Dear friends from the media, good morning. Welcome to the press conference. I’ll brief you on the situation of commercial performance in January-August and answer your questions.

I. Market Performance

The retail sales of consumer goods in August reached RMB2.75 trillion, going up 10.6% year on year, 0.4 percentage points higher than that in July. With price factor excluded, it grew up by 10.2% year on year, and 0.83% month on month. In January-August, the retail sales of social consumer goods totaled RMB21.05 trillion, up 10.3% year on year, equal to that of January-July. The actual growth rate of the retail sales of the 5,000 enterprises monitored by the Ministry of Commerce was 0.3 percentage points higher than that in July. Official from the Department of Market Operation and Consumption Promotion pointed out the consumption market saw a growth in August and the characteristics were listed as follows:

1. Online retail sales sustained a rapid growth. In August, the retail sales online of enterprises monitored by the Ministry of Commerce grew up 25.3% year on year, higher than that of stores, supermarkets and shopping mall by 23.6, 18.9 and 17.8 percentage points respectively. According to the statistics of National Bureau of Statistics, in January-August, the online retail sales of the national physical commodities increase by 25.5% year on year, 0.6 percentage point lower than that of January-July, taking up 11.6% of the total retail sales of social consumer goods, equal to that of January-July.

2. Sales of the automobile market speed up. According to the statistics by China Association of Automobile Manufacturers, the sales of passenger car in August reached 1,796,000, going up 26.3% year on year. Among these, the sale of passenger car of 1.6 liter or lower liters grew up 40.7% year on year, 0.7 percentage point higher than that of last month. The sales of new energy mobiles maintained a rapid growth of 92.2% year on year. That of automobiles of enterprises above the designated size in August grew up 13.1%, with a growth rate of 3.9 percentage points higher than last month, and that of oil and oil products increased 2.7% year on year, reversing the negative growth since April.

3. Consumption of real estate and its relevant industry grew rapidly. The real estate market continued to pick up and its relevant consumption grew fast. The consumption of home appliance and construction materials monitored by the Ministry of Commerce increase by 13.4% and 11.8% respectively year on year, with 1 and 0.7 percentage point higher than that of July. Among these, the green smart home appliance remained popular and the sales of fridge-freezer energy efficiency class A++, Ultra High-Definition TV and inverter air-conditioner stood out , higher than that of the likewise products by 9.5, 8.6 and 1 percentage points.

4. Culture and entertainment consumption grew fast. The national catering revenue in August reached RMB 303.6 billion, up 10.3% year on year. The revenue of film box office in August reached RMB 4.05 billion, with the best performance in August than ever. In January-August, the national accumulative film box office has hit RMB 30 billion, reaching the goal 29 days earlier than last year. August is the peak tourist season and tourism consumption continued rising. For example, Aba Prefecture in Sichuan Province has accepted 5,157,000 tourists at home and abroad in August, and the tourism revenue hit RMB4.29 billion, up 12.6% and 11.7% respectively year on year.

5. Consumer price rose slightly. In August, CPI was up 1.3% year on year, 0.1 percentage points higher than that of July. In 36 large and medium size cities monitored by the Ministry of Commerce, the prices of agricultural products were down 2.4% year on year, 3.6 percentage points slower than those in July. The wholesale price of pork reached RMB 24.9 per kilogram, up 4.3% year on year, lower than that in July by 11.4 percentage points, falling down for three months in a row. Affected by the strong rainfall and hot weather, the prices of vegetable as a whole continued falling. The average wholesale price of 30 kinds of vegetable reached RMB3.56 per kilo, going up 2.9% month on month and down 10.3% year on year.

II. Foreign Trade

According to the Customs statistics, China’s total import and export in January-August reached RMB 15.4 trillion, down 1.8% year on year. Among them, exports amounted to RMB 8.8 trillion, down 1%; imports RMB 6.5 trillion, down 2.9%. In spite of the negative growth of both imports and exports, as the effects of foreign trade promotion measures begin to appear, its slowdown will continue to be narrowed, its structure will be further optimized and new engines are gathering. China’s foreign trade will sustain a sound momentum of development and it shows the following features:

1. In terms of the growth rate, the slowdown of imports and exports continue to narrow down. The exports and imports in August grew up 5.9% and 10.8% respectively, realizing a double rise of both imports and exports since November, 2014. In exports, the cumulative exports decline has narrowed down for six months in a row since March. In imports, affected by multiple factors such as low base last year and steady prices of bulk commodity, the import growth in August has turned positive and had the largest growth in a single month since March.

2. In terms of enterprises, private enterprises are still the main force of export. In January-August, the exports of private enterprises increased 3.3%, taking up 46.7% of China’s total foreign trade exports, 1.8 percentage points higher than that of the same period of last year. The exports of foreign-funded enterprises and state-owned enterprises fell down 4.2% and 6.1% respectively year on year.

3. With regard to trade mode, the exports of conventional trade sustained a positive growth. In January-August, the exports of conventional trade grew up 1.3%, taking up 55.5% of the national trade exports. The exports of processing trade decreased 6.8% in January-August while it increased 0.4% in August, realizing a positive growth in a single month again after 17 months.

4. On the international market, exports to traditional markets like EU and Japan remain steady. In January-August, China’s exports to EU and Japan saw a positive growth of 2.8% and 0.9% respectively. Exports to some countries along the “belt and road” grew positively, and that to Philippines, Russia, India and Thailand increased 25.9%, 16.0%, 8.7% and 8.7% respectively year on year.

