Friends from the media, good morning.

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

I. Market performance

In April, the domestic consumer market presented a steady growth trend. The retail sales of consumer goods reached RMB 2.46 trillion, going up 10.1% year on year, 0.1 percentage points higher than that of the same period last year and the actual growth was 9.3% with the price factor excluded. The growth of the total retail sales of consumer goods in January-April was up 10.3% year on year. The monthly growth rate of the sales of 5,000 major retail enterprises monitored by the Ministry of Commerce has picked up for two consecutive months. The main features are as follows:

1. The proportion of online retail was further promoted. The online retail sales of physical commodity continued a good growth trend, and up 25.6% year on year in January-April. Its proportion in the retail sales of consumer goods increased to 11.1%, up 0.5 percentage points compared with that of the first quarter.

2. Catering revenue increased quickly. In April, the national catering revenue was up 11.6%, 0.2 percentage points higher than that of last month. Among that, the revenue of the enterprises above the designated size was up 8.0%, up 0.8 percentage points.

3. Sales of goods for housing and basic living accelerated. In April, sales of household appliances, furniture and building materials of enterprises above the designated size was up 9.1%, 17.1% and 17.3% respectively, up 3.1, 1.2 and 1.7 percentage points respectively compared with those of March. Sales of food, clothing and daily necessities were up 12.1%, 7.3% and 12.7% respectively, up 0.4, 2.9 and 0.5 percentage points respectively.

4. The Upgraded goods enjoyed a hot selling, and fashionable household appliances were welcomed. In April, the sales of 4G cellphones, ultrahigh 4K TV and doubled-door refrigerator of the enterprises monitored by the Ministry of Commerce was up 10.4%, 12.6% and 9.5% respectively year on year,12.3, 11.5 and 9.2 percentage points higher than those of all the cellphones, TVs and refrigerators.

5. Consumer price remained steady, and the price of vegetable decreased. In April, CPI was up 2.3% year on year, the same as that of March and 0.8 percentage points higher than that of the same period last year. According to the monitoring of the Ministry of Commerce, the price of farm products in 36 large and medium size cities was up 10.5% year on year, 0.7 percentage points slower than that of March, and down 1.5% month on month. Among these, the average wholesale price of 30 kinds of vegetable was down 10.1% compared with that of March; and the price of pork was up 2.9% month on month.

II. Foreign Trade

According to the Customs statistics, China’s total import and export in January-April reached RMB 7.1671 trillion, down 4.4% year on year. Among these, the export was RMB 4.13736 trillion, down 2.1%; the import was RMB 3.20974, down 7.5%. The monthly export in April was up 4.1% and the import down 5.7%. In terms of US dollars, in January-April, China’s total import and export reached US$ 1.10206 trillion, down 9.8%. Among these, the export was US$ 636.63 billion, down 7.6%; the import was US$ 465.43 billion, down 12.8%. In April, the export was down 1.8% and the import 10.9%. The foreign trade in April presented the following features:

1. Export enjoyed positive growth for two consecutive months. In April, China’s export continued to increase. The growth rate was 14.6 percentage points slower than that of March, but still enjoyed a month-on-month growth of 7.2%.

2. The export to the traditional markets was stable again. In April, China’s export to ASEAN, EU and ROK was up 12.6%, 9.7% and 3.8% respectively, and the export to the U.S. and Japan was down 3.8% and 6.2% respectively. The export to countries related to Belt and Road continued to grow, and the export to Philippines, Thailand and India also increased.

3. The export of general trade maintained a positive growth for two consecutive months. In April, the export of general trade was up 8.1%, and its proportion in the total national export was up by 2.1 percentage points. The export of processing trade was down 8.2% with a negative growth for 14 consecutive months while dragging the total export down by 2.9 percentage points.

4. The export of labor intensive products was better than that of the mechanical and electrical products. The export of seven kinds of labor intensive products reached RMB 232.7 billion, up 11.8%, and 7.7 percentage points higher than the whole export amount. Among these, the export of toys, plastic products and bags was up 22.7%, 17.3% and 16.9% respectively. The export of mechanical and electrical products reached RMB 649.9 billion, up 3%. The export of high-tech products reached RMB 310.7 billion, up 0.8%.

5. Private enterprises became the major force of export growth. The export of private enterprises increased 17.3% with the proportion up to 47.3%. The export of state-owned enterprises and foreign invested enterprises was down 2.5% and 4.9% respectively.

