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Regualr Press Conference of the Ministry of Commerce on November 19, 2013

Dear friends from the Press,
Welcome to the Press Conferencetoday. Nice to meet you again.I am going to make a briefing on China’s commercial performance in January to October of 2013, and answer your questions.

I. Commercial performance in domestic market

At present, consumer market keeps a steady upward trend. According to statistics by NBS, retail sales of consumer goods in January-October amounted to 19.0308 trillion Yuan, up by 13% year-on-year, 0.1 percentage points higher than that of the first three quarters of 2013. The nominal growth rate of October was 13.3%, and the actual growth was 11.2%, price fluctuation excluded, the same as that of September. Sales by 3,000 key enterprises monitored by MOFCOMrose by 8.9%, 0.3 percentage points lower than that of previous month. The main features of consumer market in August are as follows:

1. Online sales were thriving. According to statistics, in the third quarter, the transaction scale of online shopping reached 454.76 billion RMB, up by 42.4% year-on-year. According to the monitoring of MOFCOM, in October, the sales byDepartment Store and Supermarket grew by 8.9% and 8% respectively, 1.3 and 1.0 percentage points lower than that of September respectively.

2. Sales of household articles and means of transportation picked up. In October, among the 3000 key enterprises monitored by MOFCOM, the growth rate of sales of household appliances, furniture and communication equipment were respectively 0.4, 1.1 and 2.5 percentage points higher than that of September. And that of food, clothing and gold, silver and jewelry were 0.6, 2.2 and 2 percentage points lower respectively than that of September. According to the statistics by China Automotive Industry Association, sales of automobiles grew by 20.3%, record high in the last 20 months.

3. Catering consumption slowed down. In October, the income of catering grew by 9.5%, 4.5 percentage points lower than that of the same period of last year, and the amplitude ratio was 0.3 percentage points lower than that of last month. Affected by the fall of High-end consumption and group consumption, the income of catering enterprises above designated size fell by 0.6%, and the decreasing amplitude was 0.7 percentage points lower than that of September.

4. Urban consumption kept steady. In October, urban consumption grew by 13.1%, the same as that of last month, but 1.4 percentage points lower than that of the same period of last year. Rural consumption grew by 14.6 year-on-year, 0.2 percentage points lower than that of last month and the same period of last year respectively.

5. Consumer prices remained stable. Consumer price in October was up by 3.2% year-on-year, 0.1 percentage points higher than that of last month. Consumer price in January-October was up by 2.6%, 0.1 percentage points lower than that of the same period of last year. According to monitoring by MOFCOM, in 36 medium and large sized cities in October, price of agro-foodstuff was up by6.8% year-on-year, of which prices of vegetable, beef and mutton were up by 40.7%, 19.3% and 15.6% respectively year-on-year. While prices of soy-bean oil and chicken was down by 4.1% and 0.5% respectively year-on-year.

II. Foreign Trade

According to Customs statistics, our total import and export in the first ten months of 2013 were 21.16 trillion Yuan (US$3.4trillion), up by 7.6% year-on-year, exchange rate fluctuation excluded (same as below). Among that, exports amounted to11.2 trillion Yuan (US$1.8trillion), up by 7.8%; and imports amounted to9.96 trillion Yuan (US$1.6trillion), up by 7.3%. Trade surplus was1.25 trillion Yuan (US$200.46billion) with an increase of 12%. The main features of foreign trade in the first ten months are as follows:

1. Trade with EU, U.S. and ASEAN was up. In January-October, China-EU, China-U.S. and China-ASEAN trade rose by 0.5%, 6.9% and 10.9% respectively; among that in October, export to EU was up by 12.6%, and to U.S. up by 8.6%, 7 and 3 percentage points higher respectively than the national export growth; trade with ASEAN was up by 10.8%, 0.6 percentage points higher than that of last month. In January-October, trade with Hong Kong was up by 22.1%. In the same period, trade with Japan was down by 7.0%, but in October, trade with Japan was up by 5.2%, keeping growing in two consecutive months.

2. Export and import by eastern China steadily grew, and export by middle and western China grew rapidly. In January-October, the total volume of export and import in eastern China amounted to US$2.9436 trillion, up by 6.8%, taking up 86.6% of the total volume in the whole country. For export, the growth rates of exports of Ningxia, Qinghai, Yunnan and Heilongjiang was 66.9%, 61.5%, 37.6%and 32.3%respectively, higher than national growth rate.