5. On its commodity structure, exports of large complete sets of products and high value-added products maintained a positive growth. In January-August, the exports of large complete sets of products grew 10%. In August, the exports of mechanical and electrical products increased by 5.3%, of which exports of automobile, auto parts and electric motor and generator went up 23.5%, 20.6% and 14.2% respectively.

6. On new business mode of foreign trade, cross-border e-commerce sustained a rapid growth. In January-August, cross-border e-commerce, market procurement trade, and foreign trade comprehensive service enterprises maintained the momentum of rapid growth and now they are becoming new growth engines of foreign trade.

7. On imports, both the quality and efficiency were further raised. In January-August, the quantity of 10 kinds of staple commodities such as crude oil, iron ore, natural gas, copper and copper concentrate increased while the prices decreased. The payment reduced RMB410 billion totally. This was conducive to reducing the costs of enterprises and improving the benefits.

III. Foreign Investment in China

China’s input of foreign investment in January-August has the following characteristics:

1. The national overall absorption of FDI sustained a growth. In January-August, a total of 18,538 newly-established foreign-invested enterprises were approved, going up 10.2% year on year. The actually utilized FDI amounted to RMB548.83 billion (US$85.88 billion), up 4.5% year on year (data of bank, insurance and security excluded). In August, 2,736 newly-established foreign-invested enterprises were approved, going up 13.2% year on year, and the actually utilized foreign capital reached RMB 57.32 billion (US$8.76 billion), increasing 5.7% year on year.

2. The absorption of FDI in service sector maintained a growth and that in hi-tech service stood out. In January-August, the actually utilized FDI in service sector was RMB387.8 billion, up 10% year on year, taking up 70.7% of the national total. Among them, that in transport, warehouse and postal service, information transmission, computer service and software, and lease and business service sector stood at RMB27.26 billion, RMB39.89 billion and RMB64.8 billion respectively, going up 105.5%, 198% and 73.4% respectively year on year. The actually utilized FDI in hi-tech service sector reached RMB 67.1 billion, going up 98.2% year on year. Among these, the information technology service, data content and relevant service, R&D and the service of design, and transformation of scientific and technological achievements service had comparatively high utilization of foreign capital, increasing by 322.7%, 46.7% , 40.5% and 39.7% respectively year on year.

The actually utilized FDI in transport equipment manufacturing and special equipment manufacturing amounted to RMB18.42 billion and RMB11.78 billion respectively, going up 16% and 5.2% year on year.

3.The investment from major sources maintained a robust momentum of development. In January-August, the actual input of the investment from the top ten countries and regions (calculated by actual input value of foreign capital) amounted to RMB 520.12 billion, taking up 94.8% of the total national actual use of foreign capital, going up 5.9% year on year. Among these, those from the US, Germany, UK and Sweden grew by 79.7%, 79.2%, 96.6% and 48.1% respectively. The growth of information transmission, computer service and software industry, wholesale and retail scientific research, technology service and geological prospecting industry, lease and business service sector, finance and manufacturing stood out. Over the same period of time, the actual input of foreign capital from the ASEAN countries stood at RMB 29.53 billion, up 8.1% year on year. That from 28 EU countries reached RMB 42.56 billion, up 34.9% year on year. That from countries along the “Belt and Road” reached RMB 30.74 billion, up 1.8% year on year.

In August, the actual input of foreign investment from the ASEAN into China reached RMB4.75 billion, up 125.2% year on year. The actual input of foreign investment from 28 countries of the EU into China was RMB4.76 billion, up 30% year on year. The actual input of foreign investment into China from the relevant countries along the line of the “Belt and Road” was amounted to RMB5.21 billion, up 129.5% year on year.

4. The amplification of foreign investment absorbed from the western region is high. The absorption of foreign investment from the eastern region is stable and that of from central region decreases greatly. In January-August, the actual use of foreign investment in the western region was RMB39.35 billion, up 30.5% year on year. The actual use of foreign investment in the eastern region reached RMB481.89 billion, up 7.5% year on year. The actual use of foreign investment in the central region reached RMB27.59 billion, down 41.1% year on year. The actual use of foreign investment in the Yangtze River Economic Belt was RMB250.84 billion, up 7.5% year on year.

In August, the actual input of foreign capital into the Yangtze River Economic Belt of China reached RMB32.07 billion, up 19.1% year on year.

5. There are a large number of the newly set large enterprises with added capital. In January-August, there were 490 large foreign invested enterprises with a total investment amount over US$ 100 million, and about 300 enterprises with more than US$100 million added capital. Among them, there were not only manufacturing enterprises that engage in R&D and the manufacturing of new materials, new energy automobiles and batteries, aircraft components, integrated circuit and chips, but also service enterprises that engage in medical care, old-age care, e-commerce, cloud computing and R &D and the application of the technology of the Internet of Things .

6. The actual use of foreign capital by foreign M&A continued to increase. In January-August, a total of 919 newly-established foreign-invested enterprises were approved with an actual use of foreign capital RMB 107.2 billion, up 5.5% and 20.4% respectively year on year, taking up 5% and 19.5% respectively of their total figures.

IV. Outward Investment and Economic Cooperation

Foreign direct investment. In January-August 2016, the Chinese domestic investors carried out the non-financial direct investment in about 6,000 outward enterprises in 160 countries and regions, with an accumulative investment of RMB775.12 billion (US$118.06 billion), up 53.3% year on year. In August, the foreign direct investment was RMB 100.52 billion (US$15.31 billion), up 13.4% year on year.

