Friends from the media, good morning:

Welcome to the press conference today. I will brief you the situation of business performance in January 2016, and answer the questions of your concern.

I. Market performance

In January, the domestic consumer market realized a steady growth. The sales of the key retail enterprises monitored by the Ministry of Commerce were up 6.5% year on year. Because of the approaching of the Spring Festival, the sales of part of the consumer goods increased remarkably. The main features were as follows:

1. Online sales maintained a rapid growth, and the growth of traditional business increased. In January, the sales of online retail enterprises monitored by the Ministry of Commerce were up 34.5% year on year, and those of the shopping centers, supermarkets, department stores and special stores were up 11.9%, 9.6%, 5.5% and 3.5% respectively year on year, 1.8, 1.0, 2.1 and 2 percentage points higher than those of last month respectively.

2. The sales of food and cloths speeded up, and the consumption for travel picked up. In January, the sales of food and cloths of key retail enterprises monitored by the Ministry of Commerce increased 14.4% and 9.5% respectively, 4.9 and 6.7 percentage points higher than those of last month; the sales of automobile went up 5.5%, 3.4 percentage points higher than those of last month; that of petroleum and the products went down 9.7% with a decrease of 9 percentage points. According to the statistics of the National Information Union of the Passenger Car market, the sales of passenger car in narrow sense increased 11.2% year on year, among which, the sales of SUV witnessed a rapid growth of 64%.

3. Service consumption was still hot. In January, the sales of key catering enterprises monitored by the Ministry of Commerce went up 6.4% year on year; the film box-office earnings reached RMB 3.85 billion with the growth rate approaching 50%. The scale of tourist market continued to expand, and the excursion around the cities themed on taking spring, skiing and folk custom became the highlights of the market before the Spring Festival.

4. Food price continued to pick up. Affected by the low temperature and the freezing rain and snow weather, as well as the approaching of the Spring Festival, the price of agricultural products in 36 large and medium size cities in January was up 3.2% year on year, enjoying an increase for 3 consecutive months, and up 2.6% month on month. Among these, the price of vegetable, pork and fruits went up 6.4%, 3.9% and 1.3% respectively month on month.

II. Foreign Trade

Affected by the weak foreign demands and decrease of import and export price, in January, China’s total import and export reached RMB 1.88 trillion, down 9.8% year on year (the same below). Among them, the export was RMB 1.14 trillion, down 6.6% year on year, and the import was RMB 0.74 trillion, down 14.4% year on year. The trade surplus was RMB 406.2 billion, up 12.2%. With the price factor excluded, the decrease of that of import and export, of export and of import was slowed down to 0.9%, 0/5% and 1.5% respectively. The foreign trade presented the following features:

1. The proportion of general trade increased. The import and export of general trade was RMB 1.0806 trillion, down 9%, 0.8 percentage points lower than that of the total trade, and accounting for 57.4% of the total import and export, up 0.5 percentage points year on year. The import and export of the processing trade was RMB 533.8 billion, down 14.5%. The import and export of the other trades was RMB 266.8 billion, down 2.7%.

2. The import and export of private enterprises witnessed a growth against the trend. The import and export of private enterprises was RMB 782.7 billion, up 1.5%, accounting for 41.6% of the total import and export, up 4.6 percentage points year on year. Among them, the export and import of the private enterprises were up 1% and 2.8% respectively.

3. The import and export with the U.S. and the EU decreased, and export to part of the surrounding regions maintained the growth. China’s import and export with the U.S., EU and Japan was down 9.9%, 9.9% and 6% respectively, among which, the export was down 5%, 7.4% and 0.5% respectively. The export to part of the surrounding regions enjoyed a good trend. The export to India, Australia, Hong Kong and Russia was up 9.8%, 4.8%, 2.8% and 0.9% respectively.

