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Regular Press Conference of the Ministry of Commerce on November 17, 2015

Friends from the media:

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

I. Market performance

Since the beginning of this year, the domestic consumer market maintained a steady growth, and the consumption growth increased recently, playing an important role in stabilizing economic growth. In October, the retail sales of consumer goods reached RMB2.83 trillion, up 11.0% year on year, and with the price factor excluded, the actual growth was 11.0%, 0.1 and 0.2 percentage points higher than September respectively. The monthly growth saw a pick up for three consecutive months. In January-October the retail sales of consumer goods was up 10.6%, 0.1 percentage points higher than the first three quarters. The main features of the consumer markets in October are as follows:

1. Online consumption maintained a rapid growth. In October, the online retail sales of enterprises monitored by the Ministry of Commerce was up 39.9%, 6.5 percentage points higher than the same period of last year, and 39.8, 32.7 and 37.2 percentage points higher than those of the special stores, supermarkets and department stores in the same month. According to the statistics of National Bureau of Statistics, the online retail sales of physical commodities in October was up 21.8% year on year, accounting for 10.4% of the total retail sales of consumer goods.

2. Rural consumption maintained a rapid growth. Driven by the rapid growth of rural consumer demands, the rural consumption in October was up 12.2%, contributing 14.9% to the growth of total retail sales of consumer goods in October, and 0.5 percentage points higher than the same period last year. At the same time, growth of urban and rural consumption saw a larger gap, with rural consumption 1.4 percentage points higher than urban consumption, 0.4 percentage points larger than the same period last year.

3. Automobile consumption picked up. Driven by the policy stimulation and the upgrading demands of the market, the automobile market picked up in October. Sales of automobiles of enterprises above designated size was up 7.1% year on year, 4.4 percentage points higher than September and 2.6 percentage points higher than the same period last year respectively. According to the statistics of China Association of Automobile Industry, the automobile sale in October was up 11.8% year on year, 9.7 percentage points higher than September. The sale of passenger car was up 13.3%, with sale growth of SUV over 60%. According to the statistics of the Ministry of Industry and Information Technology, the sale of new energy automobile in October was up 3.1 times year on year.

4. Consumption for service was vigorous. Dining out in holidays and festival increased, which drove catering consumption to pick up. In October, the national catering revenue was up 12.4%, 2.7 percentage points higher than the same period of last year. The catering revenue of enterprises above the designated size was up 6.7 percentage points. In October, the film box office reached RMB4.92 billion, and that in the National Day Holidays was up 66.4% year on year. According to the statistics of National Tourism Administration, the domestic tourists in the National Day Holidays reached 520 million, up 10.7% year on year with the tourism revenue reaching 17.9%.

5. Housing consumption picked up. The picking up of real estate market drove the sustainable and rapid growth of consumption for housing commodities. In October, the sales of building materials, furniture and household appliances of enterprise above the designated size were up 19.7%, 12.4% and 7.1% respectively, 5.3, 0.7 and 0.6 percentage points higher than the same period of last year respectively.

6. Consumer price increased gently. In October, CPI was up 1.3%, 0.3 percentage points lower than last month and than the same period last year. According to the Ministry of Commerce, the general price level of farm products in the 36 large and medium sized cities was up 0.5% year on year, with pork, chicken and milk up 13.7%, 2.7% and 2.4% respectively; and mutton, eggs and vegetable down 12.4%, 8.2% and 7.2% respectively.

II. Foreign Trade

Considering the current situation of foreign trade, China’s foreign trade development this year faces a more severe situation than 2014 with increasing downward pressure. According to the Customs statistics, China’s total import and export in January-October reached US$ 3,226.96 billion, down 8.5%. Among them, the export reached US$ 1,856.45 billion, down 2.5% year on year; the import was US$ 1,370.52 billion, down 15.7% year on year. In October, China’s import and export reached US$ 323.19 billion, down 12.1%, among which the export was US$ 192.41 billion, down 6.4%, and the import was US$ 130.77 billion, down 18.8%. The foreign trade in January-October presented the following features:

1. Export of general trade maintained a growth with the proportion increased. In January-October, export of general trade reached US$ 999.8 billion, up 1.8%, accounting for 53.9% of the total export of foreign trade, and 2.3 percentage points higher than the same period last year; export of processing trade reached US$ 649.3 billion, down 9.0%, accounting for 35% of the total export of foreign trade, and 2.5 percentage points lower than the same period last year.

2. Export of mechanical and electrical products maintained growth, but export of labor intensive products decreased. In January-October, export of mechanical and electrical products reached US$ 10,655.7 billion, up 0.8% year on year, accounting for 57.4% of the total export, and 1.9 percentage points higher than that of the same period of 2014. Among them, export of mobile phone, ship and lamps increased 13.1%, 16.9% and 13.9% respectively. Export of seven kinds of labor intensive products reached US$ 389.59 billion, down 3.0% year on year with that of textile, garment and shoes decreasing 1.9%, 7.5% and 5.1% respectively.

3. Export of private enterprises maintained growth. In January-October, export of private enterprises amounted to US$ 831.5 billion, up 1.3% year on year, accounting for 44.8% of the total export, and 1.7 percentage points higher than that of the same period of last year.

Fourthly, trade with countries along the “Belt and Road” grew rapidly. In January-October, China’s exports to neighbor countries like India, Thailand, and Vietnam grew 8.4%, 14.3% and 5.5% respectively, and those to US and ASEAN up 5.2% and 3.7% respectively. China’s exports to EU, Japan and Hong Kong decreased 4.1%, 9.5% and 12.2% respectively, and those to emerging markets like Russia and Brazil down 35.7% and 17.2% respectively.

Fifthly, exports of eastern, central and western China saw a negative growth. In January-October, the exports of ten provinces and cities in eastern China (Beijing, Tianjin, Hebei province, Liaoning province, Shanghai, Jiangsu province, Zhejiang province, Fujian province, Shandong province and Guangdong province) registered US$1.54993 trillion, down 1.9% and exports of central and western China amounted to US$306.52 billion, down 5.2%.

Sixthly, affected by the decline of prices of bulk commodity and weak domestic demands, the import still runs at low price. In January-October, the imports of 8 kinds of bulk commodities such as crude oil, plastics, soybean, refined oil products, natural gas, pulp, cereal and copper increased, but their prices dropped, with a decrease of US$134 billion (RMB840 billion) payment exchange, greatly reducing the production cost of domestic enterprises.

Seventhly, from a global view, China’s exports are better than global major economies and emerging markets. According to the statistics by WTO, in January-August, exports of US and EU decreased 6.0% and 14.7% respectively; In January-September, exports of Japan, ROK, India, South Africa and Brazil went down 9.2%, 6.6%, 16.6%, 7.9% and 16.8% respectively; China’s market share is steadily rising to 13% from 12.4% at the end of 2014.

III. Foreign Investment in China

In January-October 2015, a total of 21,022 newly-established foreign-invested enterprises were approved, going up 9.3% year on year. The actually utilized foreign capital was RMB639.42 billion (US$103.68 billion), up 8.6% year on year. In October, 2,042 newly-established foreign-invested enterprises were approved, up 2.5% year on year. The actually utilized foreign capital amounted to RMB54.68 billion (US$8.77 billion), up 4.2% year on year. The characteristics of foreign investment in China in January-October are presented as follows:

1. The industrial structure was further optimized. In January-October, the actually-utilized FDI in service sector stood at US$63.42 billion, up 19.4% year on year, taking up 61.2% of the national total, that in hi-tech service sector amounted to US$6.76 billion, up 57.5% year on year, taking up 17.5% of the total actual use of foreign capital in service sector (excluding the real estate). Among these, scientific research service, information technology service and R&D and design service stood out with an increase of 86.5%, 48.8% and 41.3% year on year. The utilized FDI in manufacturing reached US$32.6 billion, up 0.2% year on year, taking up 31.4% of the national total, of which the actually utilized FDI in high-tech manufacturing was US$7.58 billion, up 11.6% year on year, taking up 23.3% of the total actually utilized FDI in manufacturing. Among these, the actually utilized FDI in communication equipment manufacturing, electronic computer components manufacturing, and chemical products manufacturing increased 143.6%, 36.2% and 20.8% respectively.

2. The main sources of investment became diverse. In January-October, investment from ASEAN, EU, countries along the “Belt and Road”, Hong Kong district and Macao district increased 10.8%, 13.7%, 14%, 12.6% and 68.9% respectively; that from Japan, US and Taiwan district decreased 25.1%, 13.6% and 19.3% respectively. The actual input of the top ten countries and regions (calculated by the actual input of foreign capital) amounted to US$97.6 billion, taking up 94.1% of the national total, going up 8% year on year.

In October, a total of 158 newly-established enterprises invested by 28 EU countries were approved, going up 8.2% year on year. The actual input of foreign investment registered US$600 million, up 10.8% year on year.

3. The pulling role that pilot free trade zones play stood out. With the constantly deepening of pilot free trade zones, in January-October, the actually utilized FDI in eastern China registered US$88.41 billion, going up 10.1% year on year. A total of 9,859 newly-established enterprises in Yangtze river economic belt zone were approved, up 7.8% year on year, taking up 47% of the national total.

4. Both the scale and percentage of foreign M&A were greatly improved. In January-October, the number of newly-established foreign-invested enterprises by M&A reached 1,122 and the actually utilized FDI registered US$15.98 billion, going up 16% and 176.9% respectively year on year. The percentage that M&A takes up among the national total of the actually utilized FDI in January-October has risen to 15.4% from 6%.

IV. China’s Investment and Economic Cooperation Overseas

Direct investment overseas. In January-October, the Chinese investors have made non-financial direct investment in 5,553 enterprises in 152 countries and regions, with an accumulative investment of RMB589.2 billion (US$95.21 billion), going up 16.3% year on year. By the end of October, China’s combined non-financial direct investment amounted to RMB5.2 trillion (US$840.2 billion).

In January-October, the number of countries and regions with Chinese foreign direct investment flow above US$100 million reached 49. Among these, 10 countries were above US$1 billion, including China’s Hong Kong, Cayman Islands, the U.S., Singapore, the British Virgin Islands, Netherlands, Australia, Kazakhstan, Laos and Brazil.

In January-October, the investment from Chinese mainland to seven major economies such as Hong Kong, ASEAU, EU, Australia, the United States, Russia and Japan reached US$70.52 billion, accounting for 74% of the total foreign direct investment of China in the same period. The investment to ASEAN, the United States and Hong Kong increased rapidly by 115.8%, 31.5% and 18.8% respectively year on year. The investment to EU, Australia and Russia decreased 39.2%, 12.7% and 8.5% respectively.

In October, the foreign direct investment of China reached US$7.91 billion, with an increase of 14.3%.

Contracted projects overseas. In January-September, the turnover of China’s contracted projects overseas amounted to RMB710.64 billion (US$114.84 billion), up 6.4% year on year. The newly-signed contract value was RMB921.53 billion (US$148.92 billion), up 18.3% year on year. In October, the turnover stood at US$14.02 billion, down 10.2% year on year with a newly-signed contract value of US$11.29 billion, down 33.9% year on year.

In January-October, there were 527 projects with a newly-signed contracted value of more than US$50 million (up 43 year on year), with a total value of US$123.61 billion, accounting for 83% of the newly-signed contracted value. There were 307 projects with a value of more than US$100 million, up 39 year on year. In October, there were 48 projects with a newly-signed contracted value of more than US$50 million (down 20 year on year), with a total value of US$9.28 billion (down US$4.83 billion year on year), accounting for 82.2% of the total newly-signed contracted value in October. There were 25 projects with a value of more than US$100 million, decreasing by 16 year on year.

By the end of October, the contract value of China’s contracted projects overseas amounted to US$1.64813 trillion, with a turnover of US$1.15082 trillion.

Labor service cooperation overseas. In January-October, the labor service personnel dispatched overseas amounted to 427,000, with a decrease of 22,000 over the same period of last year, going down 4.9% year on year. Labor service personnel dispatched overseas for contracted projects were 213,000 and that for labor service cooperation were 215,000. In October, a total of 45,000 labor service personnel were sent abroad with a decrease of 9,000. By the end of October, the labor service personnel dispatched overseas reached 1,032,000, increasing increase by 34,000 over the same period of last year.

By the end of October, the labor service personnel dispatched overseas totaled 7,910,000.

V. Service Outsourcing

Since this year, the growth of the service import and export has maintained more than 10% for 9 consecutive months. In the first three quarters, the service trade of China increased steadily, with an accumulative service trade volume of US$495.33 billion (without governmental service), with an increase of 15.9% year on year, accounting for 14.6% of the foreign trade proportion, 2.7 percentage points higher than the same period year of last year. The service export reached US$171.63 billion, with an increase of 11.6% and the export was US$323.7 billion, with an increase of 18.3%. Some features are presented as follows:

Firstly, the service import and export has an accelerated growth season by season. The third quarter has the fastest increase, with the amplification of import and export and that of import both increasing more than 20%. The growth of the service import and export in the first, the second and the third quarter reached 10.6%, 15.8% and 20.9% respectively. The export growth reached 10.5%, 11.3% and 12.9% respectively and the import growth was 10.6%, 18.2% and 25.5% respectively.

Secondly, the service export structure was further optimized. In the first three quarters, the high value-added service export increased rapidly, with an accumulative growth of telecommunication, computer and information service export 19.1% and that of insurance and pension service 23.75%. Although the export scale of intellectual property royalty and culture and entertainment was small, the growth was rapid, with an increase of 80.3% and 53.4% respectively. The service import was mainly driven by the tourism and the growth of the tourism in the first three quarters reached 50%, accounting for 58.1% of the total import amounts.

Thirdly, the growth in the area of the key strategic layout was favorable. In the first three quarters, the service import and export volume in the regions along the line of the “Yangtze Economic Belt” was US$204.5 billion, accounting for 41.3% of the total national volume, with an increase of 19%, driving 7.6% of the national service import and export growth. The export reached US$70.13 billion, with an increase of 12.1% year on year; the import was US$134.37 billion, with an increase of 22.9%. The service import and export in Shanghai continued to play a leading role in China, with a total amount of US$107.36 billion, ranking the first in China, with an increase of 16.3% year on year. The growth of the service import and export in other provinces and cities except for Yunnan exceeded 15.9% of the national growth. The growth of the service import and export in the three northeast provinces of China was accelerated. In the first three quarters, the service import and export in these regions reached US$22.23 billion, with an increase of 19.3% year on year, 3.4 percentage points higher than the national average growth. The service export was US$5.15 billion, with an increase of 6.2%, 5.4 percentage points lower than the national average growth. The service import reached US$17.09 billion, with an increase of 23.9% year on year, 5.6 percentage points higher than the national average growth. The growth of the service import and export in Liaoning, Jilin and Heilongjiang was 15.7%, 28.2% and 26% respectively.

VI. Notification on Further Improving the Filing Work of Foreign Investment in Real Estate by the Ministry of Commerce and the State Administration of Foreign Exchange

The Ministry of Commerce and the State Administration of Foreign Exchange issued the Notification on Further Improving the Filing Work of Foreign Investment in Real Estate by the Ministry of Commerce and the State Administration of Foreign Exchange on November 6 2015 to further simplify the business managerial work of foreign investment in real estate and cancel the notification procedure of filing work on the website of the MOFCOM.

The above is the general situation. You are welcome to raise any questions.

China News Agency: We note that recently nine steel associations in the United States and Europe made a joint statement, saying the global steel industry is facing severe excess production capacity and China is the main reason. The statement expressed concern whether China would gain market economy status in December 2016 as scheduled. What is the comment of MOFCOM? What measures will be taken in the future? 2015-11-17 10:48:23)

Shen Danyang: Economic globalization has brought together the steel industry around the world. Excess production capacity is a common challenge for the global steel industry in its restructuring. Facing this challenge, China is taking active measures to improve its industrial structure, including slashing its production capacity. Recently, during his visit in the United Kingdom, President Xi mentioned that China’s steel industry has cut its production capacity by 77.8 million tons.

While cutting the production capacity, the Chinese government always advocates dialogue, exchange and cooperation among industries to address issues in steel trade. We also encourage production capacity cooperation between industries of different countries to pursue common development and win-win outcomes.

As for China’s market economy status, we believe steel trade issues are not directly related to China’s market economy status and the former should not become an excuse for continuous discriminatory and unfair trade. We hope that those countries and regions will recognize China’s market economy status at an earlier date and give up the “surrogate country” practice in their anti-dumping investigation against China.

It is worth noting that whether they recognize China’s market economy status, according to relevant provisions in the Protocol on China’s Accession to the WTO, the “surrogate country” practice in anti-dumping investigation will lose its multilateral legal basis since December 11, 2016, and therefore must stop. Obligations in treaties must be observed is a basic principle in international law. To stop the “surrogate country” practice in their anti-dumping investigation against China as a treaty obligation should be no exception according to the protocol. (2015-11-17 10:49:12)

China Central Radio Station: It is reported that China and Singapore have agreed to start the negotiations to upgrade their FTA and strive to conclude the negotiations by the end of 2016. Would you provide more information? Thank you. (2015-11-17 10:51:32)

Shen Danyang: During President Xi Jinping’s state visit to Singapore between 6-7 December, China’s Commerce Minister Gao Hucheng and Singapore’s Minister for Trade and Industry Lim Hng Kiang signed the document on launching FTA upgrade negotiations, which officially started off their negotiations.

Since it entered in force in January 1, 2009, China-Singapore FTA has delivered a strong boost to their bilateral commercial relations. Now, China is Singapore’s largest trading partner and top investment destination; and Singapore is China’s third largest trading partner and top investment destination in ASEAN countries. In the upgrade negotiations, the two countries will focus on further promoting trade facilitation, speeding up liberalization in the services industry, encouraging two-way investment and exploring new cooperation fields in order to bring their commercial relations to a higher level. The two sides have agreed to strive to conclude the negotiations by the end of 2016. (2015-11-17 10:52:12)

The website of People’s Daily: According to China Automobile Industry Association, all new energy cars enjoy growth in October. Would you comment on the reasons? (2015-11-17 10:58:42)

Shen Danyang: The good sales of new energy cars is a highlight in the automobile market this year, not just in October. According to China Automobile Industry Association, in the first ten months of this year, new energy car sales in the country totaled 171,145, a year-on-year increase by 2.9 times. Among them, the sales in October reached 34,316, an increase of five times. These figures indicate that new energy car sales began to boom before October and actually since the beginning of this year.

We believe that both policy factors and market factors are in play. For policy incentives, China is actively encouraging new energy cars in recent years. For example, automobile placement tax is exempted from qualified new energy cars and consumers have access to subsidies for some new energy cars. Recently, relevant authorities issued guidelines on building more charging infrastructure for electric cars as well as guidelines on building urban parking lots which require proportionate charging infrastructure for electric cars should be built. We also understand that potential buyers have two concerns. One is charging. The other is traffic restriction or car template restriction after purchase. On charging, the authorities have taken it seriously and adopted many measures. On restriction, the regular meeting of the State Council on September 29 affirmed measures to support new energy cars and made clear that there be no restriction on the use and purchase of new energy cars and existing measures be abolished. This is critical for Beijing and other cities which have introduced car purchase restriction policies to unleash their potential demand for new energy cars. It is also an important reason for faster growth of new energy car sales in October.

For market factors, the general public is more aware of environmental protection, new energy cars are improving their performance to cost and they are also more exposed to the public. More and more consumers have accepted new energy cars. In addition to policy incentives, the demand for new energy cars is growing rapidly, leading to its booming sales. (2015-11-17 10:59:22)

International Business Daily: I have a question on China-EU cooperation. The statistics just announced indicate trade with the EU, China’s largest trading partner, declined by 4.1%. On the other hand, high-level visits and engagements are also frequent. How do you describe China-EU cooperation this year? (2015-11-17 11:06:25)

Shen Danyang: This year marks the 40th anniversary of diplomatic relations between China and the EU as well as 65th anniversary of diplomatic relations between China and European countries such as Sweden, Denmark, Finland and Switzerland. This year witnessed frequent exchange of high-level visits and fruitful outcomes in commercial cooperation between China and Europe. For example, we have further enriched our mechanisms on economic cooperation and trade, improve trade mix, made major progress in two-way investment, and maintained stability in trade frictions.

First, our mechanisms on economic cooperation and trade have become richer, more substantive and practical, playing an increasingly important role in two-way commercial cooperation. At present, China and Europe have High-Level Economic Dialogue (HED) with the European Commission, financial dialogues with the UK, France and Germany at the deputy-prime-minister level, the mixed committee mechanisms with trade and economic ministries of European governments at the ministerial and director-general levels, as well as economic advisory council mechanisms with Germany, Italy and Spain etc.

Second, trade mix has improved and trade in services is booming. The volume of China-EU two-way trade is declining, but its quality is improving. The share of low value-added products such as garment and footwear is contracting, while the share of high value-added products such as machinery, electric, high and new tech products enjoy substantial growth. For example, trade in machinery and electric products increased by 8% and that of high and new tech products increased by 15.3%. At the same time, trade in services is growing rapidly. In the first nine months this year, trade in services reached US$73.2 billion. Among them, China’s export to Europe reached US$21.42 and its import from Europe reached US$51.78 billion.

Third, two-way investment is growing steadily with “blowout” in M&A projects in Europe. In the first nine months this year, Europe’s paid-in investment enjoyed rapid growth and reached five billion US dollar. According to MOFCOM, new contracts signed for Chinese investment in Europe were worth US$5.4 billion between January and September. Chinese investors are active in M&A in Europe with quite a number of large projects. For example, China General Nuclear Power Corporation (CGN) and EDF of France signed a deal worth 6.784 billion pounds on Hinkley Point C project. Sinochem spent 7.1 billion euros to purchase the century-old Italian tire brand Pirelli. And Fosun International spent 993 million euros to purchase Club Med.

Fourth, trade frictions remain stable without major disputes. By the end of October, the EU has launched eight trade remedy investigations, six involving China, basically the same as last year. Although the European commission disqualified some violating Chinese businesses from price undertaking and launched mid-term review and anti-circumvention investigation, indicating it is getting tougher on trade remedy investigation and enforcement on China, the implementation of price undertaking in China-EU trade dispute on solar panel is smooth by and large. (2015-11-17 11:06:42)

CCTV Economic Channel: The sales of single’s day online shopping reached a new high this year. There are many comments. What’s the view of MOFCOM? (2015-11-17 11:14:56)

Shen Danyang: The recent singles’ day online shopping has caught close attention and reached a new high this year. According to statistics released by e-commerce companies, Taobao and Tmall’s sales volume exceeded 91.2 billion yuan, a year-on-year increase of 59.7%; JD.com received 32 million orders on November 11, a year-on-year increase of 130%; and the number of orders Suning received increased by 358% year-on-year. Major e-commerce companies received 460 million orders on that single day, a year-on-year increase of 65%.

As China is vigorously promoting e-commerce and consumption in general, online shopping on the singles’ day this year has a few highlights that even caught the attention of the whole world. First, promotional activities have become global. Global buy and global procurement have boomed. Second, the consumption potentials in the countryside are fully unleashed. 30% orders of large electric products came from areas below county-level. Third, online and offline shopping have been further integrated. As many as 180,000 stores in 330 Chinese cities have tried all-channel marketing to different degree in this online shopping spree. Fourth, e-commerce companies have added more innovation to their technological platforms so that the payment system can handle 85,900 transactions every second and the logistics system improve accuracy in real-time forecasting.

While seeing these highlights, we also pay attention to the cool-headed comments by some experts and media in this online shopping spree, comments that I believe deserve our attention, such as substandard and fraudulent products, domination by large platforms, protection of consumer rights and authenticity of promotional advertisement. Some people also argue that this online shopping spree may cause man-made market fluctuation. All these issues deserve the attention of people in this industry and regulators. We should take precautionary measures to address these. In sum, we are confident that with concerted efforts, e-commerce market in China will enjoy sustained, healthy and rapid growth. (2015-11-17 11:15:48)

Kyodo New Agency: Would you provide statistics on Japanese investment in China in US dollar between January and October. What do you think of the declining Japanese investment in China in recent years? What do you expect investment from Japanese companies? (2015-11-17 11:21:14)

Shen Danyang: Japanese companies’ investment in China is declining, by 38.8% in 2014 and by 25.1% between January and October this year. There are complex reasons, external and Japan itself. Some experts have made the following analysis:

First, RMB is appreciating and the Japanese Yen is devaluing, which increased the cost of investment by Japanese companies and dented the competitiveness of export-oriented Japanese companies.

Second, the Chinese economy has entered the “New Normal”—economic slowdown and growing cost in labor and land. Some Japanese investors adopt a wait-and-see attitude out of concern for China’s economic prospects.

Third, Japanese investors arrived early in China. The majority of large Japanese investors have already established presence in China with good economic returns. Now, many Japanese investors already in China are shifting their focus towards improving economic returns.

Fourth, as investors around the world come to China and local businesses grow rapidly, the China market has become increasingly competitive. Some Japanese businesses are forced out of the China market due to their low technology and competitiveness and poor business performance.

The future trend of Japanese investment in China remains to be seen. The recent JETRO report on the status and future of Japanese businesses in China indicateS that the Japanese business community remains committed to investing in China.

The survey was conducted among Japanese businesses operating in China and China-related departments of Japanese businesses in Japan. According to this survey, the Japanese business community generally believes that although the Chinese economy is slowing down, its new economic output remains impressive. They have high expectation on China’s growth potentials released by economic restructuring, stay cool-headed about operational pressure caused by growing cost, and express willingness to seize strategic opportunities in China’s urbanization and “Made in China 2025”. The majority of Japanese businesses already operating in China say China remains a strategic investment destination with huge potentials and they are exploring business opportunities and expanding investment in China.

According to the UNCTD World Investment Report, the majority of multinational companies still consider China as their top investment destination between 2015 and 2017. China and Japan have a high degree of economic complementarity and great potentials in investment cooperation. MOFCOM hopes visionary Japanese companies with rich experience in international investment cooperation will play out their advantages in technology and management, seize the important opportunities in economic restructuring and shift of growth model in the next five years, further explore the China market and especially step up cooperation with their Chinese counterparts in green and low-carbon sector, environmental protection and energy conservation, e-commerce, services for the elderly and new and high tech in order to promote China-Japan commercial cooperation and economic upgrade and transformation in parallel. (2015-11-17 11:21:38)

South China Cosmopolitan Daily: According to some media reports, China’s direct investment in Africa totaled US$568 million in the first half of this year, a sharp decline of 84% compared with last year. How do you interpret this figure? Do you think it’s short-term fluctuation or long-term trend? Thank you. (2015-11-17 11:28:13)

Shen Danyang: Financial Times has such report recently, but the statistics are not correct. According to MOFCOM, China’s direct investment in Africa totaled US$1.19 billion rather than US$568 million in the first half of 2015.

There is some fluctuation in China’s investment in Africa in the first half of 2015 with decline as much as 40%. It is due to sluggish world economic recovery, fluctuation in international commodity prices and Ebola in Africa since last year. In the long-term, we believe China’s investment in Africa will continue to grow. The Chinese government is committed to investment cooperation in Africa. During his visit to Africa last year, Premier Li Keqiang proposed the 461 China-Africa cooperation framework and announced that China would push forward cooperation with Africa in six fields including industry and finance and strive to make China’s direct investment stock reach US$100 billion by 2020. In the next step, in light of the economic development levels, market potentials, geographical locations and business environment of African countries, China will focus on African countries and regions with good past cooperation with China and high degree of integration, and promote China-Africa industrialization partnership and encourage more Chinese companies to come to Africa according to industrial restructuring in China and changing aspirations of Africa in its development. Thank you. (2015-11-17 11:28:41)

Dragon TV: I have a question on e-commerce. Sales during the singles’ day shopping spree and the whole e-commerce keep growing despite overall economic slowdown. What are the reasons? While enjoying the online shopping spree, consumers keep complaining about infringement and substandard and fraudulent products. What measures MOFCOM has adopted to address cyberspace infringement and fraud and protect consumer rights? Thank you. (2015-11-17 11:36:43)

Shen Danyang: There are many reasons and consequently many analyses on the online shopping spree during the singles’ day. It is difficult to find an authoritative answer, but one basic reason is the high degree of market orientation in e-commerce and its strong pulling effect. This online shopping spree, not promoted by the government, is a market-based promotional event or a market phenomenon. It is impossible to happen with the strong pulling effect of the market. It can meet various market demands. Of course, the government needs to provide a favorable policy environment. As I have mentioned, the government wants to see this and will maintain this favorable environment.

As for problems that come up in this process, experts and media have made quite a lot of comments and we pay close attention as well. China has become the largest online retail market in the world. E-commerce has become the most dynamic and promising sector in the emerging modern logistics in China, but the Internet is also fraught with fraudulent and substandard products as well as infringement and piracy. The national office against infringement and fraudulent and substandard products is housed in MOFCOM. Since last year, this office has carried out a special operation along with 14 member agencies and made hard efforts such as promoting online real-name system and online supervision, regulating business behavior, punishing illegal websites and publishing pre-warning list of TV and film works.

