Dear friends from the Press,

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

I. Commercial performance in domestic market

Consumer market kept a steady upward trend in first eight months of 2013. According to statistics by NBS, retail sales of consumer goods in January-August amounted to 14.8164 trillion Yuan, up by 12.8% year-on-year, the same as that of the first seven months of 2013. Retail sales of consumer goods in August saw a nominal increase of 13.4%, 0.2 percentage points higher as compared with that of July and of the same period of 2012. The main features of consumer market in August are as follows:

1. Rural and urban Consumption kept growing fast. Statistics by NBS showed that consumption in rural areas rose by 15.1% year-on-year, and consumption in urban areas rose by 13.1%, 0.7 and 0.6 percentage points higher than that of July respectively. Consumption in rural areas is stable, 2percentage points higher as compared with that of urban area.

2. Consumption in catering saw a slight growth. According to statistics by NBS, revenue from catering in August rose by 9.7% year-on-year, hitting a new peak. Revenue from large-scale catering showed a narrowing down sliding. Revenue of catering enterprises above designated size was down by 0.5% year-on-year, 1.6 percentage points lower than that of July.

3. Sales by large and medium enterprises remained steady. According to statistics by NBS, retail sales of consumer goods by enterprises above designated size in August rose by 11.5% year-on-year, 0.3 percentage points higher than that of the last month. Retail sales of 3,000 key enterprises monitored by MOFCOM rose by 9.7%, 0.2 percentage points lower as compared with that of July.

4. Sales of home appliances grew fast. The growth rates of sales in home appliances and building materials among 3,000 key retailers monitored by MOFCOM are 12 and 0.3 percentage points higher than that of last month respectively. And the growth rate of sales of communication equipment and gold, silver and jewelries are 3 and 10.4 percentage points lower.

5. Consumer prices maintained steadily. The statistics showed that the consumer price in August saw an increase of 2.6%, 0.5% higher as compared with the last month. The consumer price in the first eight months increased by 2.5%, 0.2 percentage points lower as compared with the same period of last year. Recently, flood in Northeast and drought in the South affected the production and transportation of agricultural products such as vegetables. According to monitoring by MOFCOM in 36 medium and large sized cities in August, price of agro-foodstuff kept an increase of 5.6% year on year and 1.3% compared with that of the last month. Among that, prices of pork and vegetable saw an increase of 8.3% and 4.6% respectively and the average retail price of eggs increased by 2/5% year on year.

II. Foreign Trade

According to Customs statistics, total value of our import and export from January to August were of 16.87 trillion Yuan (US$2.70431 trillion), up by 8.3% year-on-year, exchange rate fluctuation excluded (same as below). Among that, exports amounted to 8.92 trillion Yuan (US$1.42926trillion), up by 9.2%; and imports amounted to 7.96 trillion Yuan (US$1.27505trillion), up by 7.3%. Trade surplus was 962.78 billion Yuan (US$154.21billion) with an increase of 28.2%. The main features of foreign trade from January to August are as follows:

1. Trade with U.S. and ASEAN was steadily up, and trade with EU and Japan down. China-U.S. trade from January to August rose 6.6%, and China-ASEAN trade was up by 12.5%. China-EU trade dropped 1.1%, and China-Japan trade dropped 8.5%. Mainland China-HK trade and Mainland China-Taiwan trade rose 30.0% and 27.4% respectively.

2. Rapid growth in Export by the central and western China remained; export by eastern China saw ups and downs. From January to August, the growth rates of exports of Shan Xi, Hei Longjiang, Guang Xi, Shaanxi, Hu Nanwere 40.8%, 40.3%, 34.8%, 26.9% and 25.2%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 2.5% and Shanghai dropped 3.4%.

3. Growth of conventional trade was steady and processing trade saw a fast growth in the imports. Import and export by general trade from January to August was US$1.4235 trillion, up by 7.8%.Among that, exports amounted to US$701.01 billion, up by 9.9%; imports registered US$722.50 billion, rose by 5.9%. Import and export by processing trade was US$873.54 billion, up by 0.9%, among which, export registered US$552.22 billion, down by 0.8% while import amounted to US$321.32.36 billion, up by 4.0%.