4. The export of labor intensive products was better than the overall. The import volume of major bulk commodities increased but the price dropped. The export of seven kinds of labor intensive products reached RMB 266.5 billion, down 1.3%, 5.3 percentage points lower than the overall. Among them, the export of toys, textile and plastic products increased 17.6%, 2.5% and 1.2% respectively. The export of mechanical and electrical products was RMB 632.7 billion, and that of high-tech products was RMB 294.2 billion, down 6.8% and 4.7% respectively. The import volume of major bulk commodities increased but the price dropped. The import volume of rubber, copper ore, natural gas, refined oil, copper products and iron ore went up 30%, 28.1%, 22.3%, 13.3%, 5.3% and 4.6% respectively, and the import price went down 21.2%, 20.4%, 32.4%, 29.6%, 19.5% and 32.4% respectively. Because of the price drop, the six products dragged the overall import growth down by 3.1 percentage points.

5.The foreign trade in eastern China decreased slightly and certain parts of central and western China saw rapid growth. The imports and exports of eastern China reached RMB1.5835 trillion, down 9%, 0.8 percentage point lower than the national total. Among these, the exports of eastern China fell down 4.3% while those of Fujian and Guangdong grew up 1.7% and 0.6% respectively, 0.5 and 1.9 percentage points higher among national total exports year on year. The imports and exports of central China reached RMB138.7 billion and that of western China reached RMB159 billion, down 14.6% and 13.7% respectively. Among these, exports of central and western China decreased 16.3% and 16.4% respectively; exports of Guizhou, Ningxia, Hubei, Inner Mongolia and Chongqing maintained a growth of at least two digits.

III. Foreign Investment in China

In January, 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 actual utilized FDI sustained steady growth. In January, a total of 2008 newly-established foreign-invested enterprises were approved, going down 11.4% year on year. The actually utilized foreign capital reached RMB 88.25 billion, up 3.2% year on year (excluding the data of bank, security and insurance, the following are the same).

2.The investment from major countries and regions maintained a steady growth. In January, the actually utilized FDI from the top ten countries and regions totaled RMB84.38 billion, up 2.6% year on year, taking up 95.6% of the national total. The investment from US, EU and Japan stood out with an increase of 463.6%, 30.9% and 22.8% respectively while those from ASEAN, countries along the “belt and road”, and Hong Kong decreased 6.1%, 25.1% and 28.6% respectively.

3.The industrial structure of foreign investment was further optimized. In January, the actually utilized FDI in service sector was RMB 59.62 billion, up 5.7% year on year, taking up 67.6% of the national total. Among these, that in hi-tech service sector reached RMB7.2 billion, up 123.4% year on year while that in real estate continued to drop. Its number of newly established enterprises and actually utilized FDI decreased 34.1% and 24.6% respectively. The actually utilized FDI in manufacturing was RMB22.32 billion, down 8% year on year, taking up 25.3% of the national total. Among these, the utilized FDI in special equipment manufacturing and transport equipment manufacturing grew up 44.4% and 5.6% respectively. That in agriculture, forestry, husbandry and fishery stood at RMB660 million, up 15.2% year on year, taking up 0.8% of the national total in manufacturing.

4. Both the enterprises quantity of foreign M&A and size of FDI attraction improved. In January, a total of 114 newly-established foreign-invested enterprises by M&A were approved and the actually utilized FDI reached RMB34.36 billion, going up 6.5% and 15.7% respectively year on year. The percentage that M&A took up among the national total has risen to 38.9% from 34.7% over the same period of last year.

5. Western China’s attraction of FDI grew remarkably. In January, the actually utilized FDI in western China reached RMB5.87 billion, going up 16.9% year on year. The actually utilized FDI in eastern China stood at RMB78.2 billion, up 4.1% year on year. That in central China was RMB4.18 billion, down 22.2% year on year.

IV. China’s Investment and Economic Cooperation Overseas

Under the guideline of the “belt and road” initiative and international capacity cooperation, China’s investment and economic cooperation overseas sustained a rapid growth and had a good start. According to the statistics by MOFCOM, ,the non-financial direct investment made by the Chinese investors in January reached RMB78.76 billion (excluding the influence of foreign exchange), going up 18.2% year on year, making a good start for China’s investment and economic cooperation overseas this year. The main characteristics are listed as follows:

1.Nearly 90% investment flew to manufacturing. In January, RMB10.6 billion investment flew into manufacturing, up 87.8% year on year. It mainly mainly flows to computer/communications and other electronic equipment manufacturing, medicine production, metal products manufacturing, and auto manufacturing. Among these, RMB5.5 billion flew to equipment manufacturing, taking up 51.9% of manufacturing investment, going up 128.3% year on year.