3. Growth of conventional trade was steady and processing trade slowed down. In January-October, import and export by general trade was US$1.79635 trillion, up by 8.5%, accounting for 52.8% of the total volume of export and import. Among that in October, export by general trade was US$ 91.3 billion, up by 11.9; and import by general trade was US$88.8 billion, up by 18.5%, 4 percentage points higher than that of last month, hit a new record high since March 2012. In the same period, import and export by processing trade was US$1103.37 billion, with an increase of 0.5%, taking up 32.5%.

4. Exports of mechanic and electronic products steadily grew, and exports of labor-intensive products enjoyed good momentum. In January-October, our exports of mechanic and electronic products registered US$1029.3 billion, up by 7.6%, accounting for 57.2% of China's total exports over the same period. Export of high-tech products was US$535.37 billion, up by 11.8%. Over the same period, Total export of textiles, clothing,footwear, toys, furniture and plastic products was US$377.85 billion and rose by 10.0%, 2.2 percentage points higher than the overall growth rate over the same period. In October, Total export of seven labor-intensive products was US$ 39.8 billion, up by 7.3%, 4.4 percentage points higher than that of last month.

5. Import ofmajor energy and resource products decreased. Among that, import volumes ofiron ores was 0.67 billion tons, up by 10.1%; and the average price of import was US$ 12.91, down by 2.3%; import volumes ofcoal was 0.26 billion tons, up by 17.3%; and the average price of import was US$ 89.8, down by 13.1%; import volumes of crude oil was 0.23 billion tons, up by 3.4%; and the average price of import was US$777.9, down by 4.8%; besides, import of mechanic and electronic products and high-tech product was US$ 692.16 billion and US$ 460.55 billion, up by 8.3% and 12.5% respectively.

III. Foreign investment in China

From January to October of 2013, 18,184 foreign-invested enterprises were newly approved, down by 9.18% year-on-year; utilized FDI reached US$ 97.026 billion, up by 5.77% year-on-year, and have kept rising for 9 consecutive months. In October, utilized FDI amounted to US$8.416 billion, up by 1.24% year-on-year (excluding data of banking, securities and insurance). The main features of foreign investment in January-October are as follows:

1. Utilized FDI in service sector kept a relative fast growth. From January to October, utilized FDI in service sector registered US$ 49.812 billion, up by 13.93% year-on-year, accounting for 51.34% of the national total; electrical machinery repair and culture and arts industry saw a relatively fast growth, up by 321.48% and 222.27% respectively.Utilized FDI in agriculture, forestry, animal husbandry, and fishery amounted to US$1.425 billion, down by 2.61% year-on-year, accounting for 1.47% of the national total. Utilized FDI in manufacturing sector was US$ 38.292 billion, down by 5.25% year-on-year, accounting for 39.47%, of which utilized FDI in crude oil processing, coking and nuclear fuel processing, aquatic product processing and architectural ceramics grew rapidly, up by 83.77%, 67.35% and 21.39% year-on-year respectively.

2. FDI by ten countries/regions in Asia, EU and US grew fast. From January to October, utilized FDI from ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and ROK) amounted to US$ 83.63 billion, up by 7.18% year-on-year; among that, utilized FDI from Hong Kong reached US$ 63.46 billion, up by 10.49% year-on-year; that from Japan, US$ 6.463 billion, up by 6.31% year-on-year;that from ROK, US$2.601 billion, up by 3.41% year-on-year; that from Thailand, US$47.8billion, up by 489.46%. Utilized FDI from US amounted to US$ 3.039 billion, up by 12.41% year-on-year, and that from 28 EU countries reached US$ 6.402 billion, up by 22.26% year-on-year; among that, utilized FDI from Germany registered US$1.913 billion, up by 49.6% year-on-year; and that fromNetherlands registered US$ 1.183billion, up by 17.13% year-on-year.

3. Utilized FDI in Central China maintained a fast growth. It was US$ 81.41 billion in January-October, up by 6.0% year-on-year; utilized FDI in Central China was US$ 8.55 billion, up by 9.9% year-on-year; and utilized FDI in Western China was US$ 7.07 billion, down by 1.1% year-on-year. Utilized FDI in Eastern China, Central China and Western China accounted for 83.9%, 8.8% and 7.3% of the national total respectively.

