Dear friends from the media:

Welcome to the Press Conference today. I’m glad to see you again. I will brief you the business performance of August 2015, and answer your questions.

I. Market performance and features

Since the beginning of the year, the domestic consumer market maintained a steady growth. In January-August, the retail sales of consumer goods reached 19.1 trillion yuan, up 10.5% year on year. That of August increased slightly but steadily, up 10.8% year on year, the highest of this year, and 0.3 percentage points higher than that of last month. The actual growth was 10.4% with the prices factors excluded, the same as that of the same period of last year. The main features are as follows:

1. New business types remained a rapid growth. In August, the online sales of the 5,000 major retail enterprises monitored by the Ministry of Commerce was up 38.9% year on year, 7 percentage points higher than that of the same period of last year; the sales of shopping centers covering various business types was up 12.6% year on year, 6.1, 9.2 and 12.7 percentage points higher than that of supermarkets, department stores and special stores. In January-August, the retail sales of online goods was up 35.6%, accounting for 9.8% of the total retail sales of consumer goods, 0.1 percentage points higher than that of January-July.

2. Sales of large enterprise speeded up. In August, the sales of retail enterprises and catering enterprises above the designated size were up 7.9% and 8.9% year on year, 0.7 and 0.8 percentage points higher than that of last month respectively. Sales of retail enterprises and catering enterprises centering on mass consumption that are under the designated size remained steady, up 13.2 and 13.7% year on year respectively, accounting for 54.8% and 73.1% respectively.

3. Personal consumption for goods of upgrading enjoyed a rapid growth. In August, the sale of communication equipments of enterprise above the designated size was up 29% year on year, the highest in the variety; sales of gold, silver and jewelry was up 17.4% year on year, 10.1 percentage points higher than that of the same period of last year. The sales of 4G mobile phones of the 5,000 retail enterprises monitored by the Ministry of Commerce was up over 50%; the growth of sales of gold, silver and jewelry was up 11.8 percentage points year on year; sales of goods for culture, sports and entertainment were up 14.5% and 11.4%, higher than that of the same period of last year by 8.2 and 6.1 percentage points respectively.

4. Expenditure on upgrading household consumer goods was exuberant. In August, the sales of building materials and furniture of enterprises above the designated size were up 20.7% and 16.1% respectively, 2.8 and 0.1 percentage points higher than last month; sales of household appliances and automobiles were up 14% and 5.2% respectively, 6 and 2.7 percentage points higher than last month. Sale of intelligent household products was hot. In January-August, the sales of Ultra Clear 4K TV, First-Grade Energy-Consumption Refrigerator and First-Grade Energy-Consumption air conditioner were up 18.1%, 15.8% and 4.5% respectively, 12.8, 11.2 and 11.7 percentage points higher than that of common TV, Refrigerator and air conditioner. Besides, the sale of new-energy automobiles grew rapidly. According to China Association of Automobile Manufacturers, the sale of new energy automobiles in August was up 3.5 times year on year, and 2.7 times year on year in total.

5. The consumer price picked up gently. In August, CPI was up 2.0% year on year, 0.4 percentage points higher than that of last month. In the 36 large and medium sized cities, the general price level of farm products was up 3.2% year on year, 2.8 percentage points higher than that of last month. Among them, the prices of vegetable, meat, poultry and grain were up 15.7%, 8.5%, 6.3% and 2.0% respectively year on year.

II. Foreign Trade

According to the Customs statistics, China’s total import and export in August 2015 reached RMB 2.04trillion, down 9.7% year on year (the same as below). Among them, the export was RMB 1.2 trillion, down 6.1%, and import RMB 0.84 trillion, down 14.3%. The trade surplus was RMB 368.0 billion, up 20.1%. In terms of the U.S. dollar, the total import and export reached US$ 333.5 billion, down 9.1%, among which, the export was US$ 196.9 billion, down 5.5%, and the import US$ 136.6 billion, down 13.8%. The trade surplus was US$ 60.2billion, up 20.8%. The foreign trade in August presented the following features:

1. The decrease of export slowed down, but the decrease of import expanded. In August, China’s export continued the decrease；but affected by the low cardinal number of the period last year, the decrease slowed down, 2.8 percentage points slower than that of July. Affected by the large drop of price of import goods, the decrease of import in August was 5.7 percentage points higher than that of July.