6. The export of the Eastern region was stable again. The export of the Eastern area was up 5.4%, with its proportion in the total national export up 1.1 percentage points. The export of the Central and Western area was down 7.5%.

7. Import volume increased but the price decreased. Affected by the low price of bulk commodities, China’s import has witnessed negative growth for 18 consecutive months. The import volume of part of the bulk commodities increased but the price decreased. Among these, the import volume of soybean, natural gas, copper ore, crude oil, iron ore, copper products and refined oil increased 33.3%, 27.1%, 21.5%, 7.5%, 4.8%, 4.3% and 1.8% respectively, but their import price decreased 10%, 25.2%, 18%, 30.4%, 5.4%, 12.9% and 19.6% respectively, with the decrease of 0.8, 6.6, 2.2, 7.8, 20.5, 1.8 and 6.2 percentage points slower than that of March respectively.

III. The Foreign Investment in China

In January-April, China’s utilization of foreign investment showed the following features:

1. China’s input of FDI continued a steady growth. In January-April, there were 8,298 newly founded foreign invested enterprises, up 6.5% year on year; the actual use of FDI was RMB 286.78 billion (US$ 45.3 billion), up 4.8% year on year ( with the data of bank, security and insurance excluded). In April, there were 2,342 newly set foreign invested enterprises, up 21.4% year on year; the actual use of FDI was RMB 62.57 billion (US$ 9.89 billion), up 6% year on year.

2. The high-tech service industry enjoyed a constant increase. In January-April, the actual use of foreign capital of service industry was RMB 201.4 billion (US$31.88 billion), with an increase of 7.9% year on year, accounting for 70.2% of the total amount of the whole country. The actual use of FDI of the high-tech service industry was RMB 32.53 billion (US$ 5.13 billion) with an increase of 108.6% year on year. In the high-tech service industry, the actual use of the foreign capital of information technology service, digital content and relevant service and R&D and designing service enjoyed a high increase, registering RMB 11.08 billion (US$1.73 billion), RMB 7.26 billion (US$ 1.15 billion) and RMB7.68 billion (US$1.21 billion), with an increase of 195.3%, 199.6% and 41.6% respectively. The actual utilization of foreign capital of the manufacturing industry was RMB 83.26 billion (US$ 13.09 billion), down 1.5% year on year. Among these, the actual use of the foreign capital of medicine manufacturing, Electric Equipment and Machinery manufacturing and transportation equipment manufacturing enjoyed a high increase, up 82.8%, 61.5% and 29.9% respectively.

3. The investment from major resources remains stable and the investment from the countries along the “Belt and Road” to China continued to increase. In January-April, the top ten countries/regions have actually input (calculating according to the actual input foreign capital) RMB 271.26 billion (US$42.87 billion), accounting for 94.6% of the actual use of foreign investment in the country, up 4.6% year on year. At the same time, ASEAN actually input RMB15.64 billion (US$2.45 billion) to China, up 45.6% year on year. 28 EU countries actually input RMB22.08 billion (US$3.5 billion) to China, up 41.9% year on year. Countries related to the “Belt and Road” actually input RMB16.02 billion (US$2.51 billion) to China, with an increase of 23% year on year.

In April, ASEAN actually invested RMB4.07 billion (US$0.64 billion), increasing by 77.1% on a year-on-year basis. 28 EU countries actually invested RMB4.85 billion (US$0.78 billion), going up by 57.8 %. Countries related to "the Belt and Road" actually invested RMB4.25 billion (US$0.67 billion), going up by 75.9% year on year.
4. There are many newly-established and capital-increased large-scale enterprises. In January-April, there were more than 220 newly-established large-scale foreign-invested enterprises with more than US$100 million aggregate investment, more than 150 enterprises with more than US$100 million capital increase and more than 160 enterprises whose actual capital is more than US$500 million. These enterprises range from the research and development ones from the manufacturing industries such as new material, new energy automobile and battery, aircraft parts, integrated circuit and chip, to the service ones from the fields such as medical treatment and pension, e-commerce, cloud computing and technological research and development and application of internet of Things.

5. The western region increased its foreign investment rapidly. In January-April, the western region actually used RMB$23.43 billion (US$3.66 billion) foreign capital of, up 36.2% year on year, far higher than the increase of the country. That actually used by the eastern region is RMB246.03 billion (US$38.92 billion), up 4.4% year on year. That actually used by the middle region is RMB17.33 billion (US$2.73 billion), down 16% year on year. Those of eastern, middle and western region accounted for 85.8%, 6% and 8.2% of the whole country. That of Yangtze River Economic Belt was RMB124.83 billion (US$19.5 billion), up 3.9% year on year.