IV. China’s Investment and economic cooperation overseas

Direct investment overseas. From January to October 2013, Chinese investors made direct investment in 4,173 overseas companies in 156 countries and regions, and total direct investment in non-financial sectors (similarly hereinafter) reached US$ 69.5 billion, up by 20% year-on-year.

From January to October, Chinese investment in seven economies of Hong Kong, ASEAN, EU, Australia, US, Russia and Japan reached US$ 48.9 billion, taking up 70% of China’s total overseas direct investments over the same period of time, up by 7% year-on-year. Investment in Hong Kong and Japan fell by 13.2% and 37.3% respectively; while investments in Russia,US, EU and Australiasoared by 858%, 227%, 92.4% and 94% respectively,and investment in ASEAN grew by25%.

From January to October, Chinese direct investment overseas by enterprises of local governments reached US$ 24.34 billion, up by 23.4% year-on-year, taking up 35% of the national total, and 3.9 percentage points higher as compared with that of national growth. Top 3 are Guangdong, Shandong and Jiangsu.

Almost 90% of the investment flew to commercial service industry, mining industry, wholesale and retail industry, manufacturing industry and construction industry. Investments to commercial service industry are dropped, while investments to other industries saw a strong growth. Among that, investment to mining industry, wholesale and retail industry, manufacturing industry, construction industry, transportation, storage and postal industry, real estate industry and scientific research and technical service industry reached US$ 16.8 billion, US$ 10.1 billion, US$ 7.3 billion, US$ 5.1 billion, US$ 1.9 billion, US$ 1.7 billionand US$ 1.1 billion respectively, up by 99%, 47%, 56%, 426%, 54%, 95% and 146% respectively.

Contracted projects overseas. In the first ten months of 2013, the turnover of China’scontracted projects overseas amounted to US$ 97.3 billion, up by 12% year-on-year, and value of newly-signed contracts was US$ 124.6 billion, up by 12% year-on-year. The projects each with a contract value above US$50 million were 480 (403 in the same period of 2012), with a total value of US$ 99.4 billion, accounting for 80% of the total value of newly-signed contracts. Among that, the projects each with a contract value above US$100 million were 283, 52more than that of the same period of 2012.

By the end of October 2013, the total contract value of China’s contracted projects overseas reached US$1.1228 trillion with theturnover of US$ 752.9 billion.

Labor service cooperation overseas. In January-October, labor service personneldispatched overseas reached 388 thousand, an increase of 35 thousand over the same period of 2012. Among that, labors sent abroad for contracted projects were 223 thousand and that for labor cooperation projects were 165 thousand. By the end of October, all labors sent overseas totaled 903 thousand, an increase of 23 thousand over the same period of 2012. Labor servicepersonnel overseas by the end of October 2013 were 6,780 thousand.

V.Trade in Service in the First Three Quarters

The total volume of trade in service from January to September, 2013 amounted to US$390.5 billion, up by 13.4% year on year. Among that, export was US$146.4 billion, up by 6.8% year on year; import was US$244.1 billion, up by 17.8%; deficit came to US$97.7 billion with a year-on-year growth of 39.4%. The service trade maintains a rapid growth except for construction service and communication service. Trade volume of transportation and tourism were more than half of the total volume of trade in service, accounting for 58.3%.Among that, the total import and export of transportation service was US$98.5 billion, up by 6.4% year on year; that of tourism was US$129.3 billion, up by 14.5%. Tourism and transportation service got a e deficit of US$58.3 billion and US$41.7 billion respectively and were the main source of China’s trade deficit in trade in service. Service Export of insurance, consulting in high added value service and the royalties and license fees maintained a rapid growth, up by 21.7%, 19.9% and 16.7% respectively. Import of computer and information services enjoyed a significant growth, up by 53.6%.(2013-11-19 10:38:23)

VI. Africa- China Goods, Technology and Services Exhibition

Ministry of Commerce will hold Africa-China Goods, Technology and Services Exhibition and China-Ethiopia Industrial and Commercial Cooperation Forum in Addis Ababa, the capital of Ethiopia, from December 5 to 7, 2013. This aims to implement relevant requirements of China-Africa Cooperation Forum, build up a platform for China-Africa cooperation, implement the consensus on deepening comprehensive partnership reached by the country leaders of both China and Ethiopia and enhance the cooperation in industrial and commercial circles between China and Ethiopia.