2.The delivery of the inter-annual merger and acquisition projects was active. In November 2015, China Three Gorges successfully obtained 30-year franchise rights of Brazilian Jupiá hydropower station and Ilha Solteria hydropower station at the price of 13.8 billion BRL (about US$3.7 billion) in the open auction conducted in the stock exchange of St. Paulo, Brazil. On January 5, the project of the franchise rights of these two hydropower stations was officially completed the delivery. After the deal, the controllable installed capacity and the installed capacity of rights and interests of China Three Gorges reached 6 million kilowatt. China Three Gorges becomes the second largest private power generation enterprise in Brazil and will make positive contribution to the power generation development and the economic construction of Brazil.

3.The role of local enterprises was prominent. In recent two years, the role and status of local enterprises in China’s foreign investment has been increasingly prominent. The proportion of the investment from local enterprises accounted for 51% and 66.4% of the total foreign non-financial investment in 2014 and 2015 respectively. Especially, the foreign investment of local enterprises in 2015 registered 488.06 billion RMB, reaching the highest level on record and realized 73.7% of the high-speed growth. In January, the foreign direct investment of local enterprises was 72.87 billion RMB, with an increase of 175.2% year on year, accounting for 92.5% of the total foreign direct investment of China.

4.Chinese enterprises still had strong passion for the investment in the United States. Based on the investment of Chinese enterprises to the United States reaching a new record in 2015, the investment to the United States reached 10.22 billion RMB in this January, 3.9 times over the same period last year. At the same time, the sum of the on-going merger and acquisition project exceeds billions of dollars. For example, Haier acquired the GE appliance business at the price of US$5.4 billion, Dalian Wanda Group acquired the Hollywood Legendary Pictures at the price of US$3.5 billion, etc. It is predicted that the investment to the United States will continue to maintain an increase momentum this year.

In January, Chinese foreign investment played a positive role in driving the growth of the world economy and promoting the mutual benefit and win-win result. At present, China’s foreign investment flow ranks the 3rd in the world and the stock ranks the 8th, which not only creates the employment and tax revenue, promotes the transformation and upgrading of relevant industries, improves the infrastructure conditions, but also makes positive contributions to setting examples for developing countries to realize common development and deepen the bilateral relationship.

V. Progress about China’s First Holding the Post of the Presidency of the G20

On December 1 2015, China officially took over the presidency of the G20 and the relevant series of conferences of all channels were successively started. MOFCOM is the domestic leading organization of the G20 trade and investment cooperation. MOFCOM will hold the G20 Trade Ministers Meeting in Shanghai on July 9-10 and hold three trade and investment working group conferences before this trade ministers meeting.

At present, the global trade growth is slow and the engine function of the economic growth is week. The members of the G20 have strong willingness to strengthen the trade and investment cooperation. Against such a background, at the initiative of China, the leaders of the G20 requested the trade ministers to regularly hold conference and agreed to set up supportive working group in 2015.

In order to implement the instruction of the leaders of the G20, China initiated to set up the G20 trade and investment working group this year and held the first official meeting in Beijing on January 28-29 after the establishment of the working group. 34 delegations including the official members of the G20, honored guests and international organizations participated in this meeting. All parties conducted deep discussions on the various results and initiatives proposed by China. They reached broad consensuses on the agenda setting of the trade and investment and the direction of the results in the whole year. In this April and July, China will hold the second and the third working group meetings in Nanjing and Shanghai successively and lay a solid foundation for realizing positive and practical results in the trade ministers conference in July and Hangzhou Summit in September.

China hopes that all parities can conduct deep discussions on topics such as strengthening the construction of the G20 trade and investment mechanism, promoting the increase of the global trade, supporting the bilateral trade system, promoting the coordination and cooperation of the investment policies and promoting the inclusive and coordinative global value chain. Besides, China strives to realize three major goals: firstly, efforts should be made to strengthen the cooperation in the field of trade and investment of the G20, to promote the process of the mechanism of trade ministers’ conference and to enable the G20 to play a greater role in the governance of the global trade and economy. Secondly, efforts should be made to make more contribution to supporting the multilateral trade system, including objecting to the protectionism, strengthening the coordination between the regional trade agreements and the multilateral trade system and discussing the development direction of the multilateral trade system after the Nairobi conference. Thirdly, efforts should be made to promote the global trade and investment to restore strong increase, and to strive to formulate cooperative initiatives such as the global trade increase strategy, global investment cooperative framework, strategy and plan of the capacity construction of the global value chain.

