IV. The "13th Five-Year" Plan of Service Trade Development

To promote the structural reform of supply side of service trade, to optimize the service trade system mechanism, and to improve the opening degree and facilitation level of service trade, the MOFOCM, together with other 13 departments, has recently issued the "13th Five-Year Plan of Service Trade Development.

The Plan defines six major tasks such as improving development system, optimizing industrial structure, developing market entity, cultivating innovation strength, expanding opening up and cooperation and perfecting supervision system. It also puts forward guarantee measures in five aspects such as optimizing business environment, improving promotion system, perfecting cooperation mechanism, strengthening talents support and reinforcing statistical assessment.

The Plan mainly has the following features:

Firstly, highlight the structural reform of supply side of service trade. Constantly improve service supply level, strengthen international competitiveness of service trade and fully play the important role of service trade in economic structure adjustment and transformation and upgrading.

Secondly, highlight the innovative development of service trade. Vigorously promote the pilot of innovative development of service trade, accelerate exploring and building up management system, promotion mechanism, policy system and supervision mode adapted to the innovative development of service trade.

Thirdly, highlight the interactive development between service trade and trade in goods, foreign investment and service industry. Promote the orderly opening of service industry and promote the Chinese service to positively and steadily go abroad.

Fourthly, highlight the leading role of important fields of service trade. Focus on 24 important fields of 12 categories with distinct advantages and great potential and promote comprehensive and profound development of service trade.

With regard to the specific content and detailed interpretation of the Plan, please pay attention to the website of the MOFCOM.

V. Development Situation of Cultural Trade in 2016

In 2016, China's foreign cultural trade and investment enjoyed a rapid development and the international influence of Chinese culture continued to be strong. The total import and export volume of cultural products in the whole year reached US$88.52 billion, among which the export reached US$78.66 billion, realizing a surplus of US$68.8 billion. The export volume of cultural entertainment and advertisement service in the cultural service export registered US$5.43 billion, with an increase of 31.8%. The foreign direct investment of culture, sports and entertainment industry was US$3.92 billion, with an increase of 188.3%.

The structure of foreign cultural trade showed obviously optimized adjustment and the export proportions of cultural contents, core technology and standard were greatly improved. The pace of cultural trade's going abroad was constantly accelerated and books, movie and television plays and online games sold well.

Next, MOFCOM will get together with relevant departments to make efforts to expand channels and platform, vigorously develop foreign cultural trade, introduce to the world more outstanding culture with Chinese characteristics, Chinese spirits and Chinese wisdom and constantly improve the soft power of Chinese culture.

Q: On March 7, US Secretary of Commerce announced that China’s ZTE has admitted that it illegally shipped its products to North Korea and Iran in violation of US foreign trade control regulations. ZTE agreed to a penalty of $1.19 billion, the largest fine ever levied by the U.S. government in an export control case. What is the view of MOFCOM on this issue?
　
A: We have taken note of the settlement reached by ZTE with the US government on the export control case. China always firmly opposes US sanction against Chinese enterprises based on US domestic laws. The Chinese government always asks Chinese enterprises to abide by local laws and regulations in their operations when exploring overseas markets. We hope that by safeguarding the general picture of China-US trade and economic relations, the US will handle this issue properly and create a sound environment for the stable and healthy development of bilateral trade and economic relations.
　　
Q: On March 1, the Office of the U.S. Trade Representative (USTR) submitted the 2017 Trade Policy Agenda and 2016 Annual Report to the Congress, stating that China’s accession to the WTO damaged US economic interests and the US will turn to bilateral negotiations from multilateral ones and depend less on the WTO Dispute Settlement Body. What is the view of MOFCOM on this?
　
A: We have taken note of the Trade Policy Agenda released by the USTR. I would like to share two observations:

First, China-US trade and economic relations are mutually-beneficial and win-win in nature. China is not the only beneficiary of China-US trade. Since China and the US established diplomatic relations, the bilateral trade and economic relations achieved huge progress and brought substantial benefits to the two countries and two peoples. In terms of trade in goods, the exports of the US to China grew fast. In the past ten years, the export of the US to China grew by 11% on average. China is the fastest growing export market for the US outside North America. In terms of trade in services, from 2001 to 2016, the exports of services from the US to China grew by 15 times and trade surplus up by 29 times. According to the statistics of National Council for U.S.-China Trade, China-US trade supports 2.6 million US jobs and improves the welfare of US citizens. In terms of investment, the US gained huge benefits from China-US two-way investment. By the end of 2016, the accumulated non-financial direct investment made by Chinese enterprises in the US went near USD 50 billion. These investments could be found in 44 states in the United States, creating nearly 100,000 jobs for the US. The investments made by US in China also delivered huge benefits to US enterprises. The China Business Environment Survey Results released by US-China Business Council in October, 2016 showed that 90% of US-funded enterprises are profitable in China.