So far, more than 120 enterprises from Guangdong, Fujian, Hunan and Shandong Provinces have confirmed to attend the exhibition and nearly 200 booths have been reserved. The exhibits cover small farm implements, engineering and mining machinery, power equipment, auto parts, hardware and building materials, light consumer goods, home appliances and consumer electronics, etc. (2013-11-19 10:39:22)

VII. China-EU Bilateral Economic and Trade Cooperation since 2013

Trade volume between China and EU from January to October, 2013 are US$456.1 billion, up by 0.5%. Among that, China’s exports are US$275.9 billion, down by 0.7%; imports are US$180.2 billion, up by 2.4%; China’s trade surplus come to US$95.7 billion, down by 5.19%.

By October, 2013, EU’s directly invested projects in China have come to 37869, with an actual input of US$90.29 billion. Among that, the number of newly built enterprises in 2012 that are directly invested by EU is 1605, down by 3.6% year on year; the actual input is US$5.35 billion with a year-on-year growth of 1.6%. In the first ten months of this year, the number of newly built enterprises directly invested by 28 countries from EU is 1216, down by 14.37% year on year. The actual input comes to US$6.403 billion, up by 22.26% year on year. From January to October 2013, China’s non-financial direct investment is US$3.04 billion, up by 92.4%.

By September 2013, China has introduced 44907 new technologies with an accumulated value of US$169.98 billion. From January to September 2013, 2658 technologies have been imported from Europe and the value came to US$10.78 billion. (2013-11-19 10:41:19)

Shen Danyang: That’s all about the economic situation from January to October 2013 and some major events. Now, I’ll take your questions. (2013-11-19 10:43:32)

Shen Danyang: Thats all about the state of commerce operation and activities from January to October. Now I’ll take your questions.

CCTV: The Nov.11 Shopping Day this year attracted wide attention from media at home and abroad. American media reported that, the sales volume of China’s Nov.11 Shopping Day this year exceeded that of Black Friday and Cyber Monday, two American big shopping days. Has the Ministry of Commerce been informed about the sales picture?

Shen Danyang: Since the year of 2009, every year’s Nov.11 has been a marketing bright spot for on-line retail, with ever-higher trade volume year on year. This year was no exception. The Nov.11this year became a sales promotion day for e-commerce. Apart from Taobao and Tmall, e-commerce platforms like Jingdong, Suning, Amazon (China), Gome and Dangdang also joined the promotion.

Unfortunately, the Ministry of Commerce has not got hold of authoritative and comprehensive statistics on the sales volume. Having said that, some indirect data revealed by relevant departments and organizations could still reflect the overall situation of e-commerce and on-line shopping this year, \which could assist MOFCOM’s research and decision-making as useful reference. For example, according to the figures published by the State Post Bureau, the volume of express delivery on Nov.11 reached 180 million; data provided by Jingdong showed that sales of Jingdong’s self-run section on Nov. 11 was RMB 3.5 billion from 7 million orders, and both figures were up by over 300% year on year.

Besides, put together, figures show that,on Nov. 11, the gross turnover of Alipay reached RMB 35 billion, up by 83% year on year and overtaking last year’s RMB 19 billion in just13 hours.

Aside form basic sales figures, MOFCOM pays more attention to the highlighted trends and potential problems of China’s online retail market. According to the information that has come to hand, there were 4 features in China’s e-commerce sales Nov. 11,,which might become the trend in further development.

1. The promotion scale was further expanded. The number of on-line retail enterprises that took part in the promotion increased, which included not only comprehensive B2C enterprises, but also vertical B2C enterprises, extending from on-line markets to off-line stores. Merchandise categories were further enriched, involving not only physical commodities, but also services and virtual commodities.

2. Marketing was expanded with the help of mobile platforms. Many e-commerce enterprises expanded their marketing through wireless platforms. According to the statistics of relevant e-commerce platforms, turnover of mobile Taobao in 8 hours was over USD 2 billion, double that of last year. 51buy took Wechat developed by Tencent as the payment platform, and by 4 p.m. on Nov. 11, orders from Wechat reached 40,000, taking up 15% of all orders.

3. On-line business interacted with off-line business. A lot of e-commerce enterprises actively promoted O2O, which allowed consumers to experience and choose products off-line, and order and pay on-line, and then have their goods delivered, installed and tested off-line.

