has been growing very rapidly.

Recently, the General Office ofthe State Council issued Several Opinions on Promoting Import and Export, Stabilizing Growth and Adjusting Structures, demanding research efforts to find ways to resolve difficulties in goods export by e-commerce so as to enhance the development of cross-order e-commerce. At the moment, besides the present supporting measures, the Ministry of Commerce is working with relevant departments to issue concrete policy measures to promote trade by cross-order e-commerce as soon as possible. The measures are of various kinds and mainly consist of: standardizing the trading system (in the past there were the conventional forms of general trade, processing trade and border trade; while cross-border e-commerce is not yet included in the customs statistics); formulating trade standards (Trade standards need to be set up for cross-border e-commerce to define what trade is cross-border e-commerce. Standards at home and abroad need both be considered); strengthening payment (How to ensure that the trade by cross-border e-commerce pays online in a quick and safe way? That’s a very important question); implementing cross-border logistics (Nowadays, a large volume of goods are exported by cross-border e-commerce. How can we deliver them? What can we do on logistics? Some is done by logistics companies overseas and can we go out to establish our own ones? It also needs support to study) and tax refund (since cross-border e-commerce is not listed among trade means and companies could not get tax refund, so it also needs to be solved). Many problems like this need to be resolved. We are working with relevant departments to try to propose the solutions as soon as possible. Thank you for your questions!

[Global Times]: Statistics show that from January to July, the value of China-Japan bilateral trade dropped by 8.8%. How many consecutive months did the value of China-Japan trade drop for? What’s the reason of the continued decline? Moreover, China-EU bilateral trade value declined by 1.8%. What’s the reason? Was it directly related to the friction of China-EU photovoltaic product trade? Thank you.

[Shen Danyang]: The main reason for the decline of China-EU trade is the gloomy economy of the EU. The EU has not completely pulled through the economic crisis. Not only did the value of China-EU trade drop, but those of other economies with the EU declined. While in the month of July, our export to the EU grew by 5%. In the month of July, trade values of several markets were dropped at first, but now, they are growing, with that of Japan being the only exception. Since the beginning of this year, the growth of China-Japan trade has been weak. In the first seven months, the total China-Japan trade was valued at US$17.40 billion, down by 8.8% year-on-year. Of that, China’s export to Japan reached US$ 83.19 billion, down by 3.5%. China’s import from Japan reached US$90.81 billion, down by 13.2% year-on-year. China-Japan trade has been in decline for many consecutive months, which is result of a combination of factors.

According to our recent analysis, the factors are mainly threefold:

Firstly, as an important part of the global value chain, China-Japan trade has been affected by the global economic trend. Because of market doldrums in the US and EU. China’s exports to these markets have gone down, resulting in the reduction in China’s import of related raw materials, components and parts from Japan.

Secondly, the Sino-Japanese trade has also been impacted by the devaluation of the yen. Since the end of 2012, Japanese yen has devalued dramatically, leading to the relative rise in the price of China’s products exported to Japan, which has impacted Chinese export to Japan.

Thirdly, the main players in China-Japan economic activities are the businesses and people of the two countries. The wrong words and deeds of Japanese government and some politicians have severely hurt the feelings of Chinese people, and dampened the enthusiasm of part of Chinese consumers to purchase Japanese products. When it comes to trade, Japanese export to China, such as cars, household appliances and components and parts, has declined.

Scale and level of China-Japan trade and economic relations that we see today is the result of years’ joint efforts by the two countries. It is hard-earned and needs careful maintenance from both sides. We hope that Japan will cooperate with China, properly handle related issues between the two countries, and create favorable conditions for the development of China-Japan trade and economic relations.

China Business Times: I have two questions: First, the Ministry of Commerce has always put priorities on promoting services trade. Could you brief on the development of services trade in the first half of 2013? The second question, there is a saying that the price undertaking reached by China and the EU recently will have a great impact on SMEs, what’s your comment on it? Thank you. (2013-08-23 11:25:43)

Shen Danyang: China-EU solar panel dispute reached a price undertaking through negotiations between the two sides A deal was reached. It will have an impact on all Chinese enterprises, be it large or small. As regards the exact size of the impact, or whether it is the SMEs that have taken the brunt, one can only determine based on statistics. For that I advise you to contact CCCME. Generally speaking, the impact will be less for those companies that joined in the negotiations and signed on the price undertaking agreement. On the contrary, those that did not join in the price undertaking, like an enterprise in Dezhou, Shandong, it is difficult to join the price undertaking now. Furthermore, it is not sure either if it can get certain share. If the SMEs did not join the price undertaking, they will definitely bear more of an impact.

