Dear friends of the press,

Good morning, welcome to the regular press conference of the Ministry of Commerce (MOFCOM). First of all, I have two pieces of information for you.
1. About the pilot construction of the new system of the open economy

The State Council has recently held a special meeting to study the comprehensive pilot construction of the new system of the open economy. MOFCOM is steadily advancing pilot work according to the arrangement of the meeting along with related departments such as the National Development and Reform Commission (NDRC) and related pilot areas.

According to the arrangement for pilot work, MOFCOM conducted independent third-party evaluation of comprehensive pilot work. The evaluation team evaluated and surveyed 12 pilot areas. By listening to introductions made by government departments in these areas, holding meetings, surveying typical pilot entities, issuing a questionnaire, and checking related documents and materials, the team has comprehensively found out the progress, main results, duplicable experience and practices, and problems of their pilot work over the year, as well as related proposals.

The mid-stage evaluation has basically been completed. According to evaluation results, the pilot areas have conducted diverse forms of exploration according to the pilot work plan and in light of local actualities over the year, thus making staged progress in pilot work. The evaluation report submitted by the evaluation team stated that pilot work had produced good mid-stage effects and achieved the anticipated goal overall. On the basis of the mid-term evaluation, we are organizing good experience and practices, such as Zhangzhou's "one-table" reform for investment project evaluation, Dongguan's "two-independent" transformation in promoting processing trade and Nanchang's model of "valuing capital above assets" in capital introduction. We will duplicate and popularize these experience and practices on the basis of further studies and demonstration.

In the next period, MOFCOM will conduct supervision and surveys of the pilot areas along with NDRC, to duly address the problems arising in local pilot work, strengthen horizontal collaboration and vertical linkage, cement the cooperation between central departments and local departments in the pilot areas, and promote the mutual exchange, learning and reference between the pilot areas. On this basis, we will organize typical experience duplication and popularization, and strive to popularize mature experience, to ensure that pilot tasks are fulfilled as scheduled.

2. About MOFCOM's efforts to promote foreign cultural trade

In March 2014, the State Council printed and issued the Opinion on Accelerating the Development of Foreign Cultural Trade. In recent years, MOFCOM has advanced the implementation of documents and related policies along with other state departments and local governments, thus achieving positive effