Friends from the media:

Welcome to the press conference today. I’m glad to meet you again. Next, I will brief you the situation of business performance in 2015, and answer the questions of your concern.

I. Market performance and features

In 2015, China’s consumer market was steady in general but fluctuated slightly, low at first but high in the end. The retail sales of consumer goods in 2015 reached RMB 30.1 trillion, up 10.7% year on year, 0.2 percentage points higher than that of the first three quarters; with the price factor excluded, the actual growth was 10.6 %, 0.3 percentage points slower than that of 2014. The sales of the retail enterprises monitored by the Ministry of Commerce in November were up 4.5% year on year. Consumption contributed 66.4% to the national economic growth, 15.4 percentage points higher than that of 2014, fully playing the role of a stabilizer of economic growth. The main features of the consumer market in the whole year are as follows:

1. New business type enjoyed a rapid development. The online retail sales of physical commodities were up 31.6% year on year, accounting for 10.8% of the total retail sales of consumer goods. Among the key enterprises monitored by the Ministry of Commerce, the sales of shopping centers were up 11.8% year on year, 5, 8.4 and 11.5 percentage points higher than those of supermarkets, department stores and special stores respectively.

2. Sales of intelligent and green products were vigorous. Sales of communication equipments and home appliance of the enterprises above the designated size were up 29.3% and 11.4% respectively. The sale of 4G mobile phones of the key enterprises monitored by the Ministry of Commerce was up 75.9% year on year. Sales of First-Grade energy consumption refrigerator and air conditioner were 13.3 and 12.9 percentage points higher than those of the whole refrigerator and air conditioners. Sales of new energy automobiles in the whole year increased 3.4 times.

3. Service Consumption witnessed a rapid growth. Consumption in public catering, entertainment and culture, and leisure tourism was constantly overheated. The national catering revenue was up 11.7%, 2 percentage points higher than that of last year. Among that, the catering revenue of enterprises above the designated size increased 13.6%. The box office earning of film was over RMB 44 billion, up 50% year on year. More than 4 billion people enjoyed domestic tourism, with the tourism revenue over RMB 4 trillion.

4. Regional structure was constantly optimized. The retail sales of rural consumer goods reached RMB 4.2 trillion, up 11.8 year on year, accounting for 13.9% of the total retail sales of consumer goods, 0.2 percentage points higher than that of 2014, and higher than that of the urban area since 2013. The consumption in middle and western areas took the lead. In the retail enterprises monitored by the Ministry of Commerce, the sales in the middle and the west were 1.2 and 0.9 percentage points higher than that of the east respectively.

5. Consumer price increased slightly. According to the Ministry of Commerce, the general price level of farm products in the 36 large and medium sized cities was up 0.6% year on year, 0.1 percentage points slower than that of 2014. The price of grain was up 2.3%; the price of edible oil was down 4.8%; the price of pork recovered the price increase, up 6% year on year. The prices of beef and mutton ended their 12 years’ continuous increase, down 1% and 11.3% year on year respectively.

II. Foreign Trade

2015 was an extraordinary year for China’s foreign trade, facing a more severe and complicated situation and higher downward pressure. According to the Customs statistics, China’s total import and export in 2015 reached RMB 24.58 trillion, down 7% year on year. Among them, the export was RMB 14.14 trillion, down 1.8% year on year, and the import was RMB 10.45 trillion, down 13.2% year on year. In terms of the US dollars, China’s total import and export reached US$ 3.96 trillion, down 8%. Among them, the export was US$ 2.28 trillion, down 2.8%; and the import US$ 1.68 trillion, down 14.1%. The growth of import and export decreased, but from the international perspective, China’s export growth was still better than the major economies and emerging market economies in the world. China’s proportion in the global market was steady and had increased. China accelerated its structure adjustment and power transference, making the quality and efficiency of foreign trade development further promoted. The foreign trade in 2015 presented the following features:

1. In terms of international comparison, China maintained the status as the largest trade country, and the export proportion in the global market was steady and had increased. China’s export was better than major economies and emerging market economies. According to the WTO, in January-November in 2015, the export of the U.S. (-6.8%), Germany (-11.2%), Japan (-9.4%), ROK (-7.4%), Hong Kong (-3.1%), India (-17.5%), South Africa (-9.5%) and Brazil (-16.0%) all witnessed negative growth, higher than that of China (-2.5%), from 0.6 to 15 percentage points. The proportion of China’s export in the global market increased to about 13.4%, 1 percentage point higher than that of 2014. In January-November, China’s import and export were US$ 56.6 billion higher than those of the U.S., among that, the export was US$ 667.2 billion, keeping China’s status as the largest goods trader.

2. In terms of the trade patterns, the export of general trade maintained its growth, becoming the main power to drive export. In 2015, the export of general trade was US$ n1.2173 trillion, up 1.2%, accounting for 53.5% of the total export, 2.1 percentage points higher than that of the same period of 2014; the export of processing trade was US$ 797.8 billion, down 9.8%, accounting for 35% of the total export, 2.7 percentage points lower than that of the same period of 2014.