China will work with all parties to make joint efforts to strive to submit a fruitful list of trade and economic achievements to the G20 Hangzhou Summit.

The above is the major situation in today’s press conference. Now, you are welcome to ask any questions.

CCTV: It is reported by some foreign media that the EU plans to conclude the Transatlantic Trade and Investment Partnership (TTIP) negotiations with the United States before President Obama’s term ends. To this end, EU member states plan to hold several rounds of talks with a view to coming up with a consolidated text covering all topics, and to put aside temporarily sensitive issues such as agricultural quotas. What is MOFCOM’s comment on this?

Shen Danyang: The Chinese side has been following the TTIP negotiations, which have been held for eleven rounds so far, covering areas such as market access, services, investment and intellectual property.

The US and EU represent an economic aggregate of close to USD 33 trillion, more than USD 8 trillion of total foreign trade, nearly USD 11 trillion of inward FDI and over 800 million population, accounting respectively for 47%, 28%, 53% and 12% of the world’s total. In terms of the size of the economy, the TTIP, once established, will surpass the NAFTA, TPP and RCEP to become the world’s largest FTA, with major implications for the global politics, economic landscape and rulemaking.

During the past eleven rounds, the US and EU have discussed most of the areas, exchanged two rounds of tariff concession offers that cover 97% of the tariff lines. They have also reached consensus on the arrangement for the request and offer exchange in services, investment and government procurement. However, we have noted that the two sides still remain pretty far apart in areas such as trade in goods, trade in services, investment and regulatory coherence. Therefore, it is natural that the two sides would like to speed up the pace of negotiations and strive to achieve substantive progress.

As for any free trade arrangement that is in the interest of global trade liberalization and regional economic integration, the Chinese side remains open as long as it upholds the open and transparent principle. In other words, we have always been for the view that free trade arrangements of any region or type shall be transparent, open and inclusive, and can create a freer and easier environment for global trade, thus improving the welfare of people across the world. Such is also our attitude towards the TTIP. Thank you for your question.

CCTV-NEWS: Question No. 1, recently, the EU instituted a trade remedy investigation into Chinese steel products and imposed interim anti-dumping measures against screw-thread steel from China. What are MOFCOM’s comments on that? Question No. 2, a Chinese agro-producer will reportedly invest over USD 300 million in a sugar plant in Cambodia, which is expected to create 4000 jobs. Another four Chinese companies are planning to invest in power and fertilizer plants in the country. As Chinese investment in Cambodia grows, what’s MOFCOM’s take on China-Cambodia commercial relations? The third question is that as Mainland-Hong Kong trade bucks the trend, criticisms of carry trade have resurfaced. What’s MOFCOM’s response to that? Thank you.

Shen Danyang: Regarding your first question on EU announcement of new tariff on Chinese screw-thread steel, the EU initiated an anti-dumping investigation into Chinese screw-thread steel in Apr. 2015, to which Chinese businesses responded actively. The tariff rate in the preliminary ruling is relatively low among recent cases, which indicates a modest degree of dumping. Excess capacity is a common challenge facing the steel industry globally. The Chinese government and industry are committed to accelerating industrial restructuring and resolving excess capacity with initial results. The momentum of capacity growth in the steel industry has been basically curbed. Self-regulating mechanisms such as market competition and environmental pressure have prompted the exit of certain capacity. It is hoped that the EU will join China’s efforts to step up commercial cooperation and exchanges so as to provide more opportunities for their respective industries and jointly tackle global excess capacity, rather than blindly resort to trade protection and further compromise the development environment and trade order of the global steel industry.

