On January 5, the Ministry of Commerce held the regular press conference. Spokesman Sun Jiwen answered the hot and sensitive questions to the high concern of both domestic and overseas media.

I. About The Notice on Strengthening the Supervision Work of Environmental Protection Standard of Second-Hand Car Jointly Issued by the General Office of the Ministry of Environmental Protection and the General Office of the Ministry of Commerce

On December 29 2016, the General Office of the Ministry of Environmental Protection and the General Office of the Ministry of Commerce jointly issued The Notice on Strengthening the Supervision Work of Environmental Protection Standard of Second-Hand Cars, requiring the local governments to strictly implement the regulations of The Opinions of the General Office of the State Council on Promoting Convenient Transaction of the Second- Hand Cars(Document of the General Office of the State Council NO. 13, 2016). It is regulated that as long as the regular inspection of environmental protection and safety inspection of the motor vehicles are valid, and the motor vehicles meet the emission standards of the environmental protection inspection of the place moved in, the local governments should not set any other limit measures. The major areas of atmospheric contamination prevention and control determined by the government and the motor vehicles that should be obsoleted according to the requirement of the government (yellow-labeled cars) are excluded.

The government work report of 2016 pointed out clearly the activating of the market of second-hand cars. Document No. 13 also required that a free circulation market of second-hand cars should be created, the local governments should not formulate and implement policies to limit the migration of second-hand cars, and the implemented measures should be cancelled. The Notice issued by the Ministry of Environmental Protection and the Ministry of Commerce is a specific measure to implement the requirements of the government work report and Document NO. 13. It is of great significance for the local governments to understand the spirit of Document NO. 13 and cancel limit measures of the migration of second-hand cars. It is also of active function to the activating of second-hand cars’ market and to the more convenient consumption of the people.

Next, the Ministry of Commerce will coordinate with the Ministry of Environmental Protection to do the work of supervision and inspection, so as to push local governments to cancel limit measures of the migration of second-hand cars and ensure the policies to activate the market of second-hand cars are really implemented.

II. About the Third Tax Reduction of China-Australia FTA

Since January 1, 2017, China-Australia FTA has conducted the third tax reduction, after which the Chinese enterprises and consumers would enjoy more tax preference. In terms of export, after the third tax reduction, the proportion of free tax items in Australia would reach 98.5%, China’s exported superior products including textile and clothing, auto parts, part of steel and steel products and household appliances will enjoy more favorable tax. In terms of import, the tax of part of products imported from Australia like beef and mutton, seafood, dairy products, nuts, fruits and wine will be further reduced. The consumers will benefit more.

The implementation of China-Australia has gained good effects over this year. We believe that the third round of tax reduction will bring more substantial benefits to the enterprises and consumers of the two countries, and will promote the healthy development of bilateral economic relation.

III.The 6th WTO Trade Policy Review of China

The WTO Trade Policy Review is one of the three major functions of the WTO along with multilateral negotiations and dispute settlement. According to the WTO rules, all members’ trade policy and doings shall accept regular review. To ensure the trade policy review mechanism to get on well, the WTO will assess them un-periodically to adjust and perfect the relevant rules. It can have long-term and systematic impact on all members’ engagement in WTO review. That is significant.

With China’s positive promotion and the concerted efforts of the WTO members, the WTO completed the 6th Trade Policy Review of China on December 21, 2016, and all members agreed to pass the largest reform plan on review mechanism since China’s accession to the WTO on the basis of common decision. The most important part is to change the present review term into three years, five years and seven years from two years, four years and six years respectively, which will be implemented gradually from 2019. The reform will help the reviewed members effectively organize and prepare for review work and better promote its trade policy and development achievements. It also helps other members make full use of the review mechanism and follow the reviewed members’ trade system and policy in a more meticulous and deep-going way. The Chinese side would like to join efforts with all WTO members to firmly safeguard and perfect the multilateral trading system and continue to play a constructive role.