In April, the actual use of foreign capital of Yangtze River Economic Belt was RMB26.45 billion (US$4.12 billion), up 31.3% year on year.

6. The actual use of foreign capital by means of merge and acquisition continued to grow. In January-April, 441 enterprises were established through merger and acquisition. The actual use of foreign capital was RMB66.46 billion (US$10 billion), up 7.3% and 14.7% year on year.

IV. Outward Investment and Economic Cooperation

Foreign Direct Investment. In January-April, the Chinese mainland investors carried out non-financial direct investment in 3,434 overseas enterprises of 150 countries and regions in the globe, with an accumulative investment value of RMB391.45 billion (US$60.08 billion, with an increase of 71.8% year on year).

From the distribution of the countries and regions of the foreign direct investment, in January-April, the investment from China in the North America, Oceania, Asia and Latin America increased 226%, 152.8%, 81.4% and 59.5% year on year respectively, the investment in Africa increased 1.2% slightly and the investment in Europe decreased 43.4%. The non-financial direct investment in 49 countries related with the “Belt and Road” was US$4.91 billion, with an increase of 32%, accounting for 8.2% of the total sum in the same period and the investment mainly flew to Singapore, India, Malaysia, Indonesia and etc.

In January-April, the investment from Chinese mainland to the seven major economies such as China Hong Kong, ASEAN, EU, Australia, the United States, Russia and Japan reached US$46.96 billion, accounting for 78.2% of the total sum of the foreign direct investment in the same period. Among these, the investment in the United States, Australia, China Hong Kong, and the ASEAN increased 235.7%, 188.1%, 83.9% and 21.5% year on year respectively, the investment in the EU decreased 44.8% year on year and the investment in Russia and Japan remained the same as the last year.

According to the division of the three industries, in January-April, Chinese outward investment flew US$43.84 billion to the tertiary industry, with an increase of 73.2% year on year, accounting for 73% of the total sum of the outward investment in the same period. Among these, the investment in the fields such as the wholesale and retail industry, scientific research and technical services, accommodation and catering, culture and sports, and education realized multiplied high-speed growth. The investment flowing to the second industry was US$15.6 billion, accounting for 26% and the investment flowing to the first industry accounted for 1%.

Contracted foreign project. In January-April, the newly-signed contractual value of the contracted foreign projects of China was RMB384.02 billion (US$58.94 billion, with an increase of 3.8% year on year) and the completed turnover was RMB257.75 billion (US$39.56 billion, with a decrease of 5.5% year on year).

In January-April, there were 229 projects with a newly-signed contractual value of more than US$50 million (there were 209 at the same period last year, up 20), adding up to US$47.85 billion, and accounting for 81.2% of the total sum of the newly-signed contractual value.

In January-April, there are 2,133 overseas infrastructure construction projects undertaken by the Chinese enterprises, with an increase of 40% compared with the same period last year. The newly-singed contractual value was US$43.25 billion, accounting for 73.4% of the newly-signed contractual value of the Chinese contracted foreign projects at the same time. Among these, there were 105 projects with a contractual value of more than hundreds of millions of US dollars, 39 of them were related to the transportation construction projects such as port, railway, road and airport, with an accumulative contractual value of US$12 billion. There were 16 electric power projects, their contractual value reaching US$6.81 billion and there were 21 communication construction projects with a contractual value of US$5.28 billion.

In January-April there were 1,401 contracted foreign projects newly signed by the Chinese enterprises with 60 countries related with the “Belt and Road”. The newly-signed contractual value was US$31.12 billion, accounting for 52.8% of the newly-singed contractual value of the contracted foreign projects of China at the same period, with an increase of 58.9% year on year. The completed turnover was US$17.94 billion, accounting for 45.3% of the total sum at the same period, with a decrease of 3.4% year on year.

Foreign labor service cooperation. In January-April, China had sent 141,000 workers of all kinds for foreign labor services cooperation, a YoY decrease of 26,000 over the same period of last year, including 74,000 workers sent for contracted projects and 67,000 for labor service cooperation. In April, 983,000 labor service workers of all kinds had been sent, decreasing by 12,000 when compared with the same period of last year.