In terms of services trade, China’s trade in services has maintained a steady and rapid development momentum since this year. China's services trade volume in the first half of 2013 reached US$ 247.2 billion, up by 13.7%, of which exports posted US$ 96.1 billion, and imports registered US$ 151.1 billion, up by 6.3% and 19% year on year respectively. Judging from the running of trade in services in the first half, there was not a fundamental change in trade structure, and traditional services trade maintained a relatively high proportion. Transportation services and tourism accounted for 59.4% in total imports and exports of services trade. In breakdown, the imports and exports of tourism totaled US$ 82.8 billion, and transportation services scored US$64.1 billion, up by 24.5% and 7.2% year on year respectively; imports and exports of construction services were US$ 6.5 billion, down by 14.5%. To further adjust and optimize the structure of China's services trade will be a priority of future work.

It is gratifying that some of the emerging services trade has developed rapidly in the first half of 2013 with high growth rates. For example, exports of such high value-added services as financial services and consulting services achieved rapid growth in the first half of 2013. Exports of financial services and consulting services rose by 120% and 16.6% year on year respectively. Imports of financial services, computing and information services and communication services were up by 16.6%, 150% and 16.7% year on year respectively. Thank you. (2013-08-23 11:26:01)

Phoenix TV: I have a question about foreign trade. The figures were released some time ago. Trade statistics for July are unexpectedly positive. People have drawn different conclusions from their analyses. Some think that it was just an interlude, while others say the turnaround will settle in slowly but steadily., What’s MOFCOM’s opinion? Moreover, do you think the annual target of 8% will be reached? Thank you. (2013-08-23 11:28:51)

Shen Danyang: I just briefed on statistics of imports and exports for July. In fact, the Chinese Customs released the statistics a few weeks ago, with a significant rebound in both import and export growth, which was largely due to the trade facilitation measures and a series of macro-economic policies promulgated by the State Council. On the one hand, the initiative of exporters was enhanced by the policy measures, and export growth boosted. Although many enterprises still faced difficulties, the enthusiasm of enterprises for exports increased. On the other hand, domestic demand was restored, and import growth rebounded. For example, imports of such commodities as crude oil, iron ore and steel were up by 17.8%, 17.4% and 9.2% respectively in July.

In short, according to our analysis, the pick-up in export growth in July is mainly due to the trade facilitation policy measures and a series of macroeconomic policies promulgated by the State Council. Besides, there are three other contributors.

First, exports and processing trade imports closely linked with export demand have improved as the world economy recovers. China’s exports to the US, the EU and ASEAN saw significant growth in July. Notably, with the EU, despite months of negative growth, China’s exports growth was in the black for July. Although export growth with the EU had been falling for the year up to July, export growth rose by 5% in July. Imports of processing trade were up by 5.3% year-on-year, which was a new development, since for quite some time, whereas general trade increased, processing trade imports were dropping. Processing trade imports grew by 5.3% year-on-year and 17.4% month-on-month in July.

Second, the conditions for importers and exporters have improved. For example, the RMB exchange rate against the U.S. dollar remained stable in July, while depreciating slightly against the euro and the yen by 1.7% and 0.6% respectively, reversing the situation of continuous RMB appreciation since the beginning of 2013, stabilizing enterprises’ expectations, enhancing exporters’ confidence, and improving trade environment. (Of course, other factors such as the policy environment and the promulgation of trade facilitation measures also played a part.)

Third, the base figure for the same period of 2012 was relatively low. China's imports and exports were up by only 2.6% in July 2012, of which exports rose by only 1%. In contrast, the base of imports and exports in July 2013 is relatively high.

As for the target of 8% for trade growth in 2013, it is just a predictive working target, instead of a task outlined in the government work report of the National People's Congress. China’s import and export growth is expected to stabilize in the second half of 2013 as overseas demand is on a steady increase, and a series of policy measures to promote trade facilitation promulgated by the State Council are being implemented gradually. Judging from the information that has come to hand, imports and exports in August are likely to maintain a relatively good development momentum.

We should also be aware that the current recovery of world economy is weak, with many uncertainties, and that China’s foreign trade development is still faced with many risks and challenges. MOFCOM will pay close attention to the shifts in trend and make efforts to implement the policies, so as to meet the target of 2013. Thank you. (2013-08-23 11:29:08)

Xinhua News Agency: China's foreign capital absorption has seen a growth of over 20% for two consecutive months since June. What are the reasons behind this? Why is there such a huge boost as compared to the single-digit growth of a few months ago? Thank you. (2013-08-23 11:31:44)

Shen Danyang: One of the reasons behind the boost in utilized foreign capital year-on-year in June and July is that funds of some foreign-invested enterprises with relatively large amount of investment were put in place over the past two months. Another factor is related to foreign investment fluctuations and the low base of capital absorption over the same period of 2012. A more important factor is that foreign capital has continued to grow since 2013. There has been positive growth till now for 2013 except one month, which is a consistent trend that runs through the year, including the latest two months, reflecting foreign investors’ confidence in China's investment environment, especially investment opportunities in the services sector. (The growth in foreign investment is mainly concentrated in the services sector). This is further evidence of the competitiveness of China's investment environment.