4. Exports of mechanic and electronic products as well as exports of the traditional labor-intensive products maintained good momentum. Our exports of mechanic and electronic products from January to August registered US$817.76 billion, up by 9.3%, accounting for 57.2% of China's total exports over the same period. Exports of hi-tech products amounted to US$426.63 billion, rose by 15.2%. Total export of clothing, textiles, footwear, furniture, plastic products, bags and suitcases and toys was US$296.43 billion and rose by 11.5%, accounting for 20.7% 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 530 million tons, 27.42 million tons and 15.83 million tons, respectively growing by 8.3%, 7.4% and 2.7% year-on-year; import volumes of beans were 41.05 million tons, up by 4.4% and import of steel was 9.23 million tons, down by 0.9%. Besides, imports volumes of mechanic and electronic products, and the hi-tech products registered US$550.82 billion and US$367.57 billion respectively, up by 10% and 16.5%. (2013-09-17 10:13:40)

III. Foreign investment
From January to August of 2013, 14,480 foreign-invested enterprises were newly approved, down by 8.22% year on year; realized FDI reached US$79.77 billion, up by 6.37% year on year. In August, realized FDI amounted to US$8.377 billion, up by 0.62% year on year (excluding data of banking, securities and insurance). The main features of foreign investment in January-August are as follows:

1. Realized FDI in agriculture, forestry, animal husbandry, and fishery sectors kept rising. From January to August, realized FDI in agriculture, forestry, animal husbandry, and fishery sectors reached US$1.111 billion, up by 1.61% year on year, accounting for 1.39% of the national total. Realized FDI in manufacturing sector was US$32.634 billion, down by 3.27% year on year, accounting for 40.9%; among that, realized FDI in crude oil processing, coking and nuclear fuel processing, aquatic product processing and architectural ceramics grew rapidly, up by 190.52%, 115.45% and 46.44% year on year respectively. Realized FDI in service sector registered US$39.725 billion, up by 13.5% year on year, taking up 49.84% of the national total; among that, realized FDI in electrical machinery repair, entertainment services and radio, film and television industry rose by a large margin of 229.92%, 194.54% and 180.66% respectively.

2. Realized FDI from ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea), EU and UAS grew fast. From January to August, 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$68.632 billion, up by 7.87% year on year; among that, realized FDI from Hong Kong reached US$51.557 billion, up by 10.29% year on year; that from Japan, US$5.562 billion, up by 9.45% year on year; that from South Korea, US$2.296 billion, up by 54.89% year on year; that from Thailand, US$472 million, up by 516.94%. Realized FDI from USA amounted to US$2.497 billion, up by 18.04% year on year. Realized FDI from the E.U. 27 countries reached US$5.437 billion, up by 24.27% year on year; among that, realized FDI from Germany registered US$1.741 billion, up by 60.06% year on year; realized FDI from Netherland registered US$892 million, up by 24.81% year on year.

3. Realized FDI in Western China grew relatively fast. Realized FDI in Eastern China was US$ 66.83 billion in January-August, up by 5.0% year-on-year; realized FDI in Central China was US$ 6.93 billion, up by 10.9% year-on-year; and realized FDI in Western China was US$ 6.01 billion, up by 17.7% year-on-year, accounting for 7.5% of the national total. The realized FDI of Central China, Eastern China and Western China accounted for 83.8%, 8.7% and 7.5%of the national total respectively.

IV. Investment and economic cooperation overseas

Direct investment overseas. From January to August 2013, Chinese investors made direct investment in 3,583 overseas companies in 156 countries and regions, and total direct investment in non-financial sectors (similarly hereinafter) reached US$5.65 billion, up by 18.5% year-on-year.

From January to August, investments from mainland China in seven economies of Hong Kong, ASEAN, EU, Australia, US, Russia and Japan reached US$39.11 billion, taking up 69.2% of the total overseas direct investments over the same period of time, up by 3% year-on-year. Chinese investment in Hong Kong and Japan fell by 11.4% and 25% respectively; while investments in US, EU, Australia,Russia and ASEAN soared by 260.3%, 109.3%, 85.1%, 36.4% and 24.2% respectively.