Second, economic globalization is an irreversible historical trend. It results from growing social productivity and is the natural outcome of scientific and technological advances. Just like what President Xi Jinping stated, in today’s world, pursuing protectionism is like locking oneself in a dark room, while wind and rain may be kept outside, so are light and air. No one will emerge as a winner in a trade war. The US mentioned repeatedly that it will safeguard fair trade. We believe that only trade consistent with WTO rules could be considered as real fair trade. We stand ready to safeguard WTO rules and constantly improve international economic governance system with the US.
　
Q: The 2017 Trade Policy Agenda and 2016 Annual Report of the US mentioned that the Trump Administration will ignore the WTO rulings that it considers in violation of US sovereignty. What is the comment of MOFCOM on this?
　
A: The multilateral trading system, represented by the WTO, provides a sound institutional guarantee for the orderly and stable development of global trade. In the past 70 years, the multilateral trading system provided a strong boost to international trade liberalization and facilitation. In particular, during the global financial crisis, it monitors the trade policy trends of its members and carefully handles trade disputes between members, serving as the mainstay for curbing trade protectionism and promoting global economic recovery.

Rulings of the WTO dispute settlement mechanism are enforceable and “have teeth”. The disregard of WTO rules and defiance of WTO rulings by its members out of its own interests will render the multilateral trading system as good as dead, and may even lead to the repetition of trade wars in the 1930s.

China is a staunch supporter of the WTO-centered and rule-based multilateral trading system, and a firm advocate of the authority of open, transparent, inclusive and non-discriminatory WTO rules. We call on major WTO members to take the lead in obeying WTO rules, fulfilling member obligations, and safeguarding the authority and credibility of the WTO, with a view to consolidating its important position in global economic governance.

Question: On Feb 28, the European Commission issued the final ruling which subjects Chinese thick steel plates to anti-dumping duties as high as 65.1-73.7%. It is said that the EU is carrying out trade protectionist measures targeting 41 steel products, 18 of which originate from China. How does MOFCOM comment on this?

Answer: On Feb 28, the European Commission made the final ruling on thick steel plates originating from China, deciding to impose 5-year anti-dumping duties ranging from 65.1% to 73.7%. China has serious doubts about this decision as well as the methods adopted by the European Commission that led to such high rates. The European Commission continued to use “surrogate country” method in its investigation, seriously impairing the legal interests of Chinese companies. China urges the EU to fully fulfill its international treaty obligations under the WTO framework, terminate the practice of “surrogate country”, and accord fair, just and non-discriminatory treatment to Chinese businesses.

China expresses grave concerns over the EU’s trade protectionism in the steel sector, and reserves the right to take necessary measures to safeguard the rights and fair treatment of China’s exporters. China believes that China-EU steel trade is mutually beneficial. China’s steel products help boost infrastructure of the EU during time of crisis, bring tangible benefits to EU consumers and some EU enterprises, and enhance the global competitiveness of EU downstream businesses. At present, sluggish global economic recovery and weak demand is the fundamental reason behind the doldrums of the steel industry. The EU’s claim that the current difficulty of the steel industry is attributed to China’s steel export is completely groundless. Therefore trade protectionism is not the way out for EU steel industry. China has always opposed trade protectionism. We hope that the EU will take a cautious, restrained and rule-based approach in initiating trade remedy investigations and taking trade restrictions, strictly obey WTO rules, and carry out trade measures in a fair, just and transparent manner.

During last year, in the spirit of win-win cooperation, China and the EU, as strategic cooperative partners and mutually important trading partners, stepped up communication and controlled differences, explored new cooperation areas, and made the cake of China-EU cooperation bigger by making full use of bilateral mechanisms such as China-EU Leaders’ Meeting and China-EU High Level Economic and Trade Dialogue. Commercial cooperation between China and the EU grew steadily on the whole. China stands ready to strengthen cooperation with the EU to jointly oppose trade protectionism and create a more favorable environment for global economy.