IV. China’s Coping with Foreign Trade Remedy Investigation and Safeguarding Domestic Industrial Safety

In 2016, China has been troubled by 119 trade remedy investigation cases launched by 27 countries (regions), among which there were anti-dumping cases, 19 countervailing cases and 9 protective measures. That has involved US$14.34 billion, with quantity and value going up 36.8% and 76% respectively year on year. Among these, half cases were aimed at Chinese steel products, a total of 49 cases were launched by 21 countries (regions), involving US$7.895 billion, with both quantity and value going up 32.4% and 63.1% respectively. Other products with more trade frictions are mainly in chemical and light industries.

In general, China’s trade friction in 2006 took on three characteristics: 1. The number of trade remedy cases that China suffered hit a record high. 2. Major industries like PV industry, ceramic products and tyre products were troubled by more than one country. 3. Trade frictions tend to be politicized with extreme measures, and the final ruling rate is generally high.

Facing constantly surging trade frictions, MOFCOM made active efforts to cultivate fair trade environment. In 2016, we have strived for non-measure result for over 30 trade friction cases, saving an export market of US$3.4 billion for domestic enterprises, easing the impact on domestic industry brought by frequent trade frictions. Work in three aspects were made:

1. Various measures were taken to tackle trade frictions in industries such as steel. 337 carbon steel and alloy steel investigation of the United States against China obtained partial results. The investigatory apparatus of the United States preliminarily decided to stop the investigation related to anti-trust charges, tentatively believing that the charge of fabricating country of origin lacked evidence. 18 cases such as the anti-dumping and countervailing case of deformed steel bar and roll bending of New Zealand and the responding work of 332 investigation of aluminum of the United States gained favorable results.

2. Dialogue and consultants and responding mode with innovation were initiated to guarantee a fair trading environment. During the process of responding to the series of photovoltaic cases, Chinese industries went to the EU to go canvassing twice and successfully prevented some appeal some European enterprises from raising the committed benchmark price of China-EU photovoltaic price. They guided Chinese enterprises to launch legal actions in three cases such as the photovoltaic glass of the EU, won the lawsuits, and conducted 14 rounds of negotiations with the United States to promote to properly deal with disputes on photovoltaic products. During the anti-dumping case of ceramic tile of Mexico against China, Chinese industry initiated the mechanism undertaken and implemented by the regulation price of the certificate of origin and contributed to the reconciliation of the case.

3. The remedy measures were implemented strictly through
abiding by the WTO rules and the Chinese laws and regulations when the abroad trade frictions were positively tackled. According to the application of industries, we started five foreign trade remedy investigation cases last year, twelve reexamination investigation cases, made four original arbitraments and 12 reviewed arbitraments. Those effectively safeguarded the safety of Chinese industries.

Trade remedy measure is a double-edged sword. Against the current big background that the world economic recovery is weak, we hope that all countries can use trade remedy measures prudently and standardly with restraint. We are willing to work with all countries to resolve frictions through ways such as negotiations and communication and industrial cooperation, strive to overcome the pressure that the world economic recovery is weak and jointly promote the prosperity and development of the world.

V. General Situation of Anti-Monopoly Investigation Conducted by MOFCOM in 2016

In 2016, MOFCOM did good job in anti-monopoly law enforcement work of the concentration of undertakings, received 378 declaration cases in total, registered 360 causes and concluded 395 cases, with an increase of 7.4%, 6.5% and 19% respectively, creating a new high since the implementation of the anti-monopoly law. In the industrial distribution of cases, manufacturing industry was the heaviest, accounting for 53% of the concluded cases. Among these, the cases of semiconductor, telecommunication and high-end manufacturing cases increased fast. From the concentration type, horizontal merges and acquisitions accounted for the highest, reaching 40% of the concluded cases.