3. In terms of the main products, the export of mechanical and electrical products maintained the growth, with the products structure further optimized. In 2015, the export of mechanical and electrical products reached US$ 1,311.93 billion, up 0.1% year on year, accounting for 57.6% of the total export, 1.8 percentage points higher than that of the same period of 2014. Among them, the exports of mobile phones, ships and lamps were up 8.5%, 13.3% and 15% respectively. Export of seven kinds of labor intensive products reached US$ 472 billion, down 2.7% year on year, accounting for 20.7% of the total export, with those of textile, clothing and shoes down 2.3%, 6.4% and 4.8% respectively.

4. In terms of business entities, the export of private enterprises remained its growth, becoming the main force of export. In 2015, the export of private enterprises was US$ 1,029.5 billion, up 1.8% year on year, accounting for 45.2% of the total export, 2.1 percentage points higher than that of the same period of 2014; the export of foreign invested enterprises was US$ 1,004.7 billion, down 6.5% year on year, accounting for 44.2% of the total export; the export of state owned enterprises was US$ 242.4 billion, down 5.5% year on year, accounting for 10.6% of the total export.

5. In terms of the main markets, market diversification has gained progress, and the export to the related countries of “Belt and Road” maintained a growth. In 2015, China’s export to India, Thailand and Vietnam was up 7.4%, 11.7% and 3.8% respectively. The export to the U.S. and ASEAN was up 3.4% and 2.1% respectively. The export to the traditional markets like EU, Japan and Hong Kong was down 4.0%, 9.2% and 8.7% respectively. The export to the emerging markets like Russia and Brazil was down 35.2% and 21.4% respectively.

6. In terms of regions, the proportion of the Middle China increased. In 2015, the export of 10 provinces in Eastern China (Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong and Guangdong) was US$ 1,901.56 billion, down 2.0%, accounting for 83.5% of the total export, 0.6 percentage points higher than that of 2014; the export of the Middle China was US$ 182.69 billion, down 1.5%, accounting for 8.0% of the total export, 0.1 percentage points higher than that of 2014; the export of the Western China was US$ 192.32 billion, down 11.5%, accounting for 8.5% of the total export, 0.7 percentage points slower than that of 2014.

7. New business types maintained a rapid growth. New business types like cross-border e-commerce and marketing purchase have been becoming the new growth points of foreign trade development. In 2015, cross-border e-commerce grew more than 30%. Export by purchasing trade grew over 70%.

8. Affected by the price drop of bulk commodity and weak domestic demands, the imports still run at low price but with better quality and efficiency. In 2015, the imports of 10 kinds of bulk commodities such as crude oil, plastics, soybean, natural gas, pulp, cereal and copper concentrate increased，but their prices dropped by US$188 billion (RMB1.2 trillion) payment exchange, greatly reducing the production cost of domestic enterprises and improving the efficiency.

III. Foreign Investment in China

In 2015, the size of foreign investment in China sustained a steady growth and the utilization of foreign capital was further improved. The characteristics of foreign investment in China are presented as follows:

1.The size of foreign investment hit a record high. In 2015, a total of 26,575 newly-established foreign-invested enterprises were approved, going up 11.8% year on year. The actually utilized foreign capital registered RMB 781.35 billion (US$126.27 billion), up 6.4% year on year (excluding data of bank, security and insurance). Among these, in December, a total of 2,927 newly-established foreign-funded enterprises were approved, up 17.9% year on year. The actual use of foreign capital stood at RMB77.02 billion (US$12.23 billion), down 5.8% year on year.

2.Investment from major countries and regions maintained a steady growth. In January-December, the actually utilized FDI from the top ten countries and regions totaled RMB733.97 billion (US$118.63 billion), up 6.2% year on year, taking up 94% of the national total. The investment from ASEAN, EU, countries along the “belt and road”, Hong Kong and Macao grew up 22.1%, 4.6%, 25.3%, 8.8% and 53.45 respectively, while that from Japan, U.S., and Taiwan decreased 25.2%, 2% and 14.1% respectively.

3.The use of foreign capital was constantly improved, and industrial structure was further optimized. The actually utilized FDI in service sector registered RMB 477.05 billion (US$77.18 billion), up 17.3% year on year, taking up 61.1% of the national total. That in manufacturing was RMB245.23 billion (US$39.54 billion), basically the same as last year, taking up 31.4% of the national total. Among these, the utilized FDI in hi-tech manufacturing continued to grow, with a total of RMB58.35 billion (US$9.41 billion), going up 9.5% year on year, taking up 23.8% of the national total in manufacturing.

4.Eastern China sustained a sound momentum for attracting FDI. In January-December, the actually utilized FDI in eastern China registered RMB655.16 billion, going up 8.9% year on year. A total of 11,974 newly-established foreign-invested enterprises in Yangtze River economic belt zone were approved, going up 7.8% year on year, taking up 45.1% of national total. The actually utilized FDI in central China stood at RMB64.49 billion, down 3.3% year on year. That in western China was RMB61.7 billion, down 6.8% year on year. Central and western China took up 16.2% of the total FDI in China.