From January to August, direct investments overseas by enterprises of local Chinese governments reached US$18.69 billion, up by 21.6% year-on-year, taking up 33.1% of the total over the same period, 3.1 percentage points higher than that of the national total, and thetop 3 are Guangdong, Shandong and Jiangsu.

Almost 90% of the investments flew to commercial service industry, mining industry, wholesale and retail industry, construction industry and manufacturing industry. Investments to manufacturing industry achieved positive growth (2.1%) for the first time in 2013, investments to commercial service industry fell by 30% over the same period of 2012, 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, reachingUS$ 3.79 billion, US$ 910million and US$ 15.57 billion respectively, up by 457.4%, 145.9% and 122.1% respectively.

Contracted projects overseas. In January-August 2013, the turnover of China's contracted projects overseas amounted to US$ 76.42 billion, up by 11.6% year-on-year, and value of newly-signed contracts was US$ 105.4 billion, up by 25.7% year-on-year. The projects each with a contract value above US$50 million were 409 (306in the same period of 2012), with a total value of US$ 84.12 billion, accounting for 79.8% of the total value of newly-signed contracts. Among that, the projects each with a contract value above US$100 million were 245, an increase of 67 over the same period of 2012.

By the end of August 2013, the total contract value of the projects overseas reached US$1.1036 trillion with the realized turnover of US$ 732 billion.

Labor service cooperation overseas. In January-August 2013, labor service personneldispatched overseas reached 301 thousand, an increase of 19 thousand over the same period of 2012. Among that, labors sent abroad for contracted projects were 171 thousand and that for labor cooperation projects were 130 thousand. By the end of August, all labors sent overseas totaled 895 thousand, an increase of 36 thousand over the same period of 2012. Labor servicepersonnel overseas by the end of August 2013 were 6,690 thousand. (2013-09-17 10:21:40)

Shen Danyang: Now I’ll take your questions. (2013-09-17 10:24:20)

CBN: According to the statistics released by the Chinese Customs, China’s foreign trade in August showed the best performance over the past five months. What is the reason? And how do you see China’s foreign trade in the next quarter? Thank you. (2013-09-17 10:41:52)

Shen Danyang: The statistics released by the Customs and the information I just briefed about show that China's import and export growth continued to improve in August. Exports in August rose by 7.2% year-on-year, 2.1 percentage points faster than that of July; imports in August grew by 7% year-on-year. Although lower than the growth rate of 10.9% in July, it still shows a relatively good momentum for growth. There are two main reasons for the sustained rise in import and export:

Firstly, the government has promulgated a series of policy measures to maintain growth and adjust structures. On July 26, the General Office of the State Council issued the “Opinions on Promoting Steady Development and Structure Adjustment of Import and Export”. Relevant departments and local governments have studied to formulate specific measures to fully implement the Opinions. For example, MOFCOM has canceled the Automatic Import Licensing Administration on 130 Customs coded products, which is conductive to the expansion of financial tax. AQSIQ has canceled export commodity inspection on 1,507 Customs coded general industrial products from August 15, which was a good policy enterprises had been calling for. The Ministry of Finance and AQSIQ have implemented the policy to waiver the export inspection fees of the last five months of 2013. The People's Bank of China, the Chinese Customs, State Administration of Taxation and China Export and Credit Insurance Corporation also have issued trade facilitation measures on foreign exchange , customs clearance, taxation and insurance. In addition, local governments in Jiangsu, Fujian and Guangdong have made policy innovations, and promulgated supporting measures to promote the steady growth of foreign trade and structural adjustment. These policy measures were well received by foreign trade enterprises because they alleviated enterprises’ burden, enhanced their competitiveness, and shored up the confidence of enterprises to expand export.

Secondly, domestic economy stabilized and began to improve, while domestic demand recovered and international market and trading environment improved. In August, China 's manufacturing purchasing managers index was 51%, which is record high for the past year; import index was 50.0%, up by 1.6 percentage points from the previous month. In August, imports of crude oil, iron ore and steel products rose by 15.4 %, 10.5 % and 16.5% year-on-year respectively. The rising demand in the international market, especially the strengthened market demand in developed economies, also contributed to the continued growth of China's export.