V. Service Trade and Service Outsourcing

Service outsourcing development situation. In January-April, the value of the contractual service outsourcing signed by the Chinese enterprises was RMB276.06 billion and the executed value was RMB170.84 billion, up 23.9% and 7.5% respectively year on year. Among these, the value of the contractual offshore service outsourcing was RMB193.53 billion and the executed value was RMB112.04 billion, up 37.9% and 6.1% year on year respectively. He pointed out that the service outsourcing development in January-April mainly showed the following features:

Firstly, the United States, Europe, Hong Kong, Japan and South Korea are the major markets of China's international service. In the previous four months, the executed value of the offshore service outsourcing undertaken by China from the United States, Europe, China Hong Kong, Japan and South Korea was RMB24,44 billion, RMB18.13 billion, RMB18.01 billion, RMB9.23 billion and RMB7.2 billion respectively, accounting for 68.7% of China's total executed value of the offshore service outsourcing.

Secondly, the growth of business process outsourcing accelerated and the proportion was improved. In the previous four months, the executed value of the offshore information technology outsourcing, business process outsourcing and knowledge process outsourcing undertaken by the Chinese enterprises were RMB57.01 billion, RMB17.67 billion and RMB37.35 billion, up 8.3%, 15.1% and 0.6% respectively year on year, accounting for 50.9%, 15.8% and 33.3% respectively. The offshore business process outsourcing took the lead in the whole growth of service outsourcing. The major reason was that the growth of supply chain outsourcing service, data processing and call center service accelerated, increasing more than 50% year on year.

Thirdly, the contractual scale of provinces and cities along the line of the Yangtze economic belt continued to be expanded. In January-April, the contractual value of the offshores service outsourcing undertaken by the provinces and cities along the line of the Yangtze economic belt was RMB93.48 billion, up 8.7% year on year. The executed value was RMB69.14 billion, remaining the same year on year. Among these, the contractual value of the offshore service outsourcing undertaken by Shanghai was RMB25.37 billion and the executed value was RMB12.24 billion, up 48.3% and 20.5% year on year respectively.

VI. Chinese Provinces-US States Trade and Economic Cooperation

Since 2012, the MOFCOM have worked with 25 domestic provinces and 7 US states to establish a joint working group for trade and investment cooperation between the Chinese provinces and the states of the US. It has contributed to the mutually beneficial trade and economic cooperation and was highly applauded by country leaders of both sides. In November 2015, the Chinese Ministry of Commerce and US Ministry of Commerce signed a MOU on promoting China and the US local trade and investment cooperation.

On April 11, 2016, Deputy China International Trade Representative Zhang Xiangchen and vice Governor of New York State Kathy Hochul signed a MOU for cooperation in New York city, announcing the establishment of a joint working group for trade and investment cooperation between the Chinese provinces and the states of the US. Its members include Beijing, Shanghai, Jiangsu province, Zhejiang province, Jiangxi province, Yunnan province and the State of New York. The two sides agreed to expand cooperation in clean technology, life science, the latest manufacturing, agriculture and food processing, financial service, and communications and media service. Efforts will also be made to enhance some Chinese cities such as Beijing, Shanghai, Nanjing, Hangzhou, Nanchang and Kunming to develop strategic cooperation relations with ten economic development zones in the State of New York and the relevant industries and research institutions.

VII. China Import Expo, Kunshan 2016

China Import Expo, Kunshan 2016, jointly held by the Ministry of Commerce, China Council for the Promotion of International Trade and Jiangsu Provincial People’s Government, is to be held in the city of Kun Shan, Jiangsu province on May 19-21.

Themed on “the innovative development, win-win cooperation”, the expo has two exhibition districts of industry and consumption goods, and it mainly displays brand products and new technology in overseas smart manufacturing, environmental protection technique, and living consumption areas, covering an area of 80,000 square meters. So far, there have been over 800 enterprises across 42 countries and regions including the US, the UK, France, Germany, Russia, Japan and the ROK, with the number of exhibitors going up 21.6% year on year. Also attending are main trade promotion institutions and associations from 18 countries and regions like the US, Japan, the ROK, Poland, Thailand, Malaysia, India, Indonesia, Nepal, Sri Lanka, Taiwan and Hong Kong, ten of which are from the countries along the “belt and road”. On the sidelines of the expo, a series of activities will be held such as the 5th World Business Leaders (Kunshan) Conference, the 2nd US-China Conservation and Environmental Protection Cooperation Forum and the Cross-border E-commerce Forum. Welcome to attend and report these events.