Foreign contractual projects. In January-August, the turnover of the foreign contractual projects was RMB 590.90 billion (US$ 90.00 billion), up 1.5% year on year. The newly-signed contractual value was RMB 871.70 billion (US$132.77 billion), up 6.2% year on year. The turnover completed in August was US$12.92 billion, up 32.9% year on year, and the newly-signed contractual value was US$18.79 billion, up 25.3% year on year.

Foreign labor cooperation. In January-August, China has sent all kinds of laborers abroad with a number of 306,000. In August, China sent 35,000 laborers abroad. By the end of August, the number of China’s dispatched laborers reached 979,000.

In January-August, China’s outward investment and economic cooperation mainly presented the following features:

The outward investment cooperation continued to maintain a stable growth. In January-August, China's non-ferrous foreign direct investment reached US$118.06 billion, with an increase of 53.3%. In August, the foreign direct investment reached US$15.31 billion, up 13.4% year on year.

2. The investment regions were relatively centralized, and that in the developed countries and regions grew rapidly. In January-August, the Chinese inland's investment in Hong Kong, ASEAN, EU, Australia, U.S., Russia and Japan reached US$ 87.66 billion, accounting for 74.2% of the total direct investment outward in the same period. The investment flew to the U.S grew rapidly, with an increase rate of 193.2%. The actual transaction amount of the project that Qingdao Haire merges the appliance business of the General Electric reached US$5.58 billion, marking the largest foreign direct investment project completed by Chinese enterprise in August.

3. The industrial distribution pattern of outward investment was further optimized and the investment in manufacturing industry continued to increase. In January-August, the outward investment mainly flew to business service industry, manufacturing industry, wholesale and retail industry and information transmission, software and information technology service industry, accounting for 25.7%, 17.9%, 15.7% and 12% of the total investment respectively in January-August. The investment flowing to the manufacturing industry reached US$21.11 billion, accounting for 209.3% year on year. Among these, the investment amount flowing to the equipment manufacturing industry was US$14.08 billion, 4.7 times that in the same period last year, accounting for 66.7% of the outward investment of manufacturing industry.

4. The contractual business in the relevant countries along the line of "Belt and Road" increased rapidly. In January-August, China newly signed almost 4,000 foreign contractual projects in 61 relevant countries along the line of the "Belt and Road", with a contractual value of US$69.82 billion, up 28.3% year on year, accounting for 52.6% of the total newly signed contractual value of China's foreign contractual projects in the same period. The contractual value of the construction project of the new capital of Egypt that China State Construction Engineering Corporation signed reached US$2.7 billion, marking the biggest contract project bid of Chinese enterprises in the relevant countries along the line of the "Belt and Road".

5. The outward investment of provinces and cities along the line of the Economic Belt of Yangtze River was active. In January-August, the outward investment of provinces and cities along the line of the Economic Belt of Yangtze River was US$39.87 billion, 1.9 times that in the same period of last year, accounting for 33.9% of the total foreign direct investment of China. Among these, the outward investment of Shanghai was US$17.62 billion, up 70.3% year on year, that of Zhejiang was US$7.69 billion, up 218.1% and that of Jiangsu was US$7.05 billion, up 130.3% year on year.

V. Service Trade and Service Outsourcing Situation

Service trade situation. In January-July, China’s service trade enjoyed a rapid development, and China’s service import and export volume reached RMB3.01296 trillion, with an increase of 24.6% year on year. Among these, China’s service export was RMB1.04771 trillion, with an increase of 10.8% year on year and the service import was RMB1.96525 trillion, with an increase of 33.5% year on year. Major features are as follows:

1. The import and export scale was expanded continuously and the proportion was improved. Since this year, China’s service import and export maintained a double-digit growth for seven months in a row, and that in March-July was more than 20%.. The proportion of service trade in the foreign trade was continuously improved. In January-July, this proportion reached 18.2%, 2.8 percentage points higher than that of in 2015.

2. Export of high value added service accelerated. In January-July, the computer and information service export was RMB103.96 billion, with an increase of 20.8% year on year and the technical service export was RMB49.97 billion, with an increase of 25.3% year on year. The exports of maintenance service, advertisement service and financial service saw a year-on-year growth of 59.8%, 54.7% and 42.9% respectively.

3. The travel import and export enjoyed a high-speed growth and the proportion of travel import was big. In January-July, the growth of China’s service import approached 30%. Among these, the travel service (including tourism and studying abroad) import reached RMB1.27645 trillion, with an increase of 53.2% year on year, marking the major reason that drives the service import. Besides, the import of insurance service reached RMB 46.83 billion, up 86.6% year on year.

4. The growth of service import and export in the service trade innovation pilot area is favorable. In the first half of 2016, the service import and export value in the 15 provinces, cities and regions approved by the State Council to carry out the service trade innovation development pilot amounted to US$213.75 billion, accounting for 47.5% in that of the whole country, 0.8 percentage points higher than 2015. Among these, the service import and export volume of Shanghai reached US$85.9 billion, ranking the first, and followed by Shenzhen, Guangzhou and Suzhou.

The service outsourcing situation. According to the statistics of the MOFCOM service outsourcing management information system, in January-August, the service outsourcing contractual volume signed by the Chinese enterprises was RMB628.99 billion and the executed value was RMB404.2 billion, with an increase of 31.2% and 12.8% year on year respectively. Among these, the contractual value of the offshore service outsourcing was RMB434.35 billion and the executed value was RMB261.93 billion, with an increase of 42.4% and 9.7% year on year respectively. Some features are presented as follows:

1. The eastern coastal provinces and cities dominated the leading advantages of industrial development. In the first 8 months, the executed value of offshore outsourcing undertaken by eastern coastal provinces and cities was RMB 415.64 billion, and the executed value was RMB245.74 billion, up 48.6% and 10.7% year on year, accounting for 95.7% and 93.8% in the whole country respectively. The top six provinces and cities were Jiangsu, Guangdong, Zhejiang, Shanghai, Shandong and Beijing. Their business amount in January-August accounted for 87.2% of the whole country.