As for foreign trade of the whole year,, China still faces great pressure when it comes to its import and export, given that the slow world economic growth has not changed fundamentally, especially that the financial market volatility in emerging economies has increased (for example, the weak demand, currency devaluation and increasing import tax in some emerging markets have caused certain impact on China's export of automobiles, with the export volume and export value of China's automobiles falling by 24% and 15.6% respectively in July). Therefore, China still faces great pressure on import and export. Nevertheless, we believe that with the acceleration of economic recovery in developed economies and the transformation and upgrading of China's foreign trade, as well as China’s policies of foreign trade promotion, China’s import and export are expected to see a steady growth in the following months of 2013. We are confident to achieve the goal of import and export growth of 2013 through further efforts. (2013-09-17 10:42:31)

Economic Daily: I have a question on consumption. China's consumption rose by 13.4% in August, which is an encouraging figure, could you analyze the reason? In addition, will the situation of domestic consumption continue to improve in the second half of 2013? Thank you. (2013-09-17 10:44:15)

Shen Danyang: Consumption kept a steady growth in August. The total retail sales of social consumer goods rose by 13.4% year-on-year in August, 0.2 percentage points higher than that of last July and that of the same period of 2012. It is the highest monthly growth rate in 2013. In reviewing the trade growth curve for the first eight months of 2013, we see that overall this year’s trade growth began with a slow growth , then came to stabilize and gradually began to rise. The pace of growth was relatively slow in the first few months, and then stabilized and began to pick up gradually. A number of factors contributed to the record-high domestic consumption growth in August, including mainly the following four: foundation, confidence, measures and hotspots. The foundation of the growth is that the macro-economy has recently presented a good momentum of stabilization and recovery, with rising urban employment, stable general consumer price, and positive changes in leading indicators such as the industrial added value and import and export. These important macro-economic foundations have played a very positive role on consumption growth.With the steady and rapid economic growth and rising employment, consumer confidence increased. The government has promulgated a series of policy measures to promote consumption since the beginning of 2013, such as promoting information consumption, consumption by the elderly, and healthy consumption, which has improved consumption expectation. MOFCOM has made great efforts since the beginning of 2013 to promote commercial enterprises to carry out a series of promotions, creating many hotspots of consumption.

Therefore, the overall situation of consumption in 2013 is positive, and it is clear that the consumer market will get better in the second half of 2013. It is September now, and there is a saying of "golden September and silver October", while the fourth quarter, as a holiday season, is a traditional shopping season. Given the positive macro-economic situation and the policy measures to promote consumption altogether, we expect that there will be a steady growth in household consumption in the coming months, and a momentum of steady acceleration in consumption growth. In the course of the whole year, consumption growth was slow but stable at the beginning of the year, and then rose steadily, and will rise faster in the next few months. (2013-09-17 10:44:31)

China Daily: I have a question on TPP. It is reported by foreign media that the ROK agreed to join the TPP, and has notified China, requesting understanding from China. Will China change its attitude toward the accession of TPP? It is said that China is researching on it, and what is the result? (2013-09-17 10:47:36)

Shen Danyang: We have reiterated on many occasions China’s position on whether to join the TPP. There is no new position or any changes in our attitude. We take an open attitude towards all kind of free trade agreements and regional trade and economic cooperation. This attitude has not changed. Thank you. (2013-09-17 10:48:02)

CCTV: The first question, Premier Li Keqiang talked at China - ASEAN Expo on September 3 and at the opening ceremony of the Summer Davos Forum on September 11 about the idea of building an upgraded version of the China - ASEAN Free Trade Area. What are the specific implications? The second question, it is reported that the China (Shanghai) Pilot Free Trade Zone will be launched formally at the end of September. Is it true? Could you brief on it? Thank you. (2013-09-17 10:50:32)

Shen Danyang: China - ASEAN Free Trade Area has been in operation for a decade. It opened the prelude of economic integration in East Asia, and has promoted the rapid development of the China-ASEAN economic and trade relations. The so-called upgraded version is to update and expand the content and coverage of the China - ASEAN Free Trade Agreement in accordance with the principle of mutual benefits and common development. The two sides, through further reduction of tariffs and non-tariff measures, negotiations on a new wave of services commitments, and substantive liberalization in investment, will explore ways to improve trade and investment liberalization and facilitation and bring the ASEAN Free Trade Area up-to-date, with broader coverage and higher quality.