VII. Ministerial Conference of China and Central and Eastern European Countries on Promoting Trade and Economic Cooperation and China-CEEC Investment and Trade Expo

To implement the trade and economic moves made in Suzhou Guidelines for the Cooperation between China and Central and Eastern European Countries jointly released by Premier Li Keqiang and the country leaders from 16 Central and Eastern European Countries in Suzhou in November 2015, approved by the State Council, the Ministry of Commerce is to hold the 2nd Ministerial Conference of China and the Central and Eastern European Countries on Promoting the Trade and Economic Cooperation in the city of Ningbo on June 8-9 this year. At the same time, China-CEEC Investment and Trade Expo will be held along with China International Consumer Goods Fair.

Themed on “opening a new chapter for 16+1 trade and economic cooperation based on the new starting point”, the ministerial conference incorporates major topics such as “digging out the products with characteristics, developing new growth points of bilateral trade”, “extending cooperation areas and promoting capacity and equipment manufacturing cooperation”, and “innovating financing models and creating new model for infrastructure cooperation”.

The expo consists of China-CEEC Products Fair, the 3rd Conference of China-CEEC Joint Agencies of Investment Promotion , the 2nd China-CEEC Investment Cooperation Seminar, the Forum of China-CEEC Countries and Mayors, the quality inspection cooperation dialogue and tourism cooperation exchanges etc.. The honor country of the expo is Hungary.

At present, the preparatory work of both activities gets on well.

The above is the major situation. Now you are welcome to ask any questions.

CNS: Yesterday, MOFCOM and the NDRC jointly announced that comprehensive pilot programs on developing a new open economic system would be carried out in 12 cities and regions, and a meeting was held to arrange the implementation work. What is the main content of the plan for the pilot programs?

Shen Danyang: Developing comprehensive pilot programs for building a new open economic system is a very important measure to implement the Opinions of the CPC Central Committee and the State Council to Build A New Open Economic System, and an important measure to promote reform, development and innovation through opening up and to build an open economic power. MOFCOM and the NDRC have worked together with relevant departments to formulate a pilot plan and submitted it to the CPC Central Committee and the State Council for approval. Focusing on such core objectives as the new mechanism for resource allocation, new models of economic management, new pattern of all-dimensional opening up, and new advantages in international cooperation and competition, the plan sets out six pilot tasks for the 12 pilot cities and regions to accomplish.

First, to explore a new management model for open economic operation. The pilot regions are required to establish a system of list of rights and list of responsibilities, carry out "one-stop" online examination and approval based on "Internet plus" and big data, promote the establishment of a filing and reporting system for matters concerning foreign trade and economic cooperation, and build an IT-based, intelligent system on oversight both during and after the handling of matters. This will be the most important one of all pilot tasks.

Second, to explore a new mechanism for coordinated opening up among various types of development zones (parks). The regions are required to replicate and spread relevant pilot free trade zone (FTZ) policies so long as those policies do not require legislative changes, reinforce institutional innovation such as industrial clustering, services upgrade, management integration and cross-regional interaction, and form a new mechanism of service and management that is compatible with high-standard international rules. The regions are also required to transform the zones and parks into a circular economy and explore the building of green and low-carbon manufacturing bases. As we can see, the 12 pilots include six cities and six regions. These regions share some of the development directions and objectives with the FTZs. At the same time, they all have their distinctive features. The plan hopes that through the pilot programs coordinated opening among different development zones and parks could be achieved, and new mechanisms formed, including both intra- and inter-zones (parks) coordination and coordinated development between the eastern and central/western regions. For instance, some of the industries in the east can be relocated to the zones (parks) in the central/western regions.

Third, to explore new models of international cooperation. The regions are required to improve their foreign investment regimes using the pre-establishment national treatment plus negative list approach. The plan encourages foreign investors to invest in high-end manufacturing, and promotes the pilot programs in the opening up of the services sector. It supports enterprises' effort to participate in major production capacity cooperation projects overseas, and builds a number of service platforms for the going global of advantageous industries and high-efficiency production capacity, for the close collaboration between commerce and industry, and for mergers & acquisitions abroad. Effort should be made to both explore how to do a better job in "bringing in", and explore how to do a better job in "going global". These pilot cities and regions are very proactive in attracting investment and utilizing foreign investment, and enthusiastic about "going global". It is also an important task to explore some new ways to do a better job in "bringing in" and "going global", and better integrate the two together.