IV. China’s Investment and Economic Cooperation Overseas

Direct investment overseas. In 2015, the Chinese investors have made non-financial direct investment in 6,532 enterprises of 155 countries and regions, with an accumulative investment of RMB735.08 billion (US$118.02 billion), going up 14.7% year on year. In December, China’s direct investment overseas registered RMB 86.5 billion (US$13.89 billion), going up 6.1% year on year. By the end of December, China’s total non-financial direct investment registered RMB5.4 trillion (US$863.04 billion).

In 2015, the number of countries and regions with Chinese foreign direct investment flow above US$100 million reached 54. Among these, 13 countries were above US$1 billion, including China’s Hong Kong, Cayman Islands, the U.S., the British Virgin Islands, Singapore, Netherlands, Australia, Kazakhstan, Luxembourg, Laos, Indonesia, Canada and Brazil. Chinese enterprises have made direct investment in 49 countries along the “belt and road”, with a total value of US$14.82 billion, going up 18.2% year on year, taking up 12.6% of the total, mainly flowing into Singapore, Kazakhstan, Laos, Indonesia, Russia and Thailand.

In 2015, the investment from Chinese mainland in seven major economies such as Hong Kong, ASEAU, EU, Australia, the United States, Russia and Japan reached US$86.85 billion, accounting for 73.6% of the total foreign direct investment of China in the same period. The investment in ASEAN and the United States increased rapidly by 60.7% and 60.1% respectively year on year. The investment to Hong Kong increased 8.3%.

Contracted projects overseas. In 2015, the turnover of China’s contracted projects overseas amounted to RMB959.6 billion (US$154.07 billion), up 8.2% year on year. The newly-signed contract value was RMB1.3084 trillion (US$210.07 billion), up 9.5% year on year, leading US$16.13 billion exports of equipment materials. In December, the turnover stood at US$23.95 billion, up 13.5% year on year with a newly-signed contract value of US$47.04billion, up 52.8% year on year.

In 2015, there were 721 projects with each of them having a newly-signed contracted value of more than US$50 million (an increase of 59 year on year), with a total value of US$175.85 billion, accounting for 83.7% of the newly-signed contracted value. There were 434 projects and each of them has a value of more than US$100 million, up 69 year on year. In December, there were 131 projects and each of them has a newly-signed contracted value of more than US$50 million (an increase of 19 year on year), with a total value of US$41.31 billion, taking up 87.8% of the total newly-signed contracted value in December. There were 92 projects with each of them having a value of more than US$100 million, with an increase of 29 year on year.

In 2015, a total of 3,987 contracts for contracted projects in 60 countries along the “belt and road” were signed by the Chinese enterprises, with a contract value of US$92.64 billion, taking up 44.1% of China’s contracted projects overseas, going up 7.4% year on year. The turnover amounted to US$69.26 billion, taking up 45% of the total over the same period of time, going up 7.6% year on year.

By the end of 2015, the contract value of China’s contracted projects overseas amounted to US$1.5717 trillion, with a turnover of US$1.0892 trillion.

Labor service cooperation overseas. In 2015, the labor service personnel dispatched overseas amounted to 530,000, with a decrease of 32,000 over the same period of last year, going down 5.7% year on year. Among these, those for contracted projects were 253,000 and those for labor service cooperation 277,000. In December, a total of 58,000 labor service personnel were sent abroad with a decrease of 5,000. Labor service personnel dispatched overseas were 1,027,000 by the end of 2015, with an increase of 21,000.

By the end of 2015, the labor service personnel dispatched overseas reached 8,020,000.

V. Service Outsourcing

In 2015, against the background of slow recovery of the global economy and greater downward pressure of the domestic economy, Chinese service outsourcing developed well on the whole. Some features are presented as follows:

Firstly, the offshore service outsourcing developed steadily. In 2015, the contract value of service outsourcing signed by the Chinese enterprises was US$130.93 billion and the executed value was US$96.69 billion, with an increase of 22.1% and 18.9% respectively year on year. The contract value of the offshore service outsourcing reached US$87.29 billion and the executed value reached US$64.64 billion, with an increase of 21.5% and 15.6% year on year respectively. The contract value of the onshore service outsourcing was US$43.64 billion and the executed value was US$32.06 billion, with an increase of 23.3% and 26.1% respectively year on year.

Secondly, the market pattern of the contract awarding was relatively stable. In 2015, the executed value of service outsourcing undertaken by Chinese enterprises from the United States, the EU, China Hong Kong and Japan was US$15.06 billion, US$9.8 billion, US$9.5 billion and US$5.48 billion, with an increase of 17.5%, 17.6%, 28% and -9.8% respectively year on year, accounting for 61.6% of the total executed value of the offshore service outsourcing.