2. Contract volume in the market of “Belt and Road” grew rapidly. In the first 8 months, the contract volume of service outsourcing undertaken by Chinese enterprises in the countries related to “Belt and Road” reached RMB 76.07 billion, up 22.2% year on year, covering information technology service, engineering design and industrial design. Among these, the contract volume undertaken by the Central and Eastern European Countries was RMB 2.01 billion, up 78.4% year on year, being the region of the fastest growth of service outsourcing related to “Belt and Road”.

3. Provinces and Municipalities along Yangtze River Economic Belt kept a steady growth. In the first eight months, the contract volume of offshore service outsourcing undertaken by the provinces and municipalities along Yangtze River Economic Belt was RMB 196.55 billion with the executive value RMB 159.14 billion, up 4.3% and 5.7% year on year, accounting for 45.3% and 60.8% respectively of the national total. Among these, the contract volume of the offshore service outsourcing undertaken by Sichuan province reached RMB 5.79 billion with an executive value of RMB 3.9 billion, up 110.2% and 85.9% year on year respectively, and with the fastest growth among the provinces and municipalities along Yangtze River Economic Belt.

VI. The 5th Ministerial Conference of the Forum for Economic and Commercial Cooperation between China and the Portuguese-speaking Countries

The 5th Ministerial Conference of the Forum for Economic and Commercial Cooperation between China and the Portuguese-speaking Countries will be held in Macao on October 11-12, 2016. The government delegations of China and seven Portuguese-speaking countries such as Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, Portugal and East Timor will participate in this conference.

This ministerial conference is themed on "Moving towards a Stronger China-Portugal Trade and Economic Relationship: Jointly Discussing Cooperation, Constructing Platform and Sharing Development", highly echoing the concept of the initiative “Belt and Road” of “consulting, co-building and sharing”. During the conference, the participants of the forum will sign the documents such as the Program of Action of Trade and Economic Cooperation (2017-2019), define the major fields and the development direction of the trade and economic cooperation between China and Portuguese-speaking countries and fully show Macao's role as business service cooperation platform between China and the Portuguese-speaking countries.

During the 13 years, the participants actively implement the Program of Action of Trade and Economic Cooperation reached at the previous ministerial conference, and the economic and trade relation between China and Portuguese-speaking Countries gained great progress. The bilateral communication and cooperation deepened continuously with great achievements, promoting the benefits of the people of the participants. We believe that the fifth Ministerial conference will further consolidate the foundation of the economic and trade cooperation development between China and the Portuguese-speaking countries, inject new power to the economic development of the participants, bring new opportunities to consolidate the service platform status of Macow in business cooperation between China and the Portuguese-speaking countries and promote the moderately pluralistic development of the economy.

VII. Deputy Representative of China International Trade Zhang Xiangchen to Lead a Delegation to Visit Bulgaria and Cyprus
Deputy Representative of China International Trade of the Ministry of Commerce Zhang Xiangchen is to lead a delegation to visit Bulgaria and Cyprus on September 24-30, 2016. The visit aims to implement the economic and trade consensus reached by Chinese President Xi Jinping and the President of Cyprus Nicos Anastasiades during the Asian Political Parties’ Special Conference on Silk Road in October 2015, as well as the economic and trade consensus and achievements reached by Premier Li keqiang and the leaders of Bulgaria at the 4th Summit of China and Central and Eastern European Countries in November 2015 and the 11th Asia-Europe Meeting in July 2016.

During his visit in Bulgaria, zhang Xiangchen will co-chair the 16th Meeting of China-Bulgaria Economic Joint Committee with the Deputy Economic Minister of Bulgaria Ljuben Petrov, exchanging in-depth views on deepening bilateral practical economic and trade cooperation under the framework of the “Belt and Road”, expanding the bilateral trade and two-way investment, and implementing the economic and trade cooperation consensus reached by the leaders of the two countries.

When visiting Cyprus, Zhang Xiangchen will co-chair the 7th meeting of China-Cyprus Joint Committee on Economic, Trade and Technological Cooperation with the General Secretary of the Administration of EU Plan, Coordination and Development of Cyprus, exchanging views on expanding trade and investment of both countries’ concern, and on matchmaking development strategies. Zhang will also meet with the Minister of Communications and Works of Cyprus, discussing cooperation in the field of energy, infrastructure and tourism.

Bulgaria and Cyprus are both friendly to China and geographically important. The visits will contribute to implementing the economic and trade consensus of the leaders, deepening economic and trade practical cooperation, detecting and solving the disadvantages of bilateral economic and trade cooperation and development, strengthening the matchmaking with the development plans of the two countries, driving the industrial upgrading and transformation and economic development of the two countries, strengthening international capacity cooperation and connectivity cooperation, further promoting the healthy development of bilateral economic and trade relations, and bolstering the multilateral cooperation mechanism of “16+1” and cooperation regarding the strategy of “Belt and Road”.

VIII. “Month of Integrity in Business Prosperity in 2016” Campaign

Since 2005, the Ministry of Commerce, together with 18 departments and ministries including the Publicity Department of CPC Central Committee and Development and Reform Commission has conducted the “Month of Integrity in Business Prosperity” Campaign in September and October for 11 consecutive years, building an important platform for preaching the value of honesty and credibility to the public .