MOFOCM approved relevant merger and acquisition cases with additional conditions, safeguarding the fair competition of market involving people’s living standard, protecting the interests of consumers and winning extensive attention and praise from the consumers. MOFCOM also reinforced the strength of investigation into those who didn’t declare cases according to law, made punishment decision on six cases and safeguarded the authority of anti-monopoly law. MOFCOM carefully implemented the reform requirements of “streamlining administration and delegating power to the lower levels, delegating power and strengthening regulation and optimizing service”, strived to improve working mechanism and promoted high efficiency of law enforcement. In 2016, 324 cases were concluded at 30-day preliminary examination stage, accounting for 82% of the total cases, 8 percentage points higher than that of 2015. The declaration of simple cases accounted for 76% of the total declaration. Among the cases registered according to simple cases, about 98.6% cases were concluded at the preliminary examination stage. MOFCOM positively promoted to enforce the law strictly and fairly, created favorable environment for enterprises to carry out merger and operating activities and protected fair competition of market.

The above is the latest situation informed to you. Now, you are welcome to ask any questions.

Q: President Xi Jinping and Premier Li Keqiang made important instructions on the work of the Shanghai Pilot Free Trade Zone, which the press pays a lot of attention to. What will the Ministry do to implement those instructions and any specific measures?

A: Since the launch of the Pilot Free Trade Zone, Shanghai and other related provinces and municipalities have been working in an innovative, bold and proactive manner to establish high-quality investment and trade institutions and systems, further liberalize and innovate the financial sector and build new systems to underpin the open economy. Many exploration and trials of them have made significant progress and over 100 results of their innovative work have been accumulated and replicated for the reference of more experiments. These results are positively commented and acknowledged by the market. This is the result of the care of the CPC central committee and the State Council, the bold reform and innovation of CPC Shanghai municipal committee and municipal government, and the great support and close cooperation of relevant departments of the State Council. So far these departments have formulated nearly 150 policy papers to support the Pilot Free Trade Zone, covering investment, trade ,finance and supervision during execution and afterwards.

Recently President Xi Jinping and Premier Li Keqiang made important instructions which fully recognized the results of the work at the Shanghai Pilot Free Trade Zone and charted the course for the future of the Pilot Zone.

As the next step, the Ministry of Commerce will, in conjunction with the governments of localities that host the experimental zones as well as relevant departments of the State Council, follow the instructions of President Xi Jinping and Premier Li Keqiang to continue the work at the experimental zones. The main work includes: first is to promote the experiments on deeper reform in the four Pilot Zones; second is to accelerate the establishment of seven other pilot zones in Liaoning and other provinces, to complete the submission and approval procedures in relation to the establishment and overall work plan, and to continue the differentiated exploration and experiment; third is to summarize and accumulate best practice of institutional innovation that can be replicated and disseminated; fourth is to ensure that all experimental targets will be attained and best practice be replicated and promoted. While the quality is being improved, the Pilot Free Trade Zones will play a greater role of test field for greater reform and opening up.

Q: The press is very interested in news that in 2017, China will significantly relax control on market access of foreign capital and encourage foreign investors to invest in advanced manufacturing, high and new technologies, energy conservation and environmental protection, and modern services. Could you please share more information?

A: To use foreign capital has always been an important part of China’s state policy of opening up. The just concluded CPC Central Committee’s Conference on the Economic Work reiterated that China will continue to proactively use foreign capital, improve the environment for FDI, and protect the legitimate rights and interests of foreign-invested enterprises. China has remained the biggest FDI destination among all developing countries since 1993 and one of the top 3 FDI destinations since 2008. At present, the Chinese government is speeding up the formation of new institutions and systems to support an open economy, to promote the opening up of all sectors by reducing remarkably the restrictions on market access of foreign investors, to offer stronger protection to the legitimate rights and interests of foreign companies and investors, and to build a law-based, internationally compatible and enabling environment for all businesses.

The Ministry of Commerce has been working with relevant departments to further expand FDI utilization in China.