Thirdly, the business of provinces and cities along the line of the Yangtze River Economic Belt maintained rapid development. In 2015, the contract value of the offshore service outsourcing undertaken by 11 provinces and cities along the line of the Yangtze River Economic Belt was US$48.13 billion and the executed value was US$39.41 billion, accounting for 55.1% and 61% of the total respectively, with an increase of 13.1% and 16.9% respectively year on year. Jiangsu, Zhejiang and Shanghai were the main force of conducting the offshore outsourcing business and the executed value was US$34.48 billion in total, accounting for 87.5% among the provinces and cities along the line of the Yangtze River Economic Belt. Jiangxi, Hubei and Hunan took the advantage of the low operation cost and rich human resource to actively undertake the industrial transference. The executed value of offshore service outsourcing increased 37%, 33.8% and 26.6% respectively year on year, far higher than the average level of the whole country.

Fourthly, the importance of the “Belt and Road” market was improved obviously. In 2015, the contract value of the service outsourcing undertaken by the relevant countries along the line of the “Belt and Road” was US$17.83 billion and the executed value was US$12.15 billion, with an increase of 42.6% and 23.4% respectively year on year. The contract value of service outsourcing undertaken from the Southeastern countries was US$8.99 billion and the executed value was US$6.32 billion, with an increase of 30.6% and 17.3% respectively year on year. The contract value of service outsourcing undertaken from the West Asian and the North African countries was US$4.35 billion and the executed value was US$2.52 billion, with an increase of 113% and 61.5% year on year respectively. The contract awarding of the relevant countries of the “Belt and Road” accounted for 18.8% of the total offshore outsourcing and the market importance was obviously improved.

Fifthly, the structure of offshore service outsourcing was optimized day by day. In 2015, the executed value of offshore service outsourcing of ITO, BOP and KPO undertaken by the Chinese enterprises was US$31.6 billion, US$9.17 billion and US$23.78 billion, with an increase of 8%, 16% and 27.4% respectively year on year, accounting for 49%, 14.2% and 36.8% respectively. The outsourcing business such as medicine and biotechnology research and development, cartoon and online game design research and development, industrial design and project design enjoyed a rapid development, driving a steady optimization of the business structure of the service outsourcing.

Sixthly, the integration of the service outsourcing and the vertical industry was deepened. With the formal implementation of the “Internet+” strategy and the action plan in 2015, the professional production organization mode based on the internet and modern information technology was widely used, further deepening the profound integration of vertical industries such as the service outsourcing and information service industry, manufacturing, wholesaling and retailing industry, transportation industry, energy, finance and health industry, etc. In 2015, the executed value of offshore service outsourcing of information service industry and manufacturing industry was US$31.56 billion and US$17.73 billion, accounting for 48.8% and 27.4% of the total industry respectively. The service outsourcing mode was widely used, not only improving the professional service capacity of the domestic industries, but also promoting the transformation and upgrading of the industrial structure, improving the whole production efficiency. This better realized the economic and social benefits.

VI. The bilateral Trade and Economic Cooperation Situation between China and Saudi Arabia, Egypt and Iran

The trade and economic cooperation situation between China and Saudi Arabia. Saudi Arabia is one of the most important trade and economic cooperation partners of China in the West Asian and African regions, marking the key country of the “Belt and Road” construction and cooperation. In recent years, the China-Saudi Arabia trade and economic cooperation has enjoyed a rapid development. Saudi Arabia has become the biggest trade partner of China in the Arabic countries, the biggest source of imports of crude oil and the second biggest newly-signed contract project market.

In January-November 2015, the China-Saudi Arabia trade volume was US$47.66 billion, down 25.2% year on year. The Chinese export reached US$19.75 billion, up 6.4% year on year and the Chinese import reached US$27.91 billion, down 38.2% year on year. At the same time, China imported 46,090,000 tons of crude oil from Saudi Arabia, accounting for 15% of the import amount of China from the globe. In January-November, the contract value of the newly-signed contract projects of Chinese enterprises was US$5.37 billion, down 38% year on year. At present, there are more than one hundred Chinese-funded companies in Saudi Arabia with business in fields such as petrifaction, railway, housing construction, port, power station and telecommunication.

By the end of November 2015, the direct investment stock from China to Saudi Arabia was US$2.55 billion. At the same time, the direct investment stock from Saudi Arabia to China was US$1.517 billion. Besides, enterprises from both sides are positively discussing the cooperation in the fields such as finance, new energy and space technology.

The trade and economic cooperation situation between China and Egypt. Egypt is an important trade and economic cooperation partner of China in the West Asian and African regions, marking the key country of the “Belt and Road” construction and cooperation. In recent years, the China-Egypt trade and economic cooperation has enjoyed a smooth development. Egypt is the third largest export market of China in the Arabic countries and China is the biggest trading partner and the biggest source of imports of Egypt. In January-November 2015, the bilateral trade volume reached US$11.64 billion, among which Chinese export was US$10.75 billion, up 10.4% and 12.2% year on year respectively. Chinese enterprises undertook more and more projects in Egypt. In January-November, the contract value of the newly-signed contract projects in Egypt increased 95.2% year on year, reaching US$2.66 billion. Egypt has become the fifth investment destination of China in the Arabic countries. By the end of November 2015, the direct investment stock from China to Egypt reached US$690 million. The Suez trade and economic cooperation zone constructed and cooperated by China and Egypt has become a favorable platform for Chinese enterprises to invest and start businesses in Egypt after years of development.