In 2016, we will arrange the campaign according to the requirements that honesty and integrity should serve economic development, and we should also follow the principle that the campaign should be economical, simple and more influential, showing innovation and vitality. Firstly, combining the current economic situations, the theme of the publicity month is settled as “Promoting Consumption through honesty and Integrity”. All the activities should be conducted around the theme, so as to promote economic development and optimize the social credit system. Secondly, promote through activities. By conducting key activities, we will do a good job in the publicity of activities, so as to expand the influences of the publicity month. Thirdly, forge a publicity network both online and offline. We will innovate the publicity modes. On the basis of strengthening the publicity through the traditional media like TV, broadcast and newspaper, we will make efforts to forge an internet publicity system, using new media such as Weibo, wechat and news browser on the phone to carry out activities like Q&A with award and policy interpretation, giving a full play to the the influences of internet media.

During the publicity month this year, the Ministry of Commerce planned to carry out two theme activities with features and highlights. The first one is “Online Integrity Exhibition”. Since the State Council issued the Outline of Construction of Social Credit System (2014-2020) in 2014, the construction of social credit system has been speeded up. To publicize the achievements of credit construction, on September 20, we will carry out an exhibition on the network of China market order. The main contents of the exhibition are credibility culture, the construction progress of social credit system, the construction of business integrity, the development of credit economy and the achievements of the related departments, associations and local governments on credit construction. The second one is the theme day of credit consumption. In the new situation that China’s economic development enters into new normal, it will provide new power to consumption growth to promote the development of credit consumption which has real demands and loan repayment ability, and release consumption potential. China’s construction of social credit system is constantly promoted, which also creates better conditions for credit consumption. On September 28, local commercial departments will organize e-commerce enterprises or entity business enterprises for the theme day of credit consumption, introducing credit consumption products, and providing consumption privilege to customers with good credit to embody the concept of “faith-keeping encouragement” and “Good faith is valued”. Since 2016, we will have the theme day of credit consumption every year on September 28, and make it a regular activity of the publicity month for the new consumption highlight.

IX. About China’s Statistical Communiqué of 2015 on China Direct Investment Overseas

With the rapid growth of China’s investment overseas, related statistics were widely concerned by the public. According to the arrangement, the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange will hold a Special Press Conference at the Information Office of the State Council on September 22, and release China’s Statistical Communiqué of 2015 on China Direct Investment Overseas, to introduce the situation of the Chinese enterprise investing overseas in 2015. I hope you could pay attention to it and make positive reports.

All above is the information I want to introduce. Next, you are welcome to ask any questions.

CBN: It was reported that the persistent decline in foreign milk price has made foreign milk more competitive than domestic milk, leading to rising dairy imports that impacted domestic market. What is MOFCOM’s view about it? In addition, we have just learned from you briefings on inward FDI that the central and western regions had suffered a marked decline. What is the reason? Thank you.

Shen Danyang: On your first question, according to customs statistics, China imported 1.383 million tons of dairy products in July, up by 29.1% year on year, with a value of USD 3.96 billion, up by 13.5%. Either in terms of the volume or value of imports, there was a major increase. Why? We believe there are three reasons:

Firstly, the import base of the same period last year was relatively low. In 2015, there was a rise in dairy inventory and a marked drop in import volume due to economic slowdown and falling consumption. Because of the low base numbers, this year’s import volume and value rose remarkably, although they were both slightly down from the levels of the same period in 2014 (There were 1.385 million tons of dairy imports valued at USD 6.13 billion during the same period in 2014).

Secondly, there was a major price gap between domestic and foreign dairy products. In July, the average price of dairy imports to China dropped by 12%. Due to differences in raw material price, farming costs and productivity, costs of the dairy products made from domestic raw milk are higher than the costs of like imported products.

Thirdly, consumers still lack a bit of confidence in domestic dairy products. Since the melamine incident, domestic consumers’ confidence in domestic dairy products is still lacking. Therefore, some consumers still prefer imported products especially imported baby formula.

Dairy is a product that is under free trade arrangements. Its import depends on market demand and product competitiveness vis-à-vis like products in the domestic market. Tackling the problems facing the Chinese dairy industry requires the comprehensive implementation of both long-term and short-term measures, the transformation of development models, improvement of product quality so as to shore up consumer confidence and raise the competitiveness of the entire industry. MOFCOM will further strengthen the monitoring of dairy imports, follow closely the trend and price movement of dairy imports, and timely publish relevant information so as to guide the orderly importation by enterprises.

On the other question, which is about the decrease in FDI in the central region, we still need to do some detailed analysis to find out the main reasons since each province in the central region is different. However, here are two basic reasons that can be of some reference for you: First, the base numbers. Inward FDI in the central region grew rather rapidly over the past few years. Second, the main area of growth for the inward FDI is now the services sector. Yet this year FDI in the services sector mainly flowed to developed provinces in the coastal region. Thank you for your questions.

Phoenix Satellite TV: I have two questions. First of all, you mentioned that the Fifth Ministerial Conference of the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries (Macao) would be held next month in Macao. I would like to ask about some of the central government’s support measures for Macao to become a platform for business cooperation between China and Portuguese-speaking countries. Second, the figures for foreign trade in August are particularly bright, but if measured in US dollars, almost every figure falls by 8% against the yuan, which is just the same rate of decline in the central parity of the renminbi against the dollar. Some analysts believe that the main reason for the bright trade figures is the way pricing was measured. If seasonal factors are excluded, then measured in dollars, the three figures have almost all reached a decline of more than 6%, meaning that foreign trade is still quite sluggish. Could you please analyze this specifically? Thank you.