Shen Danyang: Fourth, to explore a new system for foreign trade promotion that is quality and efficiency oriented. The pilot cities and regions are required to support the establishment of incubator funds and policy financing and guarantee fund, and encourage foreign trade enterprises to develop new technologies and explore new markets. They should cultivate specialty products with local features, key industries and well-known exhibitions and fairs, build international marketing and aftersales networks, explore and improve the policy functions of special customs supervision areas, and promote trade facilitation. They should explore systems and mechanisms that facilitate the development of new trade forms such as cross-border e-commerce and market sourcing. They should facilitate the free flow of domestic and foreign professional talent providing specialized services and establish a port management and customs clearance cooperation model that is compatible with trade in services. Having a basis and conditions for foreign trade innovation, the 12 pilot cities and regions can begin by first exploring some of the short-term measures given how grim and complex the foreign trade situation is this year; as for the medium- and long-term systems and mechanisms, these new pilot cities may actively explore them as well.

Fifth, to explore new measures in financial services for building a new open economy. Provided that risks are controllable, the regions are required to improve the internationalized operation of their financial institutions, relax the foreign exchange settlement restrictions for issuing overseas foreign currency-denominated bond by enterprises within the pilot regions, encourage eligible enterprises to engage in cross-border investment and financing, and develop outbound investment funds of all forms. Much of the work in building a new open economy cannot be done without the support of financial services. The pilot plan puts forward in particular such a direction of effort in the 12 pilot cities and regions based on the requirement of the Zhongfa No. 13 document. The new measures in financial services in exploring a new open economy merit our attention.

Sixth, to explore a new pattern of all-dimensional opening up. The regions are required to explore jointly establishing overseas trade and economic cooperation zones with major cities and regions along the "Belt and Road", promote industrial clustering abroad, and set up local cooperation mechanisms in culture, education, technology, tourism, etc. The requirements to explore a new pattern of all-dimensional opening up differ for each of the 12 cities and regions. Geographically, some of the cities and regions are in the north, some in the center, some in the south and some along the coast. The cities and regions also differ in terms of scope and type. Therefore, in exploring a new pattern of all-dimensional opening up, a lot can be achieved and the room is large. Thank you for your question.

China Business Journal: Not long ago, Gao Hucheng, Minister of Commerce, led a delegation to Mongolia. What are the achievements of this visit?

Shen Danyang: Upon the invitation of Mongolian Foreign Minister Lundeg Purevsuren, Gao Hucheng, Minister of Commerce led a economic and trade delegation of the Chinese government to Mongolia and co-chaired the fourteenth meeting of the China-Mongolia Joint Economic and Trade Commission with Mongolian Foreign Minister. He also met with Mongolian President Tsakhiagiin Elbegdorj, Prime Minister Chimediin Saikhanbileg and Minister of Industry Dondogdorj Erdenebat. The visit achieved positive outcomes. The two sides exchanged views over issues of all fields in China-Mongolia economic and trade cooperation. A series of cooperation projects of mutual interests, including jointly matching the “Belt and Road” Initiative and Mongolia's Prairie Road Initiative and building cross-border economic zones of two countries, are promoted. Thank you.

CCTV: China will take over the G20 Presidency for the first time this year. We know that the trade ministerial meeting will be held in Shanghai this July. Has China proposed new initiatives? Could you update us on the progress?

Shen Danyang: China assumes G20 2016 presidency and hosts many activities. The meetings and activities on trade and investment are being prepared. In the second meeting of the G20 Trade and Investment Working Group and Development Working Group, based on opinions and suggestions of all parties, China proposed several cooperative initiatives, including Duties of Trade and Investment Working Group, G20 Global Trade Growth Strategies, Contribution of G20 to the Multilateral Trading System, G20 Guidelines on Global Investment and Strategic Plan for Capacity Building of Global Value Chain. All parties have conducted in-depth and constructive discussions on these initiatives. Generally speaking, the working group meeting held in April was fruitful and all parties further forged consensus, laying a solid foundation for active and pragmatic economic and trade outcomes in trade ministerial meeting in Shanghai, July and Hangzhou Summit in September. In the next step, all parties would negotiate the contents of relevant initiatives in the third working group meeting in July and other occasions and try to reach a comprehensive consensus at an early date. We will update you if there is more information in July. Thank you.

TV Tokyo: Not long ago, the State Council issued an opinion on facilitating used-car trading. We understand that China’s used car market is not as well-developed as those in the Europe, the US and Japan. What are the measures MOFCOM will take to improve and invigorate the used car market? Is there a specific target on the transaction volume of used cars?