Going forward China will further listen to and respect the opinions and suggestions of the ASEAN countries. You have asked about specific measures. They will be formulated based on sufficient consultation between China and ASEAN countries. We will keep you updated on any new progress and concrete measures.

As for the China (Shanghai) Pilot Free Trade Zone, the executive meeting of the State Council discussed and approved on July 3 the draft plan of China (Shanghai) Pilot Free Trade Zone in principle. On August 17, the State Council officially approved to establish China (Shanghai) Pilot Free Trade Zone, which consists of four areas under special customs supervision, including Shanghai Waigaoqiao Bonded Zone, Waigaoqiao Bonded Logistics Park, Yangshan Bonded Port and Shanghai Pudong Airport Free Trade Zone, with a total area of 28.78 square kilometers. On August 30, the NPC Standing Committee authorized the State Council to adjust some of the administrative examination and approval items in the China (Shanghai) Pilot FTZ from October 1, 2013.

At present, all preparatory work of the China (Shanghai) Pilot FTZ has progressed well. It will soon be launched officially after the official documents of the State Council to approve the overall plan is released. Thank you. (2013-09-17 10:54:22)

International Business Daily: I have two questions. The first one is about Cross-Straits Agreement on Trade in Services. The Cross-Straits Agreement on Trade in Services signed on June, 21 was reported to be good news turning into bad news, because this Agreement has not been deliberated and voted in Taiwan’s legislature. The media guess that once the Agreement were impeded, the progress of liberalization of cross-straits trade would also be impeded. I want to know your opinions about it. Secondly, the Twelfth Five Year Program has been carried out for over two years. Could you please give us a briefing on the implementation on the part of the Ministry of Commerce? And did the Ministry of Commerce make a mid-term assessment?

Shen Danyang: Firstly, I will make a review of the implementation of the Twelfth Five Year Program. From the year of 2011 to now, the Twelfth Five Year Program has been carried out for two and a half years. Many departments are making mid-term assessments, including the Ministry of Commerce. The Twelfth Five Year Program for Commerce Development put forward many goals for commerce development, such as basic establishment of contemporary circulation system, obvious optimization of foreign trade development structure, remarkable strengthen of foreign investment utilization and promotion of the going global strategy, and proposed 15 leading indicators from 4 aspects: domestic trade, foreign trade, foreign investment absorption and outward investment. Our mid-term assessment is made from the 4 aspects, according to the 15 leading indicators. According to the assessment, except for a few indicators, the main development goals and tasks had been met or achieved beyond expected results. Commercial operation has been generally smooth and steady. The quality and profitability of commercial development have improved remarkably, contributing further to economic and social development.

For example, on domestic trade, the annual growth rate of total retail sales of consumer goods for the previous two years is 15.7%, over the expected goal of 15%. In the first half of this year, the total retail sales of consumer goods grew by 12.7% year-on-year, close to the expected goals. The annual growth rate of sales of main means of production is 17.7%, over the expected goal 16%. In the first half of this year, sales of means of production grew by 11.5% year-on-year, and the growth rate in the second half year is expected to increase. In 2012, the rate of chain operation was 19%, 1.6 percentage rate higher than that of 2010, only 1 percentage rate lower than the ultimate target: a five-year accumulated growth of 2.6 percentage rate, which is over the expectation.

On foreign trade, the annual growth of import and export of the previous two years is 14%, higher than the expected target of 10%. In the first half year of 2013, the total volume of export and import grew by 8.6, a little lower than the annual target. However, on average, it is still higher than the expected target. The growth rate of trade in service of the previous two years is 13.9%, higher than the goal of 11%. The year-on-year growth of the first half of this year is 13.7, still higher. On trade in service, in the previous two years, outsourcing of international services saw an annual growth of 52.6%, 10.6 percentage points higher than the expected annual growth rate. In the first half year of 2013, the volume of outsourcing of international services is USD19.3 billion, up by 39.7% year-on-year, basically reaching the expected goal.

On foreign investment utilization, in the past two and half years, actual utilization of foreign investment reached USD289.7 billion cumulatively, taking up 48.3% of the planned goal, almost a half. In the first half of 2013, the actual utilization of foreign investment of central and western regions accounted for 17.4% of that of the whole country, 2.4 percentage rate higher than that of 2010, which also basically reached the expected goal.