Shen Danyang: I will answer the first question first. On the Fifth Ministerial Conference of the Forum Macao, the central government strongly supports the development of a platform for business cooperation between China and the Portuguese-speaking countries in Macao, which is clearly defined in the 12th Five-Year Plan and the 13th Five-Year Plan. This is the central government's positioning of the Macao SAR in the overall national development strategy. An important purpose of choosing Macao as the permanent host of Forum Macao is to support the building of the Macao platform.

In recent years, with the strong support of the central government, and with the support of the Forum Macao, the Macao platform has made positive progress. The China-Portuguese-Speaking Countries Economic and Trade Cooperation and Talent Information Network was launched as a platform network; while the Sino-Portuguese Business Service Center for Small and Medium Enterprises, the Portuguese-speaking countries food distribution center and the China-Portugal Economic and Trade Cooperation Exhibition Center rely on the website to provide online services for enterprises. Portuguese-speaking Countries Food Exhibition Center as an offline entity was also put into operation in Macao. In addition, the Ministry of Commerce, the General Administration of Quality Supervision, Inspection and Quarantine and the Macao SAR Government also set up a joint task force to study and solve the policy issues concerning the building of the Portuguese-speaking countries’ food distribution center. Macao will give full play to the unique advantages of linking China and the Portuguese-speaking countries. Its role as a platform in Sino-Portuguese bilingual talents training, trade and investment promotion, human resources training, information consultation, legal and financial cooperation between China and Portuguese-speaking countries has come into focus.

The development of the Forum Macao and the building of the Macao Platform are mutually reinforcing and mutually supporting. The Macao SAR Government and the various sectors of the community have done a lot of fruitful work for the development of the Forum Macao. Such efforts were highly recognized by all the participants. At the same time, the Macao platform has also been developing by leaps and bounds, with a growing international influence.

On foreign trade, the situation you talked about requires in-depth analysis. For more than two years we have used the renminbi in foreign trade import and export statistics and comparative analysis. Because the values of the US dollar and the renminbi constantly change and fluctuate, especially the dollar, using the renminbi in comparative analysis is a more scientific and reasonable approach.

In the first eight months of this year, total imports and exports fell by 1.8%, of which exports fell by 1%, imports fell by 2.9%. In other words, so far imports and exports still have negative growth. Therefore, we do not need to make the analysis in US dollars to recognize that we cannot be blindly optimistic about the foreign trade outlook.

We are also clearly aware that, now is not the time to relax, the difficulties are not short-term, uncertain and unstable factors are still increasing, the downward pressure on foreign trade still looms very large, and this year's foreign trade situation is still complex and severe. Of course, it can be seen from the data from these months, especially from August, that as the country’s policy measures to promote stable foreign trade gradually pay off, you can clearly see the results over the past few months if all is measured in renminbi. Declines of imports and exports have actually continued to narrow over the past months. What does it mean? It indicates that China's foreign trade continues to maintain a stabilizing trend.

As we have already mentioned, even if things are stabilizing, we cannot be blindly optimistic or lax. So in the coming months, MOFCOM will continue to work with various departments and regions to further focus work priorities and efforts, ensure good implementation of a series of policies and measures previously introduced, effectively reduce the burden for the enterprises, and strive to achieve the goal of stabilizing and growing foreign trade.

CCTV: Recently many foreign media, financial institutions and big businesses claimed that China has halted its opening up efforts, and that the investment environment has been deteriorating, unfair to foreign-investment enterprises, and that their returns on investment in China were close to exhaustion. How does MOFCOM comment on this? Thank you.

Shen Danyang: There were some foreign media saying recently that the investment environment in China has deteriorated. In my view, this kind of argument is generalization and cannot reflect the overall picture of China's investment environment.

How does China’s investment climate look? China’s FDI grew by 6.4% last year and 4.5% in the first two quarters this year, becoming the largest developing country in terms of actual FDI utilization for 24 years in a row. A survey by American Chamber of Commerce in China indicates that over 60% of Amcham China’s members choose China as one of the top three destinations of investment in the world and 68% of them have plans to expand business in China. Multinational companies actively participating in the recently-held B20 in Hangzhou and the CIFIT in Xiamen speaks to their confidence in investing in China.

But still there are complaints and criticism. We gather the main reason is that the foreign invested enterprises which quite depend on low cost and preferential policy treatment have run into difficulties in operating and some seen profits falling. Why is that? I’m afraid we cannot jump to the conclusion that China’s investment climate is getting worse. Instead of believing China’s investment context is deteriorating, objective and rational analysts at home and broad argue that the challenges facing those FIEs in China are largely caused by dwindling comparative advantages, which can be further attributed to a slowdown in global market demand and China’s economic growth, a rise in the cost of production factors in China, a cut in the preferential policies tilting towards FIEs, increasingly intense market competition and others.