2. The decrease of export to developed economies slowed down, and that of imports from some BRICS countries expanded. In August, the decrease of China’s export to Hong Kong, Japan, EU and U.S. slowed down by 11.4, 7.6, 5 and 0.6 percentage points respectively, slower than that of July. The decrease of export to Brazil, India, South Africa and ASEAN increased by 11.3, 9.3, 8.5 and 5.3 percentage points. Imports from Brazil, Russia and India was down 1.4%, 24% and 23.7% respectively, 4.6, 23.5 and 13.3 percentage points higher than in July. Imports from South Africa were down 3.4%, 28.9 percentage points lower than that of July.

3. The proportion of general trade exports was promoted, and the processing trade continued the negative growth. The imports and exports of general trade reached RMB 1.1023 trillion, down 10.3%, 1.3 percentage points higher than that of July. Among these, exports were down 4.8%, 1.7 percentage points lower than that of July with the proportion in the national total export increasing 0.8 percentage points. Imports and exports of processing trade reached RMB 639.9 billion, down 9.9%, seeing negative growth for 6 consecutive months. Among these, the export and import were down 7.9% and 13.2% respectively, dragging the growth of export and import down by 2.8 and 3.6 percentage points respectively. Imports and exports of other trade reached RMB 298.1 billion, down 7%. Among these, the export and import was down 6.6% and 6.7% respectively.

4. Export of mechanical and electrical products decreased slowly, and the import of some bulk commodities increased but the price dropped. The export of mechanical and electrical products was RMB 673.1billion, down 2.4%, 3.7 percentage points slower than that of the total export. In it, the export of hand aerophone, ships and integrated circuit were up 16.9%, 6.9% and 6.4% respectively. The export of the seven kinds of labor intensive products reached RMB 279.2 billion, down 6.3%. The import of some bulk commodities increased largely, with the import of soybean, liquefied petroleum gas, copper ore, crude oil and copper material up 29.3%, 21.1%, 20.1%, 5.8% and 3.4% respectively, but the import price was down 27.2%, 39.3%, 21.7%, 45.2% and 22% respectively.

5. Imports and exports of Eastern China were better than those of the whole country, while those of Western and Middle China decreased largely. Imports and exports of the Eastern China reached RMB 1.7603 trillion, down 8%, 1.7 percentage points lower than those of the whole country. Among these, exports and imports were down 3.5% and 13.6% respectively. Imports and exports of Middle China was RMB 134 billion, and those of Western China was RMB 146 billion, down 19.2% and 19.5% respectively, 9.6 and 0.3 percentage points higher than those of July.

III. Foreign Investment in China

In January-August 2015, a total of 16,827 newly-established foreign-invested enterprises were approved, going up 10.7% year on year. The contract value of foreign investment registered RMB1.25111 trillion (US$204.11 billion), up 34.8% year on year, the actually utilized foreign capital was RMB525.28 billion (US$85.34 billion), up 9.2% year on year. Some well-known transnational corporations like Volkswagen, Audi, Daimler, Bosch and ITOCHU continued to increase their investment in China. In August, the actually utilized foreign capital over the whole country amounted to RMB54.2 billion (US$8.71 billion), up 22% year on year.

The actually utilized FDI in service sector sustained its growth. In January-August, the utilized FDI in service sector stood at US$51.94 billion, up 20.1% year on year, taking up 60.9% among the national total, that in high-tech service industry reached US$5.51 billion, up 59.1% year on year, taking up 16.8% of the actually utilized foreign investment in service sector (excluding the real estate). Among others, R&D and design service, information technology service, and scientific research service stood out with an increase of 51.7%, 18.2% and 113.7% year on year. The actually utilized FDI in agriculture, forestry, animal husbandry and fishery registered US$1.01 billion, down 2.5% year on year, taking up 1.2% of the national total. The utilized FDI in manufacturing reached US$27.21 billion, down 1.0% year on year, taking up 31.9% of the national total, of which the actually utilized FDI in high-tech manufacturing was US$6.57 billion, up 9.9% year on year, taking up 24.1% of the total actually utilized FDI in manufacturing. Among others, the actually utilized FDI in electronic computer components manufacturing, integrated circuit manufacturing, communication equipment manufacturing, and aerospace and aviation manufacturing increased 28%, 80.3%, 176.1% and 66.2% respectively.