Shen Danyang: The General Office of the State Council issued Opinions on Facilitating Used-Car Trading this march. After the Opinions were issued, MOFCOM and relevant departments are speeding up the drafting of the notices on the implementation of the Opinions. Localities are also actively implementing all policies and measures. According to the requirements of the State Council, we will also check whether the policies are well-implemented. The issues you are interested in are being summarized and we will try to give more information next month.
Thank you.

CBN: Recently, the State Council issued Opinions on Stabilizing and Promoting Foreign Trade, which covers further improving processing trade policies and supports the transfer of processing trade to central and western regions. Could you elaborate on that?

Shen Danyang: The State Council recently issued Opinions on Stabilizing and Promoting Foreign Trade, a new policy supporting the development of foreign trade. The policy covers five aspects, including processing trade. It focuses more on the development of and support for processing trade. It proposes the comprehensive use of fiscal, land and financial policies to support the transfer of processing trade to central and western regions and policies and measures on canceling review and approval of processing trade business nationwide and enhancing the mechanism for supervision both during and after the handling of matters. This shows that China attaches great importance to the special position and role of development of processing trade at this stage.

As you all know, processing trade has played a very important role in China’s foreign trade in the past 30 plus years. Accounting for approximately 53% of Chinese foreign trade at one time, processing trade has now plunged to around 30%, which is also the main cause of the current slump in foreign trade. Processing trade companies are very peculiar in that they are like migrant birds constantly on the lookout for cost lowlands around the world. In the course of global industrial shifts, processing trade seems always to be on the move from one place to another. With rising costs of production factors in China, some processing trade businesses are leaving. Of course, we hope that a large part of them, especially those ready for transformation and up-grading, can stay for a better future. Such circumstances call for extraordinary policies that meet WTO rules, environmental standards and market access conditions to effect the migration. The move towards central and western China comprises both the FDI and relocations from the eastern seaboard. As processing trade transforms and upgrades in the east, part of the industry is migrating to neighboring countries. We hope that the migration can go slow and go westward rather than abroad to keep processing trade in the country.

Differential policies are needed to guide the westward transfer of processing trade. New measures at the state level offering land and electricity incentives to related businesses have proved very popular. For instance, while the central and western region steps up guarantee for processing trade land use, land released by the tiered relocation of processing trade in the east can be converted, upon approval to meet business, tourism and elderly care purposes. These are recent policies that have been well received. I’m sure they will work.

Economic Information Daily: The 22nd APEC Meeting of the Ministers Responsible for Trade (MRT) will open in Peru very soon. What are China’s key interests and expectations for the meeting? Thank you.

Shen Danyang: The APEC Meeting of the Ministers Responsible for Trade will be held in Arequipa, Peru from 17th to 18th of May. Revolving around ‘Quality Growth and Human Development’, the theme of APEC Peru, the meeting will discuss, among others, support for the multilateral system, strengthening regional economic integration, promoting SME internationalization and services cooperation. The meeting intends to issue the APEC MRT Statement and the Separate Statement of APEC MRT on Supporting the Multilateral Trade System.

Bearing in mind the theme of the meeting, China will continue to push APEC members to jointly deliver APEC China outcomes such as the FTAAP, global value chain and connectivity. Special emphasis will be placed on the research on the collective strategy of the FTAAP for positive results as solid groundwork for a report and policy recommendations for the leaders before their meeting in Lima. I believe there will be positive outcomes. Thank you.

CRI: The 2016 China E-commerce Annual Conference will be held in Beijing. What is the theme and program for this year’s meeting? What does MOFCOM plan to do for e-commerce this year?

Shen Danyang: The China E-commerce Annual Conference is a major event of the 4th CIFTIS scheduled in Beijing from May 28th to June 1st. As an important fixture of CIFTIS, this year’s conference, co-sponsored by the Beijing Municipal Commission of Commerce and Beijing Daily Group under the guidance of the Department of Electronic Commerce and Informatization of MOFCOM, will be staged concurrently with CIFTIS at Beijing International Convention Center.

Under the theme of ‘Innovation, Ecology and Sharing’, the conference has one forum and five track sessions on Internet + cross-border consumption, Internet + life services, Inter + the countryside and community, Internet + payment and Internet + business culture. At the forum, MOFCOM will release the latest Report on China’s E-commerce (2015-2016). At the Internet + cross-border consumption track, the sponsors will ask representatives of cross-border e-commerce businesses and related agencies to discuss how to create the industrial chain in the e-commerce ecosystem in the new policy context and the future path and innovation of e-commerce. Hot e-commerce related topics can also be discussed at the conference. E-commerce associations from the EU and the Netherlands will also attend and share international experience and practices. So much for the E-commerce Conference.