First is to revise the Catalogue for the Guidance of Foreign Investment Industries. In order to execute the Central Government’s instruction of wider opening up, the Ministry of Commerce and the National Development and Reform Commission, in conjunction with other relevant department, revised the Catalogue 2015 and started to solicit public comments on December 7th 2016. On top of the significant liberalization in 2015, the revised Catalogue reduces the number of restrictive measures from 93 to 62, and relaxes restrictions on market access of foreign capital in services, manufacturing and mining sectors. For the services sector, categories entitled to FDI restriction relaxation include bank-type financial institutions, securities companies, stock and investment fund management companies, futures companies, insurers, and insurance intermediate agencies, categories entitled to FDI restriction elimination include accounting and auditing, architectural design and rating services, and categories entitled to orderly and progressive liberalization include telecom services, internet, culture, education and transport. For the manufacturing sector, restrictions on FDI in the production of rail transit equipment, motorcycle and fuel ethanol and grease processing will be eliminated. For the mining sector, restrictions on FDI in the development of non-conventional oil and gas resources such as oil shale, oil sand and shale gas as well as in minerals and resource industries will be relaxed.
　
The deadline for soliciting public opinions is January 6, 2017. In the next step, we will work with relevant departments to study the opinions and suggestions and step up the revision of the Catalogue. After the revised Catalogue is completed, upon approval of the State Council, it will be publicized and implemented.
　　
Second, on December 28th, 2016, the 159th executive meeting of the State Council deliberated and approved the Circular Concerning Measures on Further Opening up and Actively Utilizing Foreign Investment (hereafter referred to as the Circular). It is a document guiding the utilization of foreign capital at present and in the future. It was put forward by the Ministry of Commerce, National Development and Reform Commission and other departments, based on the opinions of foreign chambers of commerce, foreign enterprises, local governments and business promotion agencies.
　
One of the most important elements of the Circular is to revise the Catalogue for the Guidance of Industries for Foreign Investment and relevant policies, laws and regulations, relaxing policies on market access of foreign investment. In addition, the Circular will also focus on attracting investment, technologies and talents together, making manufacturing sector more attractive to foreign capital, building an open and innovative system and improving the quality and level of utilized foreign capital. To be more specific, the measures include actively supporting foreign capital in joining the “Made in China 2025” strategy and the strategy of innovation-driven development. The policies and measures of the “Made in China 2025” strategy apply equally to foreign and domestic enterprises. We encourage foreign businesses to invest in high-end, intelligent and green manufacturing, and productive services such as industrial design and creativity, engineering consulting, modern logistics, inspection and testing certification to transform and upgrade traditional industries. In particular, local governments are allowed to adopt preferential policies to attract business and investment within their legal authorities, offering support for projects that contribute much to job creation, economic growth and technological innovations. Local governments are given more flexibility to attract more investment according to local circumstances.
　
President Xi Jinping has stressed on multiple occasions that the three basic principles of attracting foreign investment to China will remain unchanged: China stays committed to its policy of attracting foreign investment, protecting the legitimate rights and interests of foreign invested companies and providing better services to foreign investors. China has always believed in actions. I believe that it is clear to foreign enterprises that China is determined to take actions to further open up and create a pro foreign business environment. We have the confidence and the ability to further create a more open, transparent and predicable environment for utilizing foreign capital and affords more protection to the legitimate rights and interests of foreign-invested enterprises and investors, boosting the development of open economy in China.
　　
Tomorrow morning, Vice Minister of Commerce Wang Shouwen will participate in a regular State Council Policies Briefing to elaborate on the Circular. You are welcomed to join the event then.
　　
Q: The State Council decided at the beginning of 2016 that good practice and experience of China (Hangzhou) Cross-Border E-Commerce Pilot Zone will be rolled out. How about the implementation of relevant practice after one year? What are their effects?
　
A: Since 2016, according to the arrangements of the CPC Central Committee and the State Council, government agencies and local authorities have stepped up the program of cross-border e-commerce pilot zone. The institutional innovations of China (Hangzhou) Cross-Border E-Commerce Pilot Zone are introduced to 12 newly established pilot zones, including Tianjin, with fruitful results.
　
First, the transaction volume grew fast. In 2016 up to November, Hangzhou’s cross-border e-commerce exports registered RMB 35.45 billion, up 1.9 fold. Accounting for 12.7% of the city’s total exports, cross-border e-commerce was a key contributor to the stabilizing and rebounding local trade. Second, industrial clustering, transformation and upgrade received a boost. Zhengzhou promotes specialty industrial clusters in surrounding areas, driving clustered development of apparel and furniture and exports by grouping. Third, they enabled the B2B model to grow bigger and stronger. B2B accounts for over 70% of e-commerce-driven imports and exports. Dalian helped to connect over 2000 small, medium- and micro-companies in the Northeast rustbelt to the Internet. Fourth, they offered a fresh and important channel for popular innovation and entrepreneurship. The pilot zone in Hangzhou directly and indirectly created over 100,000 local jobs. Fifth, the trial generated a trove of replicable and scalable experience. The comprehensive pilot zones introduced bold innovations to B2B regulation process, cross-border e-commerce data standards and B2B credit insurance, with a big batch of new experience and practices taking shape.