2. Investment from major countries and regions maintained a steady growth. In January-August, the actual input of FDI from the top 10 countries and regions (Hong Kong, Singapore, Taiwan Province, the ROK, Japan, the U.S., Germany, France, the UK and Macao) totaled US$80.46 billion, taking up 94.3% of the actually utilized national FDI, up 9.5% year on year. Among others, investment from Hong Kong, Macao, France and UK registered US$62.85 billion, US$710 million, US$1 billion and US$880 million respectively, up 15.8%, 68.6%, 115.1% and 4.7% respectively; investment from 28 EU countries registered US$5.12 billion, up 14.4% year on year and investment from Japan and the U.S. reached US$2.25 billion and US$1.67 billion, down 28.8% and 19.6% respectively year on year; and investment from the ASEAN countries registered US$4.43 billion, down 5.2% year on year.

In August, a total of 131 newly-established ASEAN-funded enterprises were approved, up 29.7% year on year, and the actual input of FDI reached US$340 million, down 31.8% year on year. A total of 175 newly-established enterprises invested by the 28 EU countries were approved, up 44.6% year on year, and the actual input of foreign investment came to US$590 million, down 9.1% year on year.

3.The actual output of FDI in eastern China sustained a rapid growth. In January-August, 2015, the actually utilized FDI in eastern China was US$72.81 billion, up 12.1% year on year, and that in central China and western China registered US$7.62 billion and US$4.91 billion, going down 4.3% and 9.1% respectively.

4.The value and percentage of foreign M&A increased greatly. In January-August, a total of 871 foreign-invested enterprises were approved by M&A with a contract value of US$16.35 billion and its actual use of foreign capital was US$14.55 billion, going up 15.4%, 144.2% and 297.7% respectively. The percentage M&A takes up among the total actually utilized FDI in January-August has risen to 17.1% from 4.7% over the same period of last year.

IV. China’s Investment and Economic Cooperation Overseas

Direct investment overseas. In January-August, the Chinese investors have made non-financial direct investment in 4,862 enterprises around 150 countries and regions, with an accumulative investment of RMB473.43 billion (US$77 billion), going up 18.2% year on year. Among others, equity and debt instrument investment amounted to 404.57 billion yuan (US$65.8 billion), up 23.8% year on year, taking up 85.5% of the total. The reinvestment of earnings registered RMB68.86 billion (US$11.2 billion), going down 6.7% year on year, taking up 14.5% of the total. By the end of August, China’s combined non-financial direct investment amounted to RMB5.05 trillion (US$822 billion).

In August, Chinese investors made direct investment overseas of US$13.5 billion, up 7% year on year. Among others, equity and debt instrument investment registered US$12.1 billion, up 8.8% year on year, taking up 89.6% of the total; reinvestment of earnings amounted to US$1.4 billion, down 6.7% year on year, taking up 10.4% of the total.

In January-August, the number of countries and regions with Chinese direct investment above US$100 million reached 42, eight of which were above US$1 billion, including China’s Hong Kong, Cayman Islands, the U.S., Singapore, the British Virgin Islands, Netherlands, Kazakhstan and Australia. Chinese enterprises have made direct investment in 48 countries along the Belt and Road, with an accumulative value of US$10.73 billion, going up 48.2% year on year, mainly in Singapore, Kazakhstan, Laos, Indonesia, Russia , Thailand and the like.

Contracted projects overseas. In January-August, the turnover of China’s contracted projects overseas amounted to RMB545.37 billion (US$88.7 billion), up 9.3% year on year. The newly-signed contract value was RMB768.81 billion (US$125.04 billion), up 27.6% year on year. In August, the turnover stood at US$9.72 billion, up 11.3% year on year, with a newly-signed contract value of US$15 billion, up 65.4% year on year.

In January-August, there are 437 projects each with a newly-signed contract value of above US$50 million (an increase of 61 compared with last year’s 376), with a combined value of US$103.9 billion, taking up 83.1% of the total. The number of projects each with a contract value above US$100 million was 262, an increase of 59 year on year.

The newly-signed contracted projects with large contract value were: the intercity railway projects in Ogun, Nigeria undertaken by China Civil Engineering Construction Corporation (US$3.51 billion), and the house building project in Bangladesh undertaken by China Gezhouba Group (US$1.42 billion).

In January-August, Chinese enterprises have signed 2,665 contracted project contracts with 60 countries along the Belt and Road. The newly-signed contract value registered US$54.44 billion, taking up 43.5% of China’s total contracted project contracts over the same period of time, up 33% year on year. The turnover was US$38.67 billion, taking up 43.6% of the total, up 4.6% year on year.

By the end of August, the contract value of China’s contracted projects overseas amounted to US$1.48662 trillion, with a turnover of US$1.02386 trillion.