To your second question on Chinese investment in Cambodia, so far, I haven’t received any report on what you just mentioned. That said, it is safe to say that be it in Cambodia or other countries, the active going global drive of Chinese companies, benefiting local economy and employment, is supported by the Chinese government and welcomed by related countries. It is believed that the going global of Chinese business, including its cooperation with Cambodia, will go from strength to strength.

As for the third question, we’ve noted related media commentaries. In January, Mainland imports from Hong Kong shot up by 108%. Some suggest this is down to the resurgence of carry trade caused by capital outflows. We believe that such conclusions and conjectures shouldn’t be made randomly without careful inquiry and analysis or the support of data and cases. The jump of 108% last January seems extraordinary, but if the baseline of USD 790 million of last year is considered, it is hardly a case for alarm. Given the huge Mainland market, which is actively expanding imports, a slight increase in its imports from Hong Kong of gold and other consumer goods on top of a low base figure will push up the growth margin markedly. The talk of capital flight doesn’t necessarily hold water. After all, China’s FDI utilization experienced a boom, not a slump in January. According to SAFE, China’s BOP remains solid and the foundation for continuous depreciation of the RMB is missing given the sound fundamentals of the Chinese economy and domestic market. Therefore, the so-called capital exodus doesn’t exist. Thank you.

China News Agency: The WTO ruling last month said that the EU’s anti-dumping investigation against Chinese fasteners violated WTO rules. We noted that foreign media reported that the EU would remove its anti-dumping measures within three weeks and the European Commission will submit the plan for member states to discuss. What are your comments?

Shen Danyang: We have noted foreign media reports on this issue, but have not confirmed this with the European Commission. If what you said is true, this represents a correct step for the EU to implement its WTO obligations and avoid trade retaliation as much as it can. We welcome this development and hope the EU will conclude its internal procedures and revoke its anti-dumping measures on Chinese fasteners as quickly as it can.

Seven years’ into the dispute, the WTO Appellate Body ruled again on January 18th that the ongoing EU anti-dumping measures on Chinese fasteners violated WTO rules and the Appellate Body approved the verdict report on February 12. According to WTO rules, China has the right to ask for the mandate to retaliate from the WTO. Therefore, to safeguard the interests of the Chinese industry, China reserves the right to take further actions under the WTO dispute settlement framework and hopes the EU will take immediate actions to avoid retaliation. China wants to see early resolution of the 7-year-long dispute on fasteners and normal two-way trade on relevant products restored as quickly as possible to the benefit of healthy development of China-EU commercial relations.

Thank you.

Shanghai Securities News: China Chamber of Commerce for Import and Export of Textile and Apparel recently reported that Chinese textile and apparel exports to the US increased nearly 7% in 2015 under very challenging circumstances. Would China continue this momentum this year? Thank you.

Shen Danyang: In 2015, China’s overall textile and apparel export reached US$283.78 billion, a year-on-year decline of 4.9%, while Chinese export in this sector to the US increased by nearly 7%. This is a hard-won achievement and welcome news.

We certainly hope that export to the US in 2016 will maintain strong growth momentum as China is competitive in textile and apparel sector. However, we face notable challenges. First, due to sluggish global economic recovery, weak international demand and growing cost in factors of production in China, China’s overall textile and apparel export has been declining and growth in its export to the US has slowed down. For example, the EU’s textile and apparel import declined by 8.8% and that of the US increased by only 4%. Second, some industries and orders have been diverted to low-cost countries in Southeast Asia and South Asia, leading to rapid rise of textile and apparel industries in China’s neighboring countries and squeezed US market for Chinese exporters. Third, some countries have substantially devalued their currencies which means the RMB has become more expensive and Chinese products less price competitive. Therefore, we must work harder to make textile and apparel export to the US continue to grow.

Thank you.

Economic Daily: Last year, Africa experienced significant difficulties in economic development and some international critics are putting the blame on the slower Chinese economy. Some even allege that the “Ten Cooperation Plans” pledged by China at the Johannesburg Summit of the Forum on China-Africa Cooperation will add to the debt burden of African countries. How do you comment on that? Thank you.