4. Relevant services followed up in assurances. To guarantee the delivery of goods on time, main on-line retail enterprises and logistic enterprises worked out coordination solutions in advance, and relevant departments of local governments strengthened their guidance for express delivery enterprises in service assurances. According to statistics, on Nov. 11 of all express delivery enterprises processed more than 60 million items, double that of last year. Nevertheless, the operation was orderly and standardized.

China Daily: You have just mentioned that there is a meeting between the leaders of China and the EU. We would like to hear your view on the bilateral trade and economic relations between China and the EU at present and in the future. Besides, a few days ago, EU’s Ambassador to China revealed that EU and China are working on a early warning mechanism to identify potential trade disputes in advance in order to avoid escalation into trade wars. Can you verify that? In addition, Premier Li Keqiang is scheduled to visit central and eastern Europe. What’s your expectation of the visit?

Shen Danyang: As regards questions concerning visits of state leaders, please ask the Ministry of Foreign Affairs for information.

As for the first two questions, here is what I have got. Despite the difficulties China and EU have encountered in their trade and economic relations, our bilateral trade and two-way investment have witnessed a good development momentum in recent years. In the first ten months this year, China-EU trade reached USD456.1 billion, up by 0.5% year-on-year, reversing the decline beginning last year. As for investment, in the first ten months, EU investment in China rose by 23% year-on-year, while Chinese investment in EU doubled that of last year. That Chinese companies partnering with European businesses that own advanced technology or well-known brands has become a highlight of China-EU commercial cooperation.

As China-EU trade expands, disputes are inevitable. However, I believe that both sides know that in the context of a deepened globalization, China and EU are becoming more closely intertwined and mutually dependent economically. Resolving disputes through negotiation and dialogue is the right way forward as far as the historical trend is concerning. The successful resolution of the solar panel case demonstrates that China and EU are able, and wise enough, to manage and control trade frictions, and safeguard overall cooperation.

This year is the 10th anniversary of the establishment of the China-EU comprehensive strategic partnership. There have been frequent visits of leaders between the two sides. On October 24, Vice Premier Ma Kai led a delegation to Brussels where he co-chaired the 4th China-EU High-level Economic Dialogue with Reyn, Vice Chairman of European Commission, and De Gucht, the EU’s Trade Commissioner. On November 21, the 16th China-EU Leaders’s Meeting will be held in Beijing. Premier Li Keqiang, President Van Rompuy and President José Manuel Barroso will attend the meeting.

China pays high attention to China-EU trade and economic relations, and views the EU as an important trading and investment partner. China has put forward the goal of building a moderately prosperous society by 2020, while the EU is carrying out “Europe 2020 Strategy” and promoting structural reform. There are much convergence between these two courses, which provides rare historic opportunities for China-EU cooperation. We hope both the two countries could seize the opportunity, deepen cooperation, oppose trade protectionism together and jointly promote the mutual benefit and win-win of China-EU trade and economic cooperation.

As for the establishment of an early warning mechanism as previously mentioned, China and the EU have had some initial discussion on the intention to establish such a mechanism. Before the establishment of such a mechanism, China is willing to strengthen coordination on our positions and align our actions with the EU using existing mechanisms with regard to major bilateral trade frictions, and exchange views and communicate with the EU at an early stage when problems arise, with a view to preventing, mitigating and even eliminating frictions, and creating favorable conditions for the sound development of China-EU trade and economic cooperation.

ATV world: The Decisions approved by Third Plenum of the 18th CPC Central Committee put forward quite a few new spirits regarding stabilizing foreign investment and reforming the examination and approval system for foreign investment. What are the Ministry of Commerce considerations in this respect?

Shen Danyang: It is MOFCOM’s major political task to pass on, study and implement the spirit of the Third Plenum. Following the spirit of the Decisions and the overall deployment by the Central Committee and the State Council, MOFCOM will study and propose concrete opinions and carry out the implementation. As regards the expansion of opening up and investment market access, which you have raised, MOFCOM will in the near term focus on the following 4 aspects:

First, accelerate to unify laws and regulations governing domestic and foreign investment, and maintain the stability, transparency and predicability of investment policies. It is a major measure China undertakes to reform the foreign investment administration regime, which is conductive to establishing a single, fair and transparent investment market access system.

Second, promote the orderly opening up of such services sectors as finance, education, culture and health care, open up such services sectors as nursery and old-age care, architecture design, accounting and auditing, business logistics and e-commerce, and further relax market access restrictions on foreign investment in such general manufacturing sectors as iron and steel, chemicals and automobiles, including restrictions on foreign investment in terms of registered capital, equity ratio and scope of business.