On top of these hard-earned results, MOFCOM will work with related departments in close communication and collaboration to address problems, provide guidance and services, strengthen research, harmonize work programs and draw up supporting policies to create a sound environment. Bespoke incentives will be introduced to cover the customs, inspection and quarantine, ‘the single window’, storage and logistics, fiscal and tax policy and financial payment. The comprehensive pilot zones have put forward a list of 593 innovative policies. With 334 of them implemented, the delivery rate has reached 56%. The host cities of the pilot zones are working to explore innovation. On the basis of ‘six systems and two platforms’, Hangzhou is upgrading its model by furthering innovation in branding and B2B standards. The 12 new pilot zones, while deploying Hangzhou’s experience, focus on B2B to fit local conditions and set out supporting measures to improve public services and actively foster market players.

Moving forward, we will continue to work with related departments to accelerate the development of comprehensive pilot zones for cross-border e-commerce, so as to attract more small and medium businesses, enable popular entrepreneurship and innovation and power foreign trade transformation and upgrade.

Question: We’ve just celebrated the New Year’s Day. Could MOFCOM share with us some information on market consumption during the festive period?

Answer: During the New Year holiday of 2017, consumption markets across the country grew steadily, featuring bright spots like quality products, culture and leisure and casual dining. With ample supplies of daily necessities and stable prices, the year was launched to a good start.

First, sales of goods saw a steady increase. The holiday season offered good opportunities for online and offline promotions. With the supply of quality goods topped up, household appliances and digital electronics, air purifiers, gold and jewelry and seasonal apparel were among the star performers. For the three-day holiday, Chongqing, Beijing and Shanghai saw the sales of monitored commerce businesses grow by 13.2%, 10.2% and 9.1%.

Second, culture and leisure consumption boomed. Shows, concerts, museums, skating rings and hot springs were wildly popular choices for ringing in the New Year. Visitors for winter fun to Shenyang increased by 1.6 fold over last year, while the show market in Beijing pulled an audience of 146,000 with box office revenues of RMB 29 million.

Third, casual dining thrived. Restaurants lured consumers with special offers for family parties and New Year celebration and fresh menus complete with conveniences such as online booking and delivery. During the New Year holiday, Shaanxi’s catering reported RMB 1.18 billion in revenue, up 12.5% year on year. Sales of key restaurants in Beijing grew 10% over last year.

Fourth, daily necessities are in good supply at stable prices. The prices of grain and oil stayed largely at the same level as the week before the holiday. Meat prices were up slightly, with pork, beef and lamb up 0.1%, 0.1% and 0.2% respectively. Vegetables of thirty varieties were 0.5% more expensive on average.