Of course, short-term fluctuations in foreign investment are normal. Statistical changes in one or two months are not enough to reflect the overall trend. It is not safe to say that foreign investment will keep growing at such a high rate in the coming months. Thank you. (2013-08-23 11:32:02)

International Business Daily: China-Russia trade growth declined in the first half of 2013. What is the reason? What's China’s plan to promote China-Russia economic and trade cooperation in 2013? Thank you. (2013-08-23 11:35:31)

Shen Danyang: I’ve just briefed on China-Russia economic and trade cooperation. On the whole, the picture is positive. China-Russia trade volume saw a slight decline in the first half of 2013 year-on-year, which is mainly due to such factors as weak global economic growth and slack demand. According to the statistics of the Chinese Customs, China-Russia bilateral trade fell by 3.9% year-on-year in the first quarter, and the decline of bilateral trade gradually narrowed with the economic development policy of the two countries coming into effect. Bilateral trade reached US$ 51 billion in the first seven months of 2013, on par with that of the same period of 2012. In other words, while there was a negative growth in the first half of 2013 with the sharp decline of the first quarter, it caught up in July and reached the parity. Meanwhile, bilateral investment has maintained a sound momentum of development. Chinese investment in Russia from January to July reached US$ 246 million, up by 20.6% year-on-year. We believe that as long as the two sides continue to tap potential for cooperation, and give play to their own comparative advantages, they will be able to reverse the trend of declining trade as soon as possible, and achieve positive growth by the end of 2013.

At present, China and Russia are working together to implement three new measures to further promote bilateral trade and economic cooperation:

First, efforts are made to expand the imports and exports of mechanical and electrical products and high value-added products on the basis of maintaining the growth of commodities trade, so as to achieve positive growth of bilateral trade in 2013.

Second, localities and enterprises of the two countries are promoted to join in the development of the Far East Area of Russia, large-scale infrastructure and special economic zones through relevant financing platforms, so as to enhance bilateral investment cooperation.

Third, in-depth integration of high-tech and strategic emerging industries between the two countries is encouraged through bilateral cooperation mechanisms for economic modernization; bilateral cooperation in large projects such as nuclear power, aviation, aerospace and information technology is pushed forward, and new growth spots for bilateral economic and trade cooperation fostered. Thank you. (2013-08-23 11:35:48)

Ta Kung Pao: Bilateral trade between the Mainland and Hong Kong rose by over 30% from January to July 2013. What is the reason? Is there any change in the contents of bilateral trade? ( 2013-08-23 11:38:09 )

Shen Danyang: I have briefed on the rapid growth of trade between the Mainland and Hong Kong in the first quarter and April and May, and have analyzed the reason and certain anomalies, which I will not repeat. The current trade growth is relatively normal. Trade with Hong Kong will continue to maintain a relatively fast growth, but will not grow as fast as a few months ago. Thank you. (2013-08-23 11:38:55)

China Daily: You just talked about the investigation initiated by the National Development and Reform Commission against the automobile industry, on top of the pharmaceutical industry and the LCD panel industry. Do the anti-monopoly investigations have any adverse impact on foreign investment in China? What’s your comment on that? (2013-08-23 11:40:30)

Shen Danyang: The statistics I just briefed on showed that foreign-invested enterprises, including Japanese enterprises, still have confidence in China's investment environment. A survey released recently shows that over 70 % of Japanese enterprises are confident in investing in China. Regarding the investigations initiated by relevant Chinese government department against the enterprises breaking the law, I would like to say that the Chinese government treated all enterprises equally in the process of establishing a sound market economy system, and that any enterprises should abide by the law, while any behavior in violation of the law should be subject to legal sanctions, and bear corresponding legal responsibilities.

Foreign-invested enterprises have become an important part of China’s national economy since the reform and opening up implemented for over 30 years, playing an important role in China’s economic and social development. We believe that most foreign-invested enterprises operate in accordance with the law. We welcome investors from all countries to invest in China, and will protect the legitimate interests of foreign-invested enterprises and foreign investors according to law, in an effort to foster an open and transparent legal environment, a convenient and efficient administrative environment and a level playing-field for all enterprises. I have repeated these remarks on many occasions, and I repeat it today once again. Thank you. (2013-08-23 11:40:53)

Shen Danyang: That concludes today's press conference. Thank you. (2013-08-23 11:45:56)

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