Labor service cooperation overseas. In January-August, the labor service personnel dispatched overseas amounted to 343,000, with a decrease of 11,000 over the same period of last year, going down 3.1% year on year. Labor service personnel dispatched overseas for contracted projects were 175,000 and for labor service cooperation were 168,000. In August, a total of 40,000 labor service personnel were sent abroad with a decrease of 7,000. In August, the labor service personnel dispatched overseas reached 1,024,000, with an increase of 54,000 over the same period of last year.

By the end of June, the labor service personnel dispatched overseas totaled 7,820,000.

V. Service Outsourcing

In January-August, the contract value of service outsourcing signed by Chinese enterprises registered US$71.65 billion and the executed contract value registered US$53.58 billion, going up 6.6% and 12% year on year respectively. Among others, the contract value of offshore service outsourcing amounted to US$45.58 billion and the executed contract value amounted to US$35.68 billion, going up 2.3% and 10.3% year on year respectively. The contract value of onshore service outsourcing reached US$22.69 billion and the executed contract value reached US$15.48 billion, with an increase of 14.9% and 15.7% year on year respectively. Some features are presented as follows:

Firstly, the provinces and cities in southeast China continued to play a leading role in the industry. In January-August, the top six provinces and cities undertaking the offshore service outsourcing are Jiangsu, Guangdong, Shandong, Shanghai and Beijing, with an offshore contract value and the executed contract value of US$38.89 billion and US$30.87 billion respectively, accounting for 85.3% and 86.5% of the whole country, continuing to maintain the leading advantage in the industry. Besides, owing to the increase of the operating cost of enterprises, talents began to flow back to inland cities and the midwest provinces such as Hubei, Shanxi, Sichuan and Hunan enjoyed a rapid development.

Secondly, the growth of service outsourcing taken from the European market was accelerating. In January-August, the executed contract value of offshore service outsourcing taken from the US, EU, Hong Kong and Japan was US$8.11 billion, US$5.41billion, US$5.17 billion and US$3.25 billion respectively, with an increase of 8.9%, 19.2%, 14.5% and -3.4% respectively. The growth of outsourcing service taken from the European market by Chinese enterprises was higher than other main markets, marking the important highlight of tapping the international market in 2015.

VI. The Import and Export Situation of the Service Trade of China

In January-July, the total volume of import-export service added up to US$370.34 billion (not including the government service), with an increase of 14.1% compared with the same period last year. The export was US$131.94 billion, with an increase of 10.4% and the import was US$238.4 billion, with an increase of 16.3%. The growth of the service trade was beyond 10% in the two consecutive seasons, with an increase of 10.6% in the first season and 15.7% in the second season year on year respectively. The growth of service import and export in July reached 19.6%, showing a rapid growing momentum. The structure was constantly optimized and the positive factors promoting the steady growth of the service trade was continuously springing up.

The structure of the service export industry was optimized. The acceleration of the high value-added service export drove the further optimization of the export structure. In January-July, the royalty of intellectual property, and the service export of construction, culture and entertainment enjoyed a rapid development, with an increase of 43.7%, 43.1% and 35.9% respectively.

Secondly, the proportion of some traditional industries in the service import was improved. The sustainable prosperity of the outbound travel enabled tourism to continue to be the biggest industry of the service import in China. In January-July, the proportion of tourism import reached 39.8%, with an increase of 18.2 percentage points compared with the same period last year. The construction service import reached US$5.94 billion and its proportion improved 1.4 percentage points. By contrast, the high value-added service import scale decreased. The import and the royalty intellectual property was US$12.6 billion and its proportion decreased 2 percentage points; the service import of the professional management and consultancy was US$7.79 billion and its proportion reduced 1.2 percentage points and the proportion of insurance and pension and financial service dropped 4.4 percentage points and 0.4 percentage points respectively.

Thirdly, the surplus of the high value-added service trade such as consultancy was expanded and its deficit was narrowed. Although the traditional transportation service and tourism continued to maintain a relatively large-scale trade deficit, the scale of some high value-added service trade surplus was expanded. In January-July, the trade surplus of telecommunication, computer and information service was US$7.74 billion, with an expansion of US$980 million, the trade surplus of professional management and consultancy service was US$9.21 billion, with an expansion of US$600 million. Although the trade of royalty of intellectual property showed deficit again, its amount reduced obviously. The deficit was US$11.95 billion, with a decrease of US$2.61 billion.