The trade and economic cooperation situation between China and Iran. Iran is a significant trade and economic partner of China in the Middle East region all the time. China and Iran are politically friendly and economically complementary, which lays a solid foundation for the development of the bilateral trade and economic relationship. Especially in the recent years, China and Iran have overcome the influences of the adverse factors of international politics and economy and realized the steady development of the practical cooperation of bilateral trade and economy.

In 2015, affected by the factors such as the weak growth of the global economy and the continuously depressed price of bulk commodities such as crude oil, the China-Iran trade and economic cooperation was down. In January-November, the bilateral trade volume reached US$31.09 billion, down 34.6% year on year. The export to Iran was US$16.18 billion，down 26.6% year on year and the import from Iran was US$14.91 billion, down 41.65%. China imported 24,360,000 tons of crude oil from Iran, accounting for 8% of the import amount of China from the globe. The contract value of the newly-signed projects of China reached US$1.28 billion, down 59.4% year on year. By the end of November 2015, the non-financial direct investment stock of China to Iran was US$3.89 billion. Although the China-Iran trade and economic cooperation in 2015 shrank in different degrees, the friendly relationship, the complementarity in the economy and the great potential in cooperation decided that the trade and economic cooperation between the two countries will certainly enjoy a greater development space.

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

China Securities Journal: Engineering project contracting business in overseas markets has been an important part of the “go global” strategy. Figures released by the Ministry of Commerce show pretty good performance of Chinese companies in this field. But we do not see many reports about it by domestic media. Could you please share with us the 2015 update of this business?

Shen Danyang: Chinese companies engaged in overseas engineering project contracting have developed stronger in recent years. Their business portfolio has expanded from civil construction at the very beginning to higher valued-added segments such as general contracting, project financing, design and consulting, operation and maintenance services, etc. Total business revenue of Chinese companies has topped the global ranking except for particular years. They have contributed to world economic development for mutual-benefit and win-for-all results. China has helped some developing countries develop their own full-fledged industrial systems consisting of petro-chemical, power generation and transportation industries. Chinese companies also developed a large number of landmark constructions in these countries which promoted industrialization and economic and social development, created jobs and improved local people’s living standards.

65 or 26% of the top 250 contractors recorded in the ENR 2014 were from Chinese mainland. China Communications Construction Company, the largest among the recorded Chinese companies, saw its ranking rise from No. 9 in the previous year to No. 5. Total overseas business revenue of all the Chinese companies recorded in the ENR amounted to 89.7 billion US dollars, up by 13.5% from the previous year, and accounted for 17.2% of the entire global market outside China.

According to MOFCOM statistics, total business revenue of civil engineering project contracting business by Chinese companies was 154.07 billion US dollars, up by 8.2% year on year. It worth noting that there were many highlights in this business in 2015 which underpinned the “Belt and Road Initiative” and international cooperation of industrial capacity. For instance, the Orange Line under the Lahore rail transport project, a project that top Chinese and Pakistani leaders agreed on, is the first transport infrastructure project officially incepted under the “Belt and Road Initiative”. This project will strongly promote Chinese rail-transport standards, equipment and services to go to the international market. It will also deepen economic cooperation between China and Pakistan.

CCTV Business Channel: It is reported that the issue of China’s market economy status was on the agenda of the European Commission’s plenum, and the Commission said it would start a comprehensive review on China’s market economy status and the official opinion would be made public in the second half of this year. What does MOFCOM comment?

Shen Danyang: No matter how the Commission will review this issue and no matter what the opinion will be, the key of China’s concern is that according to Article 15 of the Protocol on China’s Accession to the World Trade Organization WTO members must abolish the surrogate practice against China no later than December 11th 2016. This is the international obligations that WTO members must follow.

We noted that the European Commission had internal discussions on this subject and we welcome serious efforts of the EU side. There are less than 11 months before the deadline set in the Article 15, and we urge the EU side to bear on mind the overall cooperation between China and the EU, follow its international obligations, and take necessary measures to ensure the Article 15 will be honored as scheduled and to promote the healthy and steady development of China-EU economic and trade relations.

Of course we also noticed that some EU industry organizations have been sensationalizing the so-called “huge, negative implications” of the abolishment of surrogate practice for local job market and economic growth. We believe these views can only represent the interest of certain European industries and cannot serve as the basis for policy making. After all, multilateral trading system is based on rules. Escaping from international obligations, no matter what the excuse is, will injure the multilateral trading system. Thank you.