Speaking of what MOFCOM plans to do to push forward e-commerce development, it is known to all that e-commerce has grown at a dazzling speed in recent years. The total e-commerce transaction value topped RMB 20 trillion last year, increasing 27% year-on-year to RMB 20.8 trillion. In the first quarter of 2016, the total national on-line retail sale amounted to RMB 1.0251 trillion, a YOY growth of 27.8%, among which on-line retail sale of merchandise increased by 25.9% to RMB 824.1 billion, accounting for 10.6% of the total retail sale of consumer goods. The figures prove that China’s e-commerce has maintained momentum after years of high-speed growth. However, does it mark the end of e-commerce? The answer is negative. There is still much room for developing e-commerce. Therefore, MOFCOM will continue to step up efforts to provide policy support for promoting development of e-commerce.

There is naturally plenty to do in all aspects, but we will focus on three points. First, we will ensure effective implementation of the special campaign on promoting development of standard e-commerce and the Internet + Circulation Action Plan launched in succession last year. Second, we will give priority to major tasks including integration of on-line and off-line transaction, cross-border e-commerce, e-commerce in rural areas and so on. Third, we will further strengthen public services and improve the operation climate. Thank you for your question.

Economic Daily: We are aware that Chairman of the Standing Committee of the National People’s Congress Zhang Dejiang is scheduled to go to Hong Kong on 18th to attend the Belt and Road Summit, sponsored by the Hong Kong Special Administrative Region government, the NDRC and MOFCOM. I have two questions. Firstly, what is the thinking behind the high-level attention from the central government? Secondly, what benefits has CEPA, concluded by China’s mainland and Hong Kong, brought to the latter’s economy over the years?

Shen Danyang: The Belt and Road Summit fully shows the central government’s attention to and support for Hong Kong’s participation in the new round of national development strategy. The central government sets great store by the Summit because it is of major significance to hold the Summit in Hong Kong. On the one hand, Hong Kong has a unique role to play in building the Belt and Road, which is a Chinese Solution to promoting global development and cooperation as well as a priority task for cultivating a new landscape of all-round opening up. On the other hand, while the national Belt and Road Initiative is pushed forward, Hong Kong can combine its unparalleled strengths with the national strategy, seek connections between what the nation needs and Hong Kong excels at and continue enhancing its position and functions in national economic growth and opening up with a view to achieving better development.

Many experts and scholars on Hong Kong and people from every walk of life are taking stock of the benefits CEPA has brought to Hong Kong’s economy. I may add something as well. Since 2003, the mainland of China has signed with Hong Kong and Macau in successive order CEPA and ten Supplements, the Agreement between the Mainland and Hong Kong on Achieving Basic Liberalisation of Trade in Services in Guangdong and the Agreement on Trade in Services, greatly boosting prosperity, stability and development of Hong Kong. On the merchandise trade front, the Mainland has eliminated tariffs on 100% products originally made in Hong Kong since 2006. By the end of March 2016, the total value of imported goods under CEPA from Hong Kong to Mainland had amounted to US$9.71 billion with tariff preferences worth RMB 5.38 billion.

Hong Kong’s trade in services has won more support. The Agreement on Trade in Services signed between the Mainland and Hong Kong at the end of 2015 has basically enabled liberalization of trade in services. By the end of last year, the value of import and export trade in services between the Mainland and Hong Kong had totaled US$122.56 billion, representing 17.2% of the total trade in services of the Mainland and making Hong Kong the Mainland’s largest services trading partner. The Individual Visit Scheme for Mainland residents to visit Hong Kong is another support lent to Hong Kong. In this regard, the visits made by Mainland residents to Hong Kong under the Scheme soared by 41-fold from 670,000 in 2003 to 27.94 million last year, registering an average annual growth rate of 36.5%, with total visits of 188 million. By 2014, the Individual Visit Scheme brought Hong Kong US$99.3 billion worth of direct revenue. As far as individual business is concerned, CEPA allows Hong Kong residents to obtain business licenses of individual entity. By the end of 2015, 7,766 Hong Kong residents had set up businesses in the Mainland, with 21,778 employees in total and registered capital of RMB 720 million. The opening up of individual business sector provides small and micro enterprises and youth of Hong Kong with new room for growth. CEPA is more than these of course. It has a wealth of measures on opening up in trade and investment facilitation, economic and technological cooperation and other areas.
Thank you for your questions.

That is all for today’s press conference. Thank you all.