Fourthly, the growth of the trade service in regions of the key domestic strategic layout was favorable. In 2015, regions of the key national strategic layout maintained a rapid development on the whole. In the first half year, the service import and export volume of 18 provinces relating to the “Belt and Road Initiative” reached US$179.28 billion, accounting for 56.2% of the national total, with a growth of 27.8%, 14.5 percentage points higher than the national average growth. The growth of export and import was 12.6% and 37.6% respectively, both higher than the national average growth level. The service import and export volume of the “Yangtze River Economic Zone” was US$132.14 billion, accounting for 41.5% of the national total, with an increase of 21% year on year, 7.7 percentage points higher than the national average growth. Shanghai took the lead in this race and its service import and export volume ranked the first in the whole country. The service import and export volume of Beijing, Tianjin and Hebei reached US$74.8 billion, with an increase of 6.7%, accounting for 23.5% of the national total and the service import of Beijing ranked the first in China.

Fifthly, the market concentration ratio of the service trade import and export in China was relatively high. In the first half year, China Hong Kong, the United States, Japan, Korean and Australia were the top five service trade partners of China and the proportion of the import and export volume was 52.1% of the service import and export volume of the whole country in the same period. The top five export destinations were China’s Hong Kong, the United States, Korea, Japan and Singapore respectively, accounting for 55.6% of the national service export volume. The top five import sources were the United States, China Hong Kong, Japan, Australia and Canada respectively, accounting for 52.4% of the national service import volume.

The above is the business situation in January-August, especially in August. You are welcome to raise any questions.

CCTV: It is reported that Russia’s Gazprom signed an MOU with CNPC for pipeline gas supply from Russia’s Far East to China. Could you talk to us about this and the China-Russia trade and economic relations?

Shen Danyang: Since the beginning of this year, bilateral trade between China and Russia has suffered a rather sharp decline due to changes in the international market and structural adjustments in both economies. However, presently we should see that China is still Russia’s largest trading partner, and that its position in the Russian market remains unchallenged. More importantly Sino-Russian investment cooperation has been developing steadily, with major projects seeing rapid progress and rising enthusiasm for cooperation among enterprises. On 3 September, during President Putin’s visit to China, a series of cooperation agreements were signed between the two countries. Among them was the MOU signed between the CNPC and Gazprom, under which the two sides agree to explore the possibility of supplying natural gas to China from the Far East of Russia, in addition to using the existing eastern and western pipelines. Besides, Sinopec and Rosneft signed a framework agreement under which Sinopec has the right to acquire a stake in East Siberian Oil and Gas Company and Tyumenneftegaz to jointly develop the Russkoye and Yurubcheno-Tokhomskoye fields.

Overall, China-Russia trade has entered into a period of structural adjustment following a period of rapid growth a few years ago. The difficulties in our current bilateral trade are only temporary and limited to certain sectors. Going forward, the two sides will take measures together to stabilize commodities trade such as energy and resources, and continue to improve trade structure and trade facilitation with a view to achieving a turnaround and setting out for the preset target.

CBN: Recently six ministries including the Ministry of Housing and Urban and Rural Development and MOFCOM jointly issued a circular concerning relevant policies on adjusting foreign investment access and administration in the real estate market. Do you think this document is to ease the restrictions on foreign investment and purchase in the property market? What is this document specifically about? How will it be implemented? In addition, President Xi Jinping is going to visit the US on 22 September. What do you think will be the main topics in the trade and economic aspect of the bilateral meetings between President Xi and Presdient Obama? Thank you.

Shen Danyang: Your last question first. President Xi Jinping will soon pay a state visit to the United States. This is going to be the No.1 event in China-US relations this year, and exert lasting impact on the relations between the two countries, including bilateral trade and economic relations. The Chinese sides hopes that the visit could further enhance the role of trade and economic cooperation as the ballast and propeller of the bilateral relations, enrich the content of the new model for major-country relations, and elevate the bilateral commercial cooperation to a new stage. To this end, teams on both sides are having intensive consultations on the trade and economic deliverables of President Xi’s visit to the US. Hopefully they will come up with a list of balanced and fruitful outcomes. As for the specifics, we will see when President Xi visits the US. As for those issues that interest you, such as the China-US BIT negotiation, it will be a main topic in the meetings. Another one is that MOFCOM is exploring the possibility of increasing sub-national cooperation, which will strengthen the bilateral economic relations and bring real benefits to the peoples. We hope that the two sides could work together, take advantage of the historic opportunities brought about by President Xi’s visit to the US, enhance communication, manage and control differences, expand cooperation, send positive signals to the outside world, and promote the sound and steady development of Sino-US trade and economic relations.