Take film piracy for example. In the past, when a new film come out, one can immediately find its pirate copies on the Internet, but it is almost non-existent. This is a very good thing for China’s film industry. In the first half of 2015, the box office in China increased by 50% after 47% growth last year in no small part due to protection of intellectual property and crackdown on piracy. We have made some progress, but there is still a long way to go and we will step up efforts in the future. Recently, we drafted the guidelines on addressing cyberspace infringement and fraud. These guidelines, adopted and distributed by the General Office of the State Council, identified 14 tasks in four fields and planned to effectively curb cyberspace infringement and fraud in three years. They focus on regulating food, drugs, cosmetic products, medical devices, household appliances, electric products and automobile parts which are closely related to the health and safety of consumers, as well as Internet infringement and piracy.

Moreover, we need to clarify corporate responsibilities. It is not just dependent on the government to crack down on infringement and piracy. The business community also has its responsibilities. We have made clear requirements that e-commerce platform companies must step up review on the qualification of online operators and Internet service providers must fulfill their obligations to notice and delete. Real-name system should be introduced into distribution, storage, mail service and express delivery businesses. Websites providing bidding for search outcomes should prevent such outcomes from misleading consumers. Businesses should work together with enforcement agencies in tracking down on operators of infringed and pirate products. Businesses should not enhance their credibility through fraudulent transactions.

We also need to step up enforcement coordination. In response to new features in online transaction, we need to improve our coordination and cooperation mechanism, strengthen connection between enforcement and judiciary, promote cross-regional, cross-departmental, cross-boundary and government-business coordination, and improve information reporting system.

Last but not least, we need to improve the long-term mechanism. In response to new challenges in fraud through WeChat and Weibo, we will study regulatory measures such as a “black list” of businesses with bad reputation, as well as step up supervision by media and the general public. On the basis of cases already made public, we will start to build a “black list” database which will be available in due time for the general public to search businesses involved in infringement and fraud. (2015-11-17 11:37:08)

United Daily News: The 12th round of cross-straits trade in goods negotiations will be held in Taiwan this weekend. Would you brief us the priorities in negotiations. During their meeting in Singapore, mainland and Taiwan leaders proposed to conclude trade in goods negotiations by the end of this year. Now is already November. It is possible to reach this objective? (2015-11-17 11:38:47)

Shen Danyang: As for the cross-straits trade in goods negotiations, the two sides need to have further consultation before releasing accurate information. So, I’m not in a position to answer this question today. (2015-11-17 11:39:27)

Phoenix TV: We notice there is a mid-term review in the minimum price adjustment mechanism adopted by the European Commission on Chinese imported solar panel. Recently, the mid-term review outcome is released, saying there is no need to make adjustment to current baseline prices and will end the mid-review process. Would you provide more details on this issue? Thank you. (2015-11-17 11:49:36)

Shen Danyang: Acting upon the application of European solar panel industrial alliance, the European Commission launched mid-term review on the minimum price adjustment mechanism on May 5 this year. The applicants accused Chinese businesses of low-price reporting to reduce baseline prices and demanded quotes from Chinese businesses removed from Bloomberg price index as the basis for minimum price adjustment. This attempt aimed to increase minimum prices through mid-term review and increase the price threshold for Chinese products to come to the EU.

MOFCOM organized Chinese industrial associations and businesses to launch active legal defense and held a number of consultations with the EU investigators. Thanks to our hard efforts, the European Commission disclosed on November 4 that it basically recognized the opinions of Chinese defenders, pointing out that the increase in the quotes of Chinese companies is caused by China’s growing share in the solar panel market, the reduction in China’s prices is not bigger than that in international prices, and international and Chinese prices have similar trends. In other words, the current baseline prices, Chinese prices included, can reflect global solar panel prices in general, and therefore need not to change. Therefore, the European Commission planned to end the investigation.

This issue has come to good outcomes so far. But we need to continue to work. MOFCOM will step up communication and consultation with the European Commission in order to restore free trade in solar panel products at an earlier date and to promote the wider use of clean energy, contributing to the international efforts to address climate change. (2015-11-17 11:49:50)

Shen Danyang: This comes to the end of the press conference. Thank you. (2015-11-17 11:50:08)

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