Third, encourage multinational companies to set up such functional bodies as regional headquarters, R&D centers, sourcing centers and financial management centers in China, encourage foreign investment to flow into such public technology service platforms as science and technology intermediaries, innovation incubators, productivity centers and technology trading markets.

Fourth, attach more importance to introducing advanced management experience and high quality talent, make full use of the technology spillover and driver effect of foreign capital. We shall also study and establish a scientific evaluation system for foreign capital utilization, and guide the shift of focus in foreign investment utilization from emphasizing scale to improving quality and comprehensive gains. (2013-11-19 11:13:03)

Xinhua: I remember that you mentioned in the end of October that China and the EU might launch negotiations on a potential bilateral investment agreement at the China-EU Leaders’ Meeting. Will the negotiations be launched on schedule? (2013-11-19 11:14:42)

Shen Danyang: China and the EU reached a consensus at the China-EU High-level Economic Dialogue on October 24 to make efforts to officially announce the launch of China-EU Investment Agreement negotiations at the 16th China-EU Leader’ Meeting this month.

China and EU have established between them a comprehensive strategic partnership. With increasingly close trade and economic exchanges, it is the common interest of both sides to have a high-quality China-EU Investment Agreement. It will not only help promote growth in two-way investment, but also be conductive to a two-day, balanced China-EU trade and economic relationship. China is ready for such a major negotiation. At present, the two sides at working levels are working hard with a view to announcing the launch of investment agreement negotiations at the upcoming China-EU Leaders’ Meeting.

Hong Kong Cable TV: Before the Third Plenum of the 18th CPC Central Committee, many expected that there would be some news on SOE reform. It turned out that this didn’t appear to be the case. I am wondering if there is a contradiction when on the one hand China is to maintain the dominant position of state-owned enterprises, and on the other hand it is suggesting to further open up the market. How to you strike a balance between the two? Furthermore, are there any difficulties in the course of SOE reform? What should be the future direction for development of SOEs?

Financial Times: I would like to ask about MOFCOM’s comment on a Chinese workers' strike taking place recently at the Cooper Chengshan Tire Company, a Sino-US joint venture in Rongcheng, Shandong, after the workers learned hat the US side intended to sell the company to Apollo Tire, an Indian company. The workers put on the strike in order to boycott the acquisition. They blocked the entry of the American manager into the company premise. We are wondering if the strike was legal? What’s MOFCOM’s comment on it?

Shen Danyang: The two issues are not directly related to MOFCOM’s responsibility. A lot has been covered in the Decisions of the Third Plenum concerning SOE reform. I personally believe that it is a strong reform effort. On SOE reform, I suggest you ask the competent authorities.

As for the strike, first I do not have the information about it. I suggest you ask relevant local authorities and competent departments for the information. Thank you for your two questions. (2013-11-19 11:16:19)

China Consumer Journal: I would like to ask about the promotions of online stores on November 11th. I have noticed in addition to the promotions by online stores on November 11th, many brick-and-mortar stores also had promotions. Does MOFCOM have any information and statistics on this? In addition, how does MOFCOM see the substantive impact of electronic commerce on traditional retail? (2013-11-19 11:21:23)

Shen Danyang: I just mentioned the impressive sales performance by online retailers. However, we should not over look large traditional retailing businesses. Some large-scale traditional retailers have rolled out promotions at the opportunity of the November 11th promotions by online retailers. Their promotions took place earlier, offered deeper price cuts, and covered more new products. In doing so, these retailers gave better play of the advantages of brick-and-mortar stores in terms of a stronger customer experience, more direct services and more choices for consumers, which in turn promoted sales for these stores. According to the monitoring of MOFCOM on 500 key retailers nationwide in the first ten days of November, average daily sales of home appliances, and gold and silver jewelries went up by 11.1% and 7.4 % respectively as compared with those in the last ten days of October. This suggests that sales growth in traditional retailing businesses were also very good.

Although retail sales on November 11th in 2013 did have a strong impact on traditional retailing, more traditional businesses adapted themselves to the changes this year. A number of shopping malls were willing to be the "fitting room" (Many customers would try on clothes first in physical stores, and then buy them online. Some traditional retailers were willing to be the "fitting room"), providing new ideas to accelerate the transformation and upgrading of traditional retail businesses and their expansion into the Internet. Traditional retailers have followed the trend by changing their attitude toward the Internet economy from impact, resistance and rivalry in the past to gradual integration at present.