On your first question, as approved by the State Council, the Ministry of Housing and Urban and Rural Development and MOFCOM, together with other departments, recently issued the Circular Regarding the Adjustment of the Access and Administration of Foreign Investment in Real Estate. The main background and rationale of this Circular is the profound changes in China’s real estate market over the past years especially since the beginning of this year. Overall, there is over supply in the real estate market. Therefore, it is necessary to moderately ease the restrictions on foreign investment and purchase in the real estate market so as to promote the sound and steady development of the market.

The details of the Circular can be found on MOFCOM’s website and some other websites. The core content of the Circular covers four aspects: First, eliminating restrictions on the ratio of registered capital to total investment by foreign real estate investors, while the existing general rule for all foreign investment enterprises should be applied. Second, eliminating the restrictions that prohibit foreign real estate investment enterprises from the access to bank lending in and outside China and to foreign exchange settlement. Third, eliminating the restrictions on the foreign entities’ branches and representative bodies in China and foreign nationals working and studying in China to buy properties. Fourth, specifying that relevant departments should further streamline procedures and improve work efficiency, optimize and improve the administration of foreign investment in the real estate market.

To raise work efficiency, MOFCOM will soon work with the State Administration of Foreign Exchange to jointly promulgate relevant supporting measures on the basis of sufficient study to further streamline the administration of foreign real estate investment enterprises, and on top of that put forward opinions and measures that combine power delegation with strengthened regulation, and reinforce post-event regulation.

China News Service: The 12th China-ASEAN Expo will be open on 18th September. Is there going to be anything new announced at this year’s Expo to promote the Belt and Road Initiative? Thank you.

Shen Danyang: The 12th China-ASEAN Expo will, in following the new requirement of organically integrating with the Belt and Road Initiative and by taking advantage of the opportunity of the China-ASEAN Maritime Cooperation Year 2015, highlight the theme of building together the 21st Maritime Silk Road and jointly creating the blueprint of maritime cooperation, extend the value chain of the CAEXPO and strive for its better results.

The China-ASEAN Expo is a very important trade and economic event jointly sponsored by China and other ASEAN countries. The joint sponsorship is one of its advantages, while political influence is its eye-catching brand. This year’s CAEXPO will continue to play a unique role in improving the leaders’ informal meeting mechanism, holding ministerial consultations, strengthening political-business dialogue, forming consensus on jointly building the Belt and Road Initiative, and integrating development plans. Meanwhile, focusing on the main areas of the Belt and Road cooperation, in connection with the upgrading of the China-ASEAN FTA and with a view to tapping trading potentials and expanding the scale of mutual investment, this year’s Expo will introduce a batch of major projects in areas of international manufacturing capacity cooperation, industrial park cooperation and cross-border economic cooperation so that ASEAN countries could benefit from the dividends of the Belt and Road Initiative through the CAEXPO, and that more ASEAN products could enter into the Chinese market, thus bringing real benefits to ASEAN businesses.

International Business Daily: Recently some countries have adopted antidumping measures against Chinese steel products. Some foreign media claimed that this was a result of Chinese steel products impacting the world market. What is MOFCOM’s comment?

Shen Danyang: We have also noticed that recently some media did have some coverage of the Chinese steel products’ performance in the global market, and that some countries had taken antidumping measures against Chinese steel products. Currently steel industries across the world have already been closely integrated with one another against the backdrop of globalization. Excess capacity is a common problem that faces all steel industries amid the process of industrial structural adjustment. Putting up restrictions easily is not a way to fundamentally solve the problem. More unreasonable and unfounded is the conduct of simply determining that any Chinese product involved is being dumped. After all, the price of iron ore has been constantly declining, which has substantially reduced the cost of steel production in China. For instance, the price of iron ore has dropped from USD 110 during the period from January to August last year to only around USD 63 during the same period this year.

As for the issues with steel trade, the Chinese government has always been for the view that problems should be effectively resolved through industrial dialogue, exchange and cooperation. We also encourage industries around the world to actively engage in industrial capacity cooperation in order to achieve win-win results. Members of the WTO should strictly abide by the WTO rules, and use trade remedy measures in a prudent, restrained and rules-compliant way. At home, while we call for self-discipline within the industries, we also encourage the steel industry and enterprises involved to actively participate in responding to the investigations, and defend their legitimate rights and interests according to the rules of the WTO.
(2015-09-16 11:11:10)

Economic Information Daily: It is reported that MOFCOM has recently signed strategic cooperation agreements with the China Development Bank and the Export-Import Bank of China to promote the upgrading and transformation of national economic and technological development zones. Can you tell us more about these agreements? Thank you.