Shen Danyang: The slowdown in economic development in Africa has multiple reasons. Internally, the continent was handicapped by worrying security situation and weak found of development; but mostly, it was affected by external changes, including the tumbling international commodities prices, and outflow of global capital back to developed economies. These external factors have led to less fiscal and export revenue, major fluctuation in some currencies and rising public debt across Africa. Given that Africa’s main export is raw materials, it has taken the brunt of the falling commodities prices. And to make things even worse, a lot of investors from developed countries decided to divest from Africa.

Over the years, China has been committed to improving livelihood and infrastructure in Africa. It has helped build over 1000 complete sets of projects across the continent. It has been a devoted participant in and contributor to social development in Africa. China has been Africa’s largest trade partner for 7 consecutive years and over 3000 Chinese companies have invested in Africa. These are hard facts. What China has done for economic and social development in Africa is there for all to see and can stand to be tested by history.

In 2015, China’s economy grew by 6.9%, making it a primary source of growth for both the world and Africa. Despite the decline in the value of China’s import from Africa due to falling commodities prices, China remains a major export market for Africa. Chinese companies saw steady growth in terms of both the contractual value and revenue of projects in Africa, reaching USD 76.2 billion and USD 54.7 billion respectively. This is also good for Africa’s economic growth.

Last December, President Xi Jinping announced the “Ten Cooperation Plans” and pledged USD 60 billion at the Forum on China-Africa Cooperation, which fully demonstrates Chinese government’s support to Africa and has been widely praised by African countries and the international community. A considerable portion of the USD 60 billion is used to set up funds for assistance and investment cooperation, with a view to improving Africa’s capability for independent development instead of adding to its debt burden. China will continue to improve the terms of concessional loans to ease the financing pressure on African countries. I believe, with the implementation of the “Ten Cooperation Plans”, China and Africa will see more opportunities and a bright prospect of cooperation.

Thank you for your question.

China Radio International: There was report saying that Ukraine’s export of agricultural products to China tripled in 2015. Is it true? Can you please brief us the relevant situation of China-Ukraine agricultural trade? Thank you.

Shen Danyang: With high complementarity in agriculture, China and Ukraine enjoy big potential in agricultural trade. Last year China’s import of agricultural products from Ukraine witnessed a relatively rapid growth. However, it varied with different products, so we can not vaguely say that import had tripled. According to the statistics of China Customs, in 2015 China imported USD 1.717 billion worth of agricultural products from Ukraine, a year-on-year increase of 125.3%. In breakdown, the import of maize stood at USD 877 million, an increase of 239.9% compared with the previous year, accounting for 79.2% of China’s total maize import; the import of sunflower oil from Ukraine was USD 514 million, a year-on-year increase of 20.8%, representing 90.4% of China’s total sunflower oil import. China will continue to create a favorable environment for sound and orderly development of agricultural trade and investment as well as economic and technological cooperation between China and Ukraine.

Thank you for your question.

Yicai: According to Wall Street Journal, China National Chemical Corporation (ChemChina) came to a deal to purchase Syngenta, the Swiss pesticides and seeds giant at USD 43 billion, which is by far the biggest overseas transaction for a seed company. What’s MOFCOM’s comment on this? Thank you.

Shen Danyang: We have noticed this news. Based on our knowledge, ChemChina and Syngenta reached an agreement on the takeover. The board of directors of Syngenta unanimously recommended the 100% takeover by ChemChina at USD 465 per share. We believe this takeover will enable the two parties to complement each other, form synergy and achieve common development. At the same time, it will also have a positive influence on global food security.

We support ChemChina to undertake the purchase according to established international commercial rules, act in strict accordance with local legislation, and make active contribution to the local community and economy. At the same time, we also hope other countries could view this takeover objectively and rationally. Thank you for your question.

China Daily: According to latest statistics, in January US investment in China grew by 463.6%. How do you account for such a big increase? Thank you.

Shen Danyang: There are two reasons behind the big increase of US investment in China. First, the baseline in the same period last year was relatively low. In January 2016, actual US investment reached RMB 4.717 billion, while it was only USD 837 million in January last year. Second, as China continues to open up, US companies remain optimistic about the Chinese market. In terms of industries, the increased US investment mainly focused on manufacturing, transportation, storage and postal service, information software, leasing and commercial service and scientific research.

Thank you for your question.

Shen Danyang: This is the end of today’s press conference. Thank you.