The truth is that since China’s new leadership took office, ministries under the State Council have abolished and delegated to lower levels 618 items subject to administrative review and approval, representing 36% of the total number of items that need administrative approval. Last year, MOFCOM worked with relevant ministries on revising the Catalogue of Industries for Guiding Foreign Investment, slashing half of the restrictive category, the biggest revision that has not been seen before. The special administrative measures in the negative list for the pilot free trade zones in Shanghai and other places have been brought down from 190 to 122 and will be further reduced. Not long ago, the NPC Standing Committee deliberated and adopted four amendments including Law on Chinese-Foreign Joint Ventures. From October 1 2016, the negative list approach will be used for foreign investment administration nationwide. For the areas that are not on the list, foreign investors need to file for records on establishing companies and making alterations without undergoing the review and approval procedure, thus providing much wider access and facilitation for foreign investment. With regard to intellectual property, we have formulated and revised 12 laws and regulations such as the Law on Trademark and the Law on Protection of Consumer Rights and set up three IP courts in Beijing, Shanghai and Guangzhou. We have launched over 150 special campaigns, investigated and handled 1.077 million violation and criminal cases, filed 63,000 suits and brought 78,000 people to trial. These efforts have ensured a more regulated, transparent and fair legal and policy environment for FIEs in China. FIEs that care more about preferential policies and chase after fast money may have an impression that China’s investment climate had gone worse but those with far-sightedness, competitiveness and willingness to grow business in China for the long run believe that China has improved its investment environment.

That being said, I think it is still necessary to reiterate Chinese government’s commitment to adhering to the policy of attracting FDI actively and effectively, maintaining consistent and stable foreign investment measures, taking care of the concerns of FIEs and building a more fair, transparent and predictable investment environment. The field of foreign investment will open wider instead of narrowing. China’s investment climate will only improve instead of deteriorating. As long as FIEs grasp the huge opportunities of economic growth and technological and consumption upgrading, adjust investment plans, innovate ways of doing business, they will achieve bigger success in Chinese market.

[Shanghai Securities News]: The 22nd meeting of 12th NPC Standing Committee just discussed and ratified an Amendment to the Tariff Concession Schedule of China’s WTO Accession Protocol. It is reported that before long China will begin to gradually decrease and finally remove tariffs on 201 IT products imported from WTO members. Could you please brief us on this?

The Amendment to the Tariff Concession Schedule of China’s WTO Accession Protocol you mentioned has been reviewed and approved by the State Council and ratified at the 22nd Meeting of the 12th National People’s Congress Standing Committee. Since September 15 2016, China has applied first tariff cut to the 201 IT products subject to the MFN rate listed in the Amendment. These products are under more than 480 tax numbers in China’s tariff schedule, including next generation multi-component integrated circuit, touch screens, semiconductors and producing equipment, audio visual products, medical devices and instruments, components and raw material for making IT products. Most of tariffs of the IT products on the list will be reduced to zero within three to five years and a handful of them within seven years. You may find the tax categories and rates for the first tariff cut on the website of China’s Ministry of Finance.

The cut is to implement the results of the expanded Information Technology Agreement negotiations under the WTO. On December 16 2015 during the MC10, 24 participants including China announced to close the expanded ITA talks in a joint declaration, pledging to add 201 IT products to the 1996 ITA. According to the WTO statistics, trade in the products concerned represents over 10% of the global trade in goods with over US$1.3 trillion.

As the world’s largest producer and exporter and the second biggest importer of IT products, China is an important player in the global value chains of IT products. Reaching an expanded ITA deal and the follow-up implementation will have a major impact on the industrial transformation and upgrading as well as stable growth in foreign trade in China. Thank you for your question.

[International Business Daily]: This year has witnessed a surge of China’s trade frictions. Would you please say a few words about trade remedy investigations facing China’s exports in the first eight months this year?

In the first eight months this year, 20 countries (custom territories) have initiated as much as 85 trade remedy cases against China’s exports with US$10.321 billion in question, a year-on-year increase of 49% and 94% in quantity of cases and value respectively. Besides, the United States initiated fifteen 337 investigations on China’s products.

A look at the type of products concerned tells us that remedy investigations largely concentrate on steel, light industry, chemical industry, textile and others. Steel-related cases are more than the others with 35 involving US$ 5.886 billion, accounting for about half of the total cases in the same period this year and increasing by 40% and 63% in the quantity of cases and value respectively.

The United State and India filed more trade remedy investigations on China than others with 18 and 15 respectively with the highest value involved.

It is high time the international community worked more closely with each other to surmount difficulties of sluggish global economic recovery. Using trade remedy measures at every turn does not help economies recover and grow. G20 Summit just closed in Hangzhou reiterated the commitment to reducing and not adopting new trade protectionist measures and extended the pledge to the end of 2018. Committed to dialogue and cooperation for common development as always, China is ready to cope with trade frictions through consultation so as to create a sound environment for global economic growth. Thanks for your question.

International Business Daily: Could you brief us on the consumption data during the recent Mid-Autumn Festival? Besides, are there any new characteristics and changes of the consumption during this festival?

Shen Danyang: I don’t have the consumption data during the 3-day Mid-Autumn Festival at the moment. Later on, I will instruct the News Office to contact relevant departments to ask for information. If there is detailed data we will release it online.

Economic Daily: Recently, super typhoon Meranti has struck Fujian Province, leaving a number of cities badly hit. Has the market supply in disaster-stricken areas been affected? What measures has MOFCOM taken to ensure the supply of support materials? Thank you.

Shen Danyang: Due to the influence of super typhoon Meranti, the pork and leaf vegetables are in relatively tight supply in some cities in Fujian Province. The supply of other vegetables and non-staple food basically remains at the normal level.

In response to this super typhoon, MOFCOM set up a 24-hour duty mechanism. In accordance with the instructions of the State Flood Control and Drought Relief Headquarters, we immediately launched market supply work mechanism for disaster-stricken areas. The Commercial Department of Fujian Province held meetings to discuss how to provide disaster relief and safeguard market supply, and relevant municipal commercial departments timely activated market supply emergency plans. In the worst-hit Xiamen, large supermarkets resumed business at noon on 18th. More vegetables were transferred there, and daily necessities are in stable supply.