Shen Danyang: To implement the Opinions of the State Council General Office on Promoting the Upgrading and innovation-driven development of National Economic and Technological Development Zones, MOFCOM has signed a strategic cooperation agreement with the Export-Import Bank of China (China Exim Bank) and the China Development Bank (CDB) respectively to encourage policy-based banks and development financial institutions to provide credit to qualified national economic and technological development zones. Under the agreement, the Exim Bank pledges to provide a credit line of RMB 200 billion and CDB promises to offer no less than RMB 100 billion to the development zones over a period of 5 years. MOFCOM and the two banks will intensify cooperation in the following three areas.

First, carry out strategic cooperation in a pragmatic way. MOFCOM will enact relevant industrial and regional development policies, and work with the Exim Bank and the CDB to implement the agreement by jointly supporting the innovation of investment and financing systems, the relocation of industries and international cooperation in the national development zones.

Second, create communication and coordination mechanisms. MOFCOM will set up regular coordination mechanisms with the Exim Bank and the CDB respectively to advance the implementation of the agreement and projects though joint planning, study, project evaluation and research. We will seek to resolve major problems arising from the implementation of the agreement through consultation.

Third, support the innovation of investment and financing systems in the national development zones. The Exim Bank will, through its various products, solicit the support of commercial banks and non-bank financial institutions for the upgrading the national development zones. The CDB will, building on its strength of medium-to-long-term financing and comprehensive financial services, provide integrated financial services such as consultancy, lending support, direct investment and bond underwriting to qualified national development zones. In accordance with relevant national policies, MOFCOM will take a host of measures to support model and institutional innovation of national development zones.

Asahi Shimbun: In August, the RMB depreciated by a large margin. Did some export industries in China see an upward turn as a result over the past month?

Shen Danyang: Let me be clear that the devaluation of RMB is not to promote export. So there is no causal link between the two. I think the monetary policy authorities like the People’s Bank of China is in a better position to answer any question concerning the RMB exchange rate.

Southern Metropolis Daily: It is reported by Indian press that China and India have made major breakthrough on RCEP negotiations as the two countries agreed to abolish 42.5% of bilateral tariff lines. I’d like to know if there is a specific timetable for the 42.5% tariff elimination and consequently which sectors will be entitled to duty-free treatment?

Shen Danyang: I cannot reveal much information about RCEP negotiations right now. I can only address your question in principle. As a free trade agreement that encompasses countries of different stages of development, cultural background and population size, RCEP will play a historical role when it is agreed upon. It will help build an Asia Pacific region of peace, security and development and have a major impact on the rest of the world. China is a strong supporter and advocate of RCEP. The agreement, if concluded, will go a long way in boosting economic development, employment and mutual investment in the region. One thing special about this agreement is that it is in full alignment with China’s Belt and Road Initiative.

Xinhua News Agency: It is reported that China has completed its internal ratification procedures for the acceptance of the Trade Facilitation Agreement (TFA), making China the 16th member to accept the protocol. What does it mean for China and the WTO? Thank you.

Shen Danyang: The Chinese Ambassador to the WTO Yu Jianhua submitted the instrument of acceptance of the protocol of TFA to the Director General of the WTO Roberto Azevêdo on Sep. 4, making China the 16th member to accept the protocol.

The entry-into-force and implementation of the TFA will facilitate trade between countries, cut trading cost and promote global trade and economic growth. It will facilitate customs clearance and boost the confidence of exporting and importing businesses in China, thus promoting China’s foreign trade and consolidating its position as the world’s largest merchandise trader. This agreement is the first multilateral agreement on trade in goods negotiated and joined by China since its accession to the WTO. It is a major outcome of China’s participation in setting international economic and trade rules.

According to WTO rules, the TFA will come into effect after it is accepted by two thirds of WTO members. Submitting the instrument of acceptance is an important move taken by China to ensure the entry-into-force and implementation of the agreement at an early date. We hope our submission will encourage more WTO members to speed up their domestic procedures to accept the TFA protocol so that the terms of entry-into-force will be met as soon as possible.