On foreign investment and cooperation, during the two and half years, the turnover of contract foreign projects accounted to USD277.8 billion, which has completed 50% of the planned goal, which was beyond expectation. The export of contract workers reached to 1.193 million cumulatively, while the annual growth rate of the previous two years is 11.6, which is also beyond the expectation of 7%. In the year of 2012, outward direct investment of manufacturing industry accounted for 9.9% of total outward investment by China, 3.1 percentage rates higher than that of 2010, which is close to the goal of the Five Year Program, far beyond the expectation. This is the implementation status of the Twelfth Five Year Program.

On your question concerning the Cross-Straits Agreement on Trade in Services, after the signing of the Agreement on June 21, the mainland made proactive preparation, urged and organized relevant departments to amend relevant regulations and stipulations, to prepare for the implementation of the Agreement. We hope that Taiwan would complete its deliberation process as soon as possible, and take forward the implementation of the Agreement, so that the people of the two sides will benefit from it.

China.org.cn Financial: First question, what do you think are the main reasons behind the slight decline in FDI inflow in August from the previous month? What will it be like in the second half of the year? Second question, it was reported by some foreign media that the BRICS countries are losing their luster. But China is doing well in both foreign trade and FDI. What do you think are the drivers behind China’s sustained high growth? Will it also be affected like the other BRICS countries? Thank you.

Shen Danyang: On your first question, the actual use of FDI in July witnessed a large year-on-year growth, but in August, as you rightly said, the growth rate saw a slight decline, less than 1%. Why? Our analysis shows it is mainly related to the base figure of the same period of last year. In July last year, the actual use of foreign investment was only USD7.58 billion, but it reached USD8.336 billion in August. That is to say, the number of paid-in foreign investment last July is less than that in August. It is the other way round this year. Foreign invested enterprises with large investment plans moved in their capital in July and the paid-in investment for the month reached USD 9.408 billion while the august figure was only USD 8.377 billion. The variation from month to month is not enough to reflect the whole trend of China’s FDI inflow. So in this case, there is no cause for concern.

Since February this year, China’s utilization of foreign investment had been rising for seven consecutive months. From January to August it had grown by 6.37% year-on-year, which is testimony to the competitiveness of China’s economy and foreign investors’postive perception on China’s invest environment. Since last year, affected by the world economy, global cross-border investment has been sluggish. Compared with other economies, China has done reasonably well in its attraction of FDI, which is expected to remain stable in the coming months. Paid-in FDI for the whole year is expected to be higher than last year, although the growth rate is most likely to be moderate. One more thing I’d like to add, when it comes to FDI, instead of focusing on the speed of growth, we have shifted more attention to its quality, structure and the spillover effect on the economy and society.

The second question is on the view that the BRICS have lost their luster. Affected by the world economy and internal economic and social problems, BRICS economies are not doing as well as they used to. Many experts and scholars have studied the reasons. I will not add more comment to that. But to China, its economy has maintained rapid growth. Why? This is a major topic. In my view, it is related, to a large extent, to China’s political and economic systems and a sound basis for development. It is also related to the series of well-targeted macroeconomic policies since this year especially in recent months. Judging from the macroeconomic landscape this year and in recent months in particular, the Chinese economy still enjoys a good momentum. This trend will not change. It will not be affected by the temporary difficulties in other countries or the economic and financial crisis in other developing or BRICS countries. Thank you for your question. (2013-09-17 11:12:26)

Economic Information Daily: We notice that it has been announced on the website of the Ministry of Commerce on September 6 that China and ROK have concluded the FTA negotiation on modalities. ROK has also released the news that agreement has been reached between the two countries to accord zero-tariff treatment to 90% of goods. Is it true? Will the progress of China-ROK FTA negotiations have any impact on the trade between China, Japan and ROK? (2013-09-17 11:15:05)

Shen Danyang: In early September, the seventh round of China-ROK FTA negotiations was held in Weifang, Shandong Province, during which the negotiation on modalities was completed. This is to say that China-ROK FTA negotiations have yielded good preliminary results.