Next, MOFCOM and provincial and municipal commercial departments will on the one hand step up monitoring, closely follow the market, and on the other hand spare no efforts to guarantee market supply. We will strengthen the monitoring of commercial logistics businesses such as wholesale markets, supermarkets and restaurants to get timely information on the changes of supply and prices of daily necessities. Leaf vegetables were transferred from less affected areas to more severely affected areas through coordination. Now five hundred tons of vegetables are transferred from neighboring provinces every day. Xiamen Municipality also activated fair-price shop mechanism, and is prepared to put frozen meat reserve on the market. We are confident that the market supply in disaster-stricken areas will remain stable. Thank you.

China National Radio: My question is about the efforts of building a new open economic system. The comprehensive pilot experiment has been launched for some time. According to media reports, some pilots have taken forceful reform measures. Not long ago, you also mentioned that the experiment had a good beginning. So could you please brief us on the new progress of the pilot experiment?

Shen Danyang: Since the comprehensive pilot experiment of building a new open economic system was launched in May this year, with the joint guidance and efforts of MOFCOM and NDRC, the twelve pilot experiments are moving ahead steadily.

Last week (Sept 12-13), we held meetings in Nanchang on the exchanges and promotion of comprehensive pilot experiments, where the twelve cities and regions shared the situation of their pilot experiments, and instructions were made regarding work in the next stage. I attended that meeting. From what I heard at the meeting, though it’s only three months since the experiments were launched, most of them have undertaken bold reform measures, and achieved fruitful results.

First, the regions that host the pilot experiments attach great importance to this work, and all of them issued reform implementation plans centered on “self-reform”, and set up relevant working mechanisms for comprehensive resource integration.

Second, the pilot regions formulated their reform plans according to their own situations. The plans, which all own distinctive features, have many highlights. For instance, to press ahead with clearance facilitation, Nanchang Municipality takes the lead in carrying out the new inspection and quarantine model of “release upon declaration” and “release upon verification”, so that every batch of export goods can go through inspection and quarantine and be released within 5 to 7 days. Nanjing Municipality also makes explorations to build a tax service hall that integrates national and local tax businesses, to realize the service model of “one window, two systems, received together, processed separately, and one-stop for all tax-related businesses”. The Pudong New District, among its efforts to adapt itself to the big trend of the integration of scientific and technological innovation and industrial development, set up the first Science and Technology and Economic Committee in China, and is trying out the public governance structure based on “shared governance of the industry plus statutory bodies” in order to push forward the transformation of government functions and administration models. Jinan Municipality set up an investment promotion agency dedicated to both FDI and domestic investment in accordance with the principles of professional agency, professional team, concentrated power, unified measures at different levels, and delegation of power. Across the municipality, a platform for market entity interim and ex post regulation and service is launched officially. The 43 departments, 332 administrative licenses and 147 other administrative and service items have all realized “one number for application, one window for handling businesses, and one website for all businesses”, increasing average efficiency by 45%. Jinpu New District of Dalian Municipality has put into trial practice since June this year simplified registration cancellation for companies, reducing the time needed from 45 days to 16 days, and cutting required materials by 60%. Twelve items for examination and approval can be handled through WeChat. Zhangzhou Municipality started building a business opportunities match-making center, and opened 24-hour “business 110”, among its efforts to comprehensively optimize government services, delegate suitable public services and problem solving functions of the government to trade associations and chambers of commerce, and explore the model of “one industry one association, industry belongs to association”. Fangchenggang Municipality put forward 5 measures to actively push forward overseas labor cooperation reform and accelerate the reform pilot process to transform and upgrade borderers’ trade. Tangshan Municipality established a mechanism for companies to set up industrial parks overseas to drive outward investment and export and advance international cooperation on advantageous capacity. Wuhan city circle made explorations to establish a target-and-performance-based assessment system centered on innovation and aimed at promoting development through opening up

Shen Danyang: Third, as reform measures of the pilots roll out, some pilot regions have already seen initial results. In Dongguan Municipality, the export value in the first half of this year is 2.5 percentage points higher than the national average, the contract value of newly signed FDI projects involving above US$ 10 million is up by 156% year-on-year, and the contract value for service outsourcing is 171% higher than that of the last year. Jinan Municipality realized an 18.5% year-on-year increase of import and export in the first 7 months of this year, with import and export growing together. The Liangjiang New District in Chongqing Municipality witnessed an 18.5% increase in the utilization of FDI in the first 7 months this year. Suzhou Industrial Park was the first to adopt the new administration model that focuses on filing and supplemented by verification. In the first half of the year, the Park invested in fifty-five overseas projects, and its newly approved outward investment increased by 94.5%. Xixian New District in Shaanxi Province was the first to achieve “one-stop for reception, one website for examination and approval, and one code for one project” for investment projects. In the first 6 months, the online examination, approval and regulation platform received 156 applications and completed 104 of them, involving a total investment of 23.6 billion RMB.

In the future, the twelve comprehensive pilot experiment regions will concentrate their efforts on the following 4 aspects: first, focus on main responsibility, and create an atmosphere that encourages brave reform and bold exploration. Second, focus on core tasks, and endeavor to remove systemic barriers that restrain opening up and development. Third, focus on implementation of reform, and step up target-based assessment and supervision coordination. Fourth, focus on consolidation of results, and establish information reporting mechanism to advocate the latest results of the pilots in a timely manner.

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

(All information published on this website is authentic in Chinese. English is provided for reference only.)