CNR: Recently, Suning and Wanda Group announced a partnership. What is MOFCOM’s take on the increasingly innovative reorganization model and the potential impact on retailing? Thank you. (2015-09-16 11:35:37)

Shen Danyang: in recent years, owing to rising business costs, fast growing on-line shopping and macroeconomic climate, among other factors, retailers are ramping up transformation and innovation for strategic repositioning and network renovation. In that process, inter-sectoral and cross-regional integration of on-line and off-line businesses is booming. The Suming-Wanda partnership is a typical case of seeking complementarity amidst respective strategic adjustments. We believe such integration will help tap respective strengths and enhance core competitiveness, which will better meet consumer demand. So MOFCOM has been a champion of this cause and supporting retailers’ efforts to draw upon their advantages, return to the essence of retail and innovate boldly to find new development models that align with the situation and customer needs. (2015-09-16 11:35:56)

21st Century Business Herald: Indonesia has called off the plan for its first high-speed railway, but proposed that China and Indonesia can come up with a new engineering plan for a mid-speed railway. What is MOFCOM’s view on that? Besides, it is said that the China-Indonesia High-level Dialogue has reached a preliminary agreement on power station optimization and power cooperation. Could you confirm that? (2015-09-16 11:36:33)

Shen Danyang: China feels sorry for Indonesia’s decision to cancel the Jakarta-Bandung railway. China has noted Indonesia’s proposition for a mid-speed railway and is gathering information on the contents and cooperation model of the engineering plan.

As for power station optimization, China takes its cooperation with Indonesia in power station optimization and electricity very seriously. The two sides have signed a special MOU. We hope that Indonesia will follow the MOU and push for substantive progress in the cooperation. (2015-09-16 11:37:13)

The Southern Daily: My questions relate to ODI. China’s ODI was up 7% in August, returning to growth after declining in June and July. What does MOFCOM make of this development? What is your projection of ODI for the whole year? Could you shed some light on China’s ODI related to the Belt and Road Initiative? Thank you. (2015-09-16 11:37:48)

Shen Danyang: The monthly fluctuations in ODI figures, which may appear more dramatic in some months than others, are caused by technical factors like whether there are new projects and the funds involved in specific projects over a certain period of time. So normally we don’t analyze ODI changes or trends on monthly basis. Overall, since this year, China’s ODI growth, in terms of pace and trend, meets our expectations, registering a sound momentum. Our investment cooperation with B&R countries is very positive. Actually the statistics I just released also cover China’s investment growth in related countries, which is obviously outperforming China’s ODI in other countries. Thank you. (2015-09-16 11:38:11)

CRI: The CGNPC announced the other day that it had signed an MOU with the Nuclear Administration of Kenya for the Chinese side to lead a Chinese consortium to Kenya for nuclear project cooperation. Does this mark the beginning of the going global of Chinese nuclear industry? In what way is it significant for China? (2015-09-16 11:41:18)

Shen Danyang: The nuclear power project cooperation between the CGNPC-led Chinese consortium and Kenya is indeed significant. That said, this isn’t the first time that Chinese nuclear business makes forays into the overseas market. In fact, Chinese companies have already undertaken foreign nuclear power projects with certain success. In as early as 2005, which was ten years ago, the CNNC successfully landed and implemented the Chashma Nuclear Power Project in Pakistan, which has been completed and launched smoothly. In 2014 the CNNC signed the contract for Karachi nuclear power plant project of Pakistan. This year, China has reached agreements of intention of cooperation on nuclear power plants with the UK, France, Argentina and South Africa. Related businesses are following up on these nuclear power projects.

Featuring high technology content and value added and proprietary intellectual property rights, the nuclear power industry is a major component of China’s high-end equipment manufacturing sector. We believe that the going global of nuclear facilities, among other high-end equipment, is the inevitable trend of the Chinese industry, which is of great significance for exploring international premium markets and areas, accelerating the going global of Chinese engineering and technical standards and promoting industrial transformation and upgrading. (2015-09-16 11:41:43)

Phoenix TV: Newly released statistics show that US investment in China dropped 19.6% year on year this year up to August. Actually, the decline was even greater in the first half. What is your take on the fall in US FDI in China since this year? What is the cause for this? (2015-09-16 11:43:14)

Shen Danyang: We are also looking at the decline in US FDI in China, which is caused by several factors. To start with, US business investment in China used to grow fast, constituting a high base. In the past year or two, changes in the US and Chinese market are the main driving force for business decision-making. The high base figure, compounded by the market factor, is the primary reason.

Besides, this has a lot to do with China’s FDI restructuring. Since this year, as liberalization of the services sector steps up, FDI in services has been growing fairly quickly. However, there’s a mismatch between US investment in services in China and our liberalized sectors. That said, according to the information released by AmCham China, most of the US companies remain confident about investing in China. The survey shows that US-invested businesses in China are doing well in terms of growth and profit and intend to further their investment in China. (2015-09-16 11:43:41)

Shen Danyang: That concludes today’s press conference. Thank you. (2015-09-16 11:44:00)