The second question is on the view that the BRICS have lost their luster. Affected by the world economy and internal economic and social problems, BRICS economies are not doing as well as they used to. Many experts and scholars have studied the reasons. I will not add more comment to that. But to China, its economy has maintained rapid growth. Why? This is a major topic. In my view, it is related, to a large extent, to China’s political and economic systems and a sound basis for development. It is also related to the series of well-targeted macroeconomic policies since this year especially in recent months. Judging from the macroeconomic landscape this year and in recent months in particular, the Chinese economy still enjoys a good momentum. This trend will not change. It will not be affected by the temporary difficulties in other countries or the economic and financial crisis in other developing or BRICS countries. Thank you for your question. (2013-09-17 11:12:26)

China-South Korea FTA negotiation follows two steps: negotiation on modalities and on specific offers and requests of the two parties. The two sides have reached agreement on modalities, including the level of liberalization in trade in goods, the scope of the agreement and negotiating principles in various areas, framework and major elements. Based on the modalities the two parties have agreed upon, the number of products liberalized in trade will eventually reach 90% of all tax lines and 85% of total import. The two sides will work to achieve mutually beneficial and fair results through following consultations on specific offers and requests.

The China-South Korea FTA modality negotiations are only the preliminary outcomes of the entire negotiation and provide some reference to the China-Japan-ROK FTA negotiations. However, these two negotiations are different cases. We can not simply duplicate the negotiation modality of one on the other.

Xinhua News Agency: The China International Fair for Investment and Trade (CIFIT) was held in Xiamen a few days ago, on the sideline of which the 2012 Annual Statistical Bulletin of China's foreign direct investment was jointly released by the Ministry of Commerce, the State Administration of Foreign Exchange and the National Bureau of Statistics. The Bulletin shows that China’s outward FDI ranks the third in the world. According to the data released by MOFCOM today, China’s outward FDI grew rapidly in the first eight months of the year. How do you comment on the momentum of China’s outward FDI growth? I notice that the investment in Hong Kong and Japan dropped by 11.4% and 25% respectively in the first eight months. What are the reasons behind that? (2013-09-17 11:27:57)

Shen Danyang: China’s outward investment will continue the momentum of rapid growth, and it is mainly driven by two factors: first, the rapid growth of China’s outward FDI is both motivated by the businesses’ own desire to “go global” and the demand of the international market. Chinese investment is warmly welcomed by countries across the World. At the recent Davos Forum, an under secretary of commerce of the United Stated said that the US welcomes investment from Chinese companies. This is a strong factor---the combination of market demand and businesses’ internal drive. The second important factor is that the Chinese government supports and encourages companies to “go global”. Central and local governments have all rolled out incentive policies, which have played a very positive role. So we are pretty confident about the continued growth in China’s outward investment. Perhaps it will not be long that China’s outward FDI exceeds its FDI inflow.

As you just mentioned, our investment in Hong Kong and Japan went down in the first eight months. There are various reasons behind that. As for the decline of investment in Japan, I have said at previous press conferences that there are both economic and non-economic factors, which are well-known and I don’t want to repeat here. There are multiple reasons behind the decline in Mainland’s investment in Hong Kong. One reason is that in the past many mainland companies’ outward investment was made via Hong Kong. Many companies set up their branches in Hong Kong, leveraging the favorable conditions of free investment and trade in the city to make outward investment. Now with policy adjustments in the Mainland, companies can invest overseas directly instead of through Hong Kong. This is a significant shift. Of course, there are other factors at work as well. We will continue to look carefully into that. (2013-09-17 11:28:31)

People's Daily Overseas Edition: My question is on the extravagant spending of some Mainland investment promotion delegations in Hong Kong. You mentioned at the previous press conference that MOFCOM is regulating business promotion activities nationwide. What are the specific measures that MOFCOM will take to guide and improve business promotion? A follow-up question. We have noticed that there are a large number of exhibitions and fairs recently. Does MOFCOM have any specific measures to regulate and make the exhibitions thriftier? (2013-09-17 11:34:40)

Shen Danyang: In recent years, local governments have followed national policies to carry out investment promotion, which has played a positive role in attracting foreign investment and promoting local economic and social development. But some localities do have the problem of holding too much poorly-organized and extravagant promotion activities, which has been reported by the media.