Economic Information Daily: CPC Central Committee and the State Council recently issued the Outline of the Development of the Government by Law (2015-2020), in which law enforcement in the commerce sector is one of the priorities. What will MOFCOM do to execute the Outline?

Shen Danyang: The Outline of the Development of the Government by Law (2015-2020) identifies law enforcement in commerce sector as one of the priority work and puts forth clear requirements on enforcement procedures and approaches.

In order to execute the Outline and to implement the spirit of law enforcement reform highlighted at the third, fourth and fifth plenums of the 18th CPC Central Committee, the Ministry of Commerce and the State Commission Office of Public Sectors Reform jointly issued the Guidance on the Experimental Work of Comprehensive Administrative Enforcement in Commerce Sector. According to the Guidance, experimental comprehensive administrative enforcement in commerce sector will be carried out in Beijing and other nine cities from Shanxi, Heilongjiang, Jiangsu, Anhui, Fujian, Henan, Hubei, Guangdong and Guizhou, and in six areas closely relevant to people’s interests including recycling of scraped cars, auction, pawn, franchising, fair trade of retailers and suppliers and single-purpose pre-paid payment card.

The main purpose of this experimental reform is to, after one-year experiment in 2016, seek remarkable progress in areas like establishing a comprehensive enforcement system in commerce sector, enhancing enforcement capability, innovating regulatory mechanism and improving enforcement efficacy, to set up an administrative enforcement mechanism that has clear mandate and responsibility, articulately-defined practice standards, clear boundaries of jurisdiction and powerful guarantee for enforcement and is highly effective, and to work out the best practice that can be replicated and promoted to the entire country.

The Ministry of Commerce and the State Commission Office of Public Sectors Reform will strengthen supervision and guidance to ensure the success of the experimental reform and to lay a solid foundation for an enforcement and regulatory system that copes with China’s national reality, reflects the current stage of economic and social development, and fits the features of the commerce sector.

International Business Daily: The RMB experienced a violent fluctuation early this year. The PBOC has been taking radical moves to stabilize the currency in the past few days. My question is how will a highly volatile RMB impact China’s foreign trade and ODI? Thank you.

Shen Danyang: For foreign trade, the exchange rate of the RMB is a double-edged sword. We hope that the currency can be basically stable and gyrate based on market supply and demand. For more information, please contact the PBOC, SAFE and related businesses. Thank you for your question.

CRI: Foreign press reports that cheap Chinese steel products have hit the steel industry in Japan, US and the EU, which will urge China to address its excess capacity in steel and are considering binging charges to the WTO. Besides, ThyssenKrupp, Germany’s biggest steel company, has requested the EU to restrict steel imports from China. What is MOFCOM’s comment on that?

We have noted the reports. Regarding steel trade frictions, China always holds that effective solutions should be found through industry dialogue, exchanges and cooperation. Meanwhile, we encourage active capacity cooperation among the industries of various countries for common development and win win.

Notably, excess capacity is a common challenge facing the manufacturing sectors across the world in the course of economic globalization. Weak global economic recovery and inadequate or diminishing effective demand of the countries have directly led to the slump in the prices of commodities and related manufactured goods, which is the root cause of global excess capacity. In the face of hardship, the beggar-thy-neighbor trade protectionism, far from improving market climate, will only serve to further undermine the international trade order.

It also needs to be clarified that China doesn’t encourage steel exports. On the contrary, the Chinese government and industry take industrial restructuring and resolving excess capacity very seriously. Thanks to our hard work, the past year saw some initial results. The momentum of capacity growth in the steel industry has been basically contained. The self-regulating mechanism of market competition and environmental pressure has already squeezed some capacity out of the market.

Cosnews: You just mentioned that 2015 was an extraordinary year for China’s foreign trade. How was the shipping industry affected? When will this trough period come to an end?

Shen Danyang: You raised very important questions. Imports and exports have indeed a significant bearing on shipping companies. That said, I don’t want to take this issue head on. Taking this opportunity, I’d like to tell you that despite the grave situation of trade in the new year, foreign trade started to pick up last December. What does this mean? I’ll give you three points, which, though do not have a direct link to your questions, may help boost the confidence of the shipping sector.

First, the policy for stabilizing foreign trade is working. As we all know, the Chinese government attaches great importance to stabilizing foreign trade. Since last year, a series of policy measures have been introduced. MOFCOM, joined by many departments and localities, has rigorously implemented the policy. One example is the recently held National Import and Export Work Conference. What is the priority in policy implementation? It is to promote trade facilitation, sort out import and export fees, lower customs inspection rate and support new business models. None of these measures can show effect in one or two days. However, once successful, they can create an international and convenient business environment of rule of law for foreign trade, reduce the burden of businesses, unleash the vitality of market players and boost business confidence. It’s fair to say that business confidence is rising gradually.

Second, restructuring is advancing on a sound track. Despite the slowdown in foreign trade in 2015, restructuring continued to improve and made progress. The trend has continued into this year. The figures of Dec. 2015 show a clear picture. General trade grew 1.4%; private exports, 7.9%; and the export of electric and mechanical products, 0.2%.