We believe that the online selling and brick-and-mortar selling each have their own features and advantages. Whatever the business type, firms win recognition from the market and consumers as long as they follow consumer trends and ensure product quality, improve service levels and play fair. We encourage all types of retail business to leverage their respective advantages, make service innovations, reduce cost, and provide real benefits to consumers, so as to jointly promote the healthy development of the consumer market. ( 2013-11-19 11:21:52 )

China Securities Journal: Australian Industry Minister Ian Macfarlane said in China Mining Congress 2013 that the China-Australia Free Trade Agreement is expected to be signed in the first half of 2014. What is your comment on it? How is the progress of China-Australia FTA negotiations? ( 2013-11-19 11:23:11 )

Shen Danyang: The China-Australia FTA negotiations were launched in 2005. So far, 19 rounds of negotiations have been held in the past eight years. Although there is much difference between the two sides in such areas as investment, agriculture and services, the two sides have always been trying to find ways to take the negotiations forward.

Since the Australian Coalition government came into power in September 2013, a number of leaders including Prime Minister Abbott have spoken positively about the China-Australia FTA negotiations. We have also noted the recent remarks of the Australian Industry Minister Ian Macfarlane. China highly appreciates the positive stance of the Australian side.

According to the arrangement, Australian Minister for Trade and Investment Robb is going to visit China soon, and hold talks with Minister of Commerce Gao Hucheng. Minister Robb will introduce new ideas of the new Australian government on the negotiations. We look forward Mr. Robb's visit. China is ready to work with the Australian side to meet each other halfway, with a view to concluding the negotiations and signing the agreement as soon as possible on the basis of mutual benefit and the balance of interests. (2013-11-19 11:23:30 )

Phoenix Satellite TV: We are keen to ask about export since in October China’s export registered an increase bucking the downward trend of the month before. What’s the reason for the rebound? Besides, since year-end is around the corner, could you analyze the overall export performance of this year?

Shen Danyang: Statistics released by the Customs a few days ago show that export growth in October rebounded. I think there’re two main reasons for that. First, policies released by the State Council not long ago to maintain the import and export growth have begun to take effect; second, the global economy has showed signs of recovery recently. In October, China’s exports to US, EU and ASEAN grew considerably while export to Japan also recovered.

According to the leading economic indicators, however, pressure from a weak external demand, rising overall cost and fierce international competition still remains unmitigated in the course of trade development. Situation facing import and export is still rather grim. For example, at 114th Canton Fair that was closed recently, the number of exhibitors and business visitors totaled at 189,600, down by 6.5% compared with that of the Canton Fair in spring 2013, and almost roughly the same as that of Canton Fair in the autumn of 2012. As a result of the continued appreciation of the Chinese Yuan and the rising cost of labor force, companies’ confidence in accepting orders has been waning, while the value of export orders placed at this Fair only reached USD31.69 billion, down by 10.9% from that of Canton Fair 2013 (Spring), and by 3% from that of Canton Fair 2012 (Autumn). Of all the orders placed, short-term orders of 6 months or less accounted for as high as 83.8%, while long-term orders of six months or more accounted for only 16.2%.

Therefore, we reckon that foreign trade still faces sustained, multi-dimensional difficulties in the coming two months or even longer time. The reasons are mainly threefold:

First, the recovery of external demand is still not a certainty. World Economic Outlook, which was released by IMF on October 8, lowered 2013 global growth rate forecast to 2.9% from 3.1%, the sixth consecutive downward adjustment so far. World Bank lowered on October 7 the economic growth projection for developing countries in East Asia from 7.8% to 7.1% for this year, and from 7.6% to 7.2% for next year. WTO also lowered 2013 global trade growth projection to 2.5% and lowered that of next year to 4.5%.

Second, overall domestic costs keep rising and causing troubles for export companies. On one hand, the appreciation of Chinese Yuan squeezes the profit margin of export companies. From January to September, RMB nominal effective exchange rate appreciated by 6.26% while real effective exchange rate appreciated by 6.63%. The rapid appreciation of RMB has a major impact on the profitability of export companies. On the other hand, the rising cost of labor also exerts great pressure on export companies. The average monthly wages for people in major export-oriented industries along the coastal areas have exceeded RMB3,000, doubling or tripling those for Indonesian and Vietnamese workers. Moreover, small and middle-sized export companies also face difficulties such as the lack of access to financing and high borrowing costs.