To further regulate investment promotion activities and prevent irregular behaviors, MOFCOM has directed provincial commerce departments and national-level economic and technical development zones to step up supervision on various business promotion activities to curb the extravagance and falsehood. MOFCOM also asks the economic and trade offices in Hong Kong and Macao SARs and the economic and commercial counselor’s offices in some countries to provide more guidance and supervision on these activities.

You mentioned that the Ministry of Commerce has been holding a number of exhibitions recently, many of which are also for investment promotion. It has taken a host of measures, in co-organizing these events with local governments, to make them thriftier, simpler, more pragmatic and effective. We have held, for example, the China-ASEAN Expo, Asia-Europe Expo, Northeast Asia Expo, Shanghai International Sourcing Fair, China (Dalian) International Garment & Textile Fair, China (Guizhou) International Alcoholic Beverage Expo. September and October are the “golden months” for exhibitions, many of which are co-organized by the Ministry of Commerce. Most of the opening ceremonies and galas are cancelled and the welcome dinner or reception has either been cancelled or simplified. China International Fair for Investment and Trade, China-Asia-Europe Expo and China-Arab States Expo have all streamlined their agenda, with less seminars and more focus on key forums, seminars and business match-making for practical outcomes. Meanwhile, in principle, MOFCOM is represented by only one ministerial official on site and the number of attendants has also been cut down by a large margin. Take the tenth China-ASEAN Expo for example. The closing ceremony was cancelled and the duration was shortened, but more business promotion activities were held. We didn’t seek to release impressive data at press conferences. Another example, the ninth China-Northeast Asia Expo cut the cost by 45% by combining its opening ceremony and the high-level forum. The 17th China International Fair for Investment and Trade saved as much as RMB 6 million by simplifying its opening ceremony.

Going forward, MOFCOM will continue to implement the central committee’s “eight rules” and requirements on fighting against formalism, bureaucratism, hedonism and extravagance. We seek to make fairs and exhibitions less extravagant and more practical and effective. MOFCOM M is also implementing the working plan of the central government and the State Council to lead a nationwide campaign to regulate exhibitions. It will pursue the twin goals of streamlining exhibitions and revitalizing major industries. It will step up its supervision on exhibitions held by party and administrative organs and civil organizations. It will develop a set of rules in the process and encourage the exhibitions to be more specialized and market-based so as to ensure the healthy and orderly development of the exhibition industry. (2013-09-17 11:35:30)

The Beijing News: The US International Trade Comission (ITC) made a preliminary ruling on the 337 investigation into wireless consumer electronic products and modules from China on September 6 and found no infringement by Huawei and ZTE. How does MOFCOM comment on that? My second question, it has been reported recently by some media that Guangdong Province is applying to set up s Free Trade Zone and it may establish an FTA with Hong Kong and Macau. Some sources say that MOFCOM is conducting a study into the proposed Guangdong FTA. Are these reports true? How does MOFCOM comment on that? (2013-09-17 11:37:45)

Shen Danyang: News on FTAs are flying all around these days. Many provinces wish to establish a pilot free trade zone like Shanghai. But so far I know, only the Shanghai Pilot Free Trade Zone has been approved by the State Council and is ready for trial.

We are very glad to see the preliminary ruling made by the US International Trade Commission on the 337 investigation into the wireless consumer electronic products and modules finds in favor of ZTE and Huawei on September 6. Since August, 2011, Huawei and ZTE have been involved in a number of 337 investigations. This is the second ruling that finds no infringement by the two companies. This case demonstrates, at least objectively, the involved companies’ true international competitiveness and also their determination to respond actively and safeguard their own rights and interests.

The number of 337 investigation cases involving products from China has accounted for over 40% of the US’s total cases in a year since 2010. As Chinese companies go international, MOFCOM has been working hard to create a fair trade environment and protect the legitimate rights of Chinese companies. We will continue to provide guidance to Chinese companies involved in 337 investigations and seek favorable ruling outcomes. . (2013-09-17 11:38:04)

Shen Danyang: That concludes the press conference today.

As the Mid-Autumn Festival is just around the corner, on behalf of the Information Office of the Ministry of Commerce, I wish you all a happy Mid-Autumn Festival. Thank you. (2013-09-17 11:38:58)