Shen Danyang: This year, the outlook on foreign trade remains complex and grim. We mustn’t be overoptimistic about the Dec. figures. In fact, the seasonal factor is behind the intensive exports of the month. With the Spring Festival approaching, as everybody hoped to see a slight growth or a smaller contraction in exports of 2015, some exports of Jan. were advanced to the end of 2015. Therefore, the export data of Jan. may be less than brilliant. You can tell your readers that if exports fall a bit in Jan., they shouldn’t be pessimistic. They can remain confident about the bright future of the shipping industry.

In brief, in 2016 China’s foreign trade faces complex and grave domestic and international situations and huge downward pressure. Nonetheless, as long as we take a down-to-earth approach and a long-term view, accelerate the shift in motivation for foreign trade restructuring, and stay committed to foreign trade work in the new normal, we will be able to secure good results for this year’s exports. We hope to see good results for both stabilizing growth and restructuring, which also spell good news for shipping.

People.com.cn: Foreign trade improved unexpectedly in Dec. According to some analysis, that is attributable to the rise in carry trade based on the widening onshore-offshore rate differential after the Aug. 11th exhcnage rate reform. What is your take on that?

Shen Danyang: I don’t think that’s the case. Actually, I have partly answered the question. The anomaly in Dec. figures was down to the seasonal factor. Some exports of Jan. and Feb. were advanced. That’s the main cause.

21st Century Business Herald: China’s Wanda Group recently announced the plan to buy Hollywood’s Legendary Entertainment, which was an epitome of Chinese enterprises’ M&A activities in 2015. Can you give us an overview of the situation? Another question. Statistically, China’s FDI inflow growth rate dropped by 5.8% in December from the same period last year, which was the first year-on-year decline since last year. What are the main reasons? Some are attributing that to RMB devaluation and accelerated capital outflow. How do you look at this? Thank you.

Shen Danyang: I’ll start with the second question. We need to look hard into the reasons of negative growth in FDI inflow in December. According to our preliminary analysis, there are two factors. First, the technical factor: the base figure of last year was relatively high; second, it is the businesses’ response to exchange rate fluctuation in China and elsewhere and the turbulences in the international financial market.

Now back to your first question. We have noticed Wanda’s decision to buy Legendary Entertainment, an American company. M&A has become an important way of Chinese companies’ investment abroad. In 2015, despite the sluggishness in the international market, Chinese companies still acquired foreign business in large numbers and in a wide range of industries. A number of major deals were made, such as China Tire & Rubber Co.’s acquisition of Italy’s Pirelli Group, Unis Group’s takeover of an American company, Western Digital Co. and Three Gorges International Energy Investment Group’s purchase of Brazil’s Parana Energy Share Holding Group, all of which were worth over USD 1 billion. In particular, China Tire & Rubber Co. acquired 60% of Pirelli’s equities worth 4.6 billion euros, making it China’s largest overseas M&A deal in 2015.

According to preliminary statistics, Chinese companies hammered out 593 M&A deals overseas in 2015, amounting to USD 40.1 billion (including overseas financing), of which USD 33.8 billion was in direct investment, accounting for 84.3% and covering almost all sectors of the national economy. I understand that you are all quite interested in China’s overseas M&A deals in 2015. We will release relevant information in the Statistical Report on China’s Outbound FDI 2015. Thank you.

Guangming Daily: The European Commission issued a notice on January 7th, terminating partial interim review of anti-dumping and countervailing measures against solar panels from China. How does MOFCOM look at this? Can you give us more detailed information?

Shen Danyang: China and the European Commission reached a price undertaking agreement concerning China’s solar panel exports to Europe in August 2013. The agreement sets a minimum price on China’s solar exports, which is benchmarked against the average international price collected by Bloomberg Data. Following the settlement, Europe’s solar industry accused Chinese companies of lowering the benchmark by declaring lower prices to Bloomberg Data and petitioned to the European commission to exclude Chinese solar-panel prices from the benchmark.

With the initiation of interim review, the investigating bodies from MOFCOM and the European Commission have maintained close communication and had repeated consultations over price adjustment in the price undertaking. Through investigation, the European Commission came to the conclusion that price changes in China’s solar products were consistent with those in the international market and the current minimum price benchmark reflected price changes in the global solar products. On January 7, the European Commission issued an official notice, terminating partial interim review of anti-dumping and countervailing measures. China believes that through de facto and judicial investigation, the European Commission’s decision to terminate the investigation will help protect the legitimate rights and interests of Chinese solar enterprises and maintain the overall stability of the price undertaking agreement. We welcome this decision.

CBN TV: We noticed the decline in both the number and value of overseas trade remedy investigations against China. Does it mean that the negative impact of trade friction on China has been allayed? Thank you.

Shen Danyang: It’s true that China has seen a drop in terms of both the number and value of trade remedy cases against itself, but this does not mean that the impact of trade friction on China has been eased.