Third, increased international competition and accelerated flight of industries and orders to neighboring regions. From January to August 2013, market shares of China’s seven categories of labor-intensive exports to US and Japan were 46.8% and 66.4% respectively, down by 0.7 and 1.7 percentage points respectively. The decline in the US market entered into the third consecutive year. Market share in the EU market was 42.9% (from January to July), down by 1.8 percentage points. There is also rising pressure from emerging markets and developing countries as they speed up the development of export-oriented industries.

Besides, the higher base of last year, especially the base in December, would also affect the growth rate of import and export this year. I have talked much on the current situation and difficulties, how about the forecast for the whole year? As for this question, many experts hold that the main tasks for this year, which are to transform the trade growth model and adjust trade structures, are generally attainable. However, it is still rather difficult to achieve an annual growth rate of 8% for foreign trade. Generally speaking, I agree with their view. However, since the trade from January to October has reached a growth rate of 7.6%, which is not far from 8%, I don’t think it is entirely impossible to realize the expected goal of 8% after some hard work and effort.(2013-11-19 11:37:54)

CCTV Chinese International Channel: I have a question on the Third Plenum of 18th Central Committee. This meeting proposes to build an open and unified market with orderly competition, which is the basis for the market to play a decisive role in allocating resources. What measures will MOFCOM put forward in this respect? (2013-11-19 11:41:14)

Shen Danyang: The Third Plenum of 18th Central Committee proposes that to build an open and unified market with orderly competition is the basis to for the market to play a decisive role in the allocation of resources. At present, China’s socialist market economic system has been preliminarily established, although many market barriers still exist in economic activities. For example, some places require trans-regional companies to set up independent juridical entities locally, thus adding burdens to their operation; set up discriminatory charge items, discriminatory price and discriminatory charging standards for products and services coming from outside; abuse the administrative rights to require organizations and individuals to buy only designated products or services; and limit and exclude outside companies from participating in tendering and bidding activities, etc. Such incidents have greatly affected the market to perform a deceive role in allocating resources, curbed the vitality of the market and damaged the legitimate rights and interests of enterprises and consumers.

To solve these problems, MOFCOM, in co-leadership with the State Administration of Taxation, is jointly formulating with other relevant departments a work plan to identify the prominent problems that need to be solved at present, as well as an initial work program, based on the requirement “to eliminate regional blockades, break industrial monopoly and maintain an open, fair market with orderly competition” inscribed in the Plan to Reform and Transform the Functions of State Council Agencies. We will, in accordance with the Decision on Major Issues Concerning Comprehensively Deepening Reforms released in The Third Plenum of the 18th CPC Central Committee, take more pragmatic measures such as improving laws and regulations, setting up an evaluation mechanism and making a sound social supervision, etc. to strive for a long-effect mechanism that could fundamentally solve the prominent problems. (2013-11-19 11:41:32)

International Business Daily: US Department of Commerce announced on 7 November the initiation of anti-dumping investigations into non-oriented electrical steel imported from the Chinese Mainland, the Republic of Korea and Taiwan. It will also simultaneously launch countervailing investigations into the same products from the above countries and region. What is your comment on this? Are there any further measures? (2013-11-19 11:43:07)

Shen Danyang: The US Department of Commerce launched anti-dumping and countervailing investigations into the non-oriented electrical steel imported from China on November 7. China hopes that the US investigatory apparatus could abide by the WTO rules and relevant trade remedy laws, and investigate the case in an open, fair and transparent way. Meanwhile, we noticed that since 19 September the US has launched successively the countervailing investigation on trichloroisocyanuric acid originating in China, and combined investigations of anti-dumping and countervailing on monosodium glutamate, oriented electrical steel and non-oriented electrical steel originated from China. That the US has launched at such a high frequency trade remedy investigations on imports from China in such a short period of time will surely trigger strong responses from China’s industry. MOFCOM pays great attention to this, and reiterates that the US investigation agencies should exercise caution in initiating combined investigations of antidumping and countervailing, based on the larger picture of developing a sound China-US commercial relationship, and avoid subjecting trade remedy investigations to trade protectionism. (2013-11-19 11:43:22)

Shen Danyang: That closes the press conference. Thank you! (2013-11-19 11:43:36)

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