First, in terms of the timeline of trade friction, its negative impact often lasts for years. After all, China has been the NO. 1 country against which anti-dumping investigations are launched for 21 consecutive years and against which countervailing investigations are launched for 10 successive years. Take the period from 2011-2015 as example, the average annual value of cases against China was around USD 11 billion and the total reached USD 55 billion in cumulative terms. The minimum implementation period of foreign remedy measures is five years, but most measures are actually in effect for 10 years or longer, which has a very adverse impact on China’s export growth and affects USD 140 billion to USD 150 billion worth of trade every year.

Second, trade remedy measures target individual products, but in reality, an entire industry may suffer, which in turn affects related upstream and downstream industries. Current international trade protectionist practice mainly targets Chinese products, which causes Chinese exporters to have second thoughts on expanding into the international market. Those Chinese industries bearing the brunt of trade friction include labor-intensive industries, such as steel and the light industry and high value-added industries such as machinery, electronics and chemical industry. A large number of businesses are involved, causing job losses and weakened competitiveness.

Third, the use of discriminatory rules such as “surrogate country price” has artificially increased anti-dumping and countervailing duties and the difficulties for Chinese companies to respond to litigations. Every year, Chinese companies put in a great deal of human and financial resources to defend themselves in the cases. If the export is blocked, it will be much more difficult for them to reshuffle their production.

In a nutshell, the twin decline in both the number and value of trade remedy cases does not mean the negative impact of trade friction on China is alleviated. Thank you for your question.

China News Service: It is said that in 2015, MOFCOM further promoted international cooperation on production capacity and equipment manufacturing. What measures have you taken? Are there any progress?

Shen Danyang: In 2015, to enhance international cooperation on production capacity and equipment manufacturing, MOFCOM, along with relevant agencies, adopted a string of measures: first, we streamlined administration and delegated power to advance facilitation. We settled an administrative model for overseas investment, which features a combination of “filing and verification”. This further energized businesses to invest overseas. Second, we pushed forward the Guidelines for international cooperation on production capacity and equipment manufacturing. Through foreign trade special fund, concessional loans, medium-to-long term export credit insurances, we prioritized the investment cooperation on advanced manufacturing and competitive industries. Third, we guided the implementation of a group of major overseas infrastructure projects including railway, highway and nuclear power, as well as overseas trade and economic cooperation zone. Fourth, we strengthened guidance on country-specific investment, implemented the inter-governmental guarantee mechanism, and signed FTAs, investment treaties, investment protection treaties and tax agreements with relevant countries and regions. We strengthened risk alert and emergency management.

In 2015, international cooperation on production capacity and equipment manufacturing progressed rapidly and registered positive outcomes. China’s competitive industries, such as transport, electricity, and communications, made a cumulative investment of USD11.66 billion, up by 80.2% year on year. Equipment manufacturing made a direct investment of USD 7.04 billion, up by 154.2%. In the same period, major complete equipment exports grew by 10% year on year.

In addition, by the end of 2015, Chinese enterprises were advancing 75 cooperation zones, over half of which are processing and manufacturing parks that are closely related to production capacity. These enterprises made a cumulative investment of USD7.05 billion; 1,209 enterprises entered the zones; the cooperation zones registered gross product of USD 42.09 billion, and contributed USD1.42billion taxes and fees to host countries. They also drove part of the overseas relocation of classical competitive industries such as textile, clothing, light industry, and home appliances.

Commercial Radio Hong Kong: It is reported that China’s foreign trade progressed in many ways. But statistics show import and export both declined. Could you please explain how the export decreased?

Shen Danyang: There are several reasons for the decrease. First, by trade types, processing trade registered a sharp decline in import and export. Last year, processing trade export was USD 797.8 billion, down by almost 10%. Processing trade used to take a large share in export, around 40 % or even 50%. In 2015, it dropped to 35%. If it hadn’t dropped by 10%, the share would have been bigger. Second, by product, traditional labor-intensive products saw a considerable decline. Export of machinery and electric products and capital goods did not decrease. But traditional labor intensive products, such as light industry and textile consumer goods, slipped due to changes on the international market.

Third, by market players, private companies exported more, while other non-private players, including SOEs, foreign-funded enterprises, and enterprises with hybrid ownership witnessed decline of both export and import. Export from SOEs dropped by 5.5% year on year; foreign enterprises, by 0.5%. A major cause for less export from foreign enterprises is the decline of processing trade, which used to be mainly produced and exported by foreign enterprises. Another reason is that more foreign investment went to service sector rather than manufacturing in recent years. These are the two factors for export decline from foreign-funded enterprises.

Fourth, by markets, China’s export to Russia and Brazil slumped by a relatively large margin. The export to Russia slid by 35.2%; to Brazil, by 21.4%. What is the reason? These countries have a marked decline of demand due to difficulties in their economies. Export to the EU, Japan and Hong Kong also slipped. Domestically, export from coastal and western areas dropped, while that from central China grew fast. This is the general picture. Thank you for your question.

Shen Danyang: This is the end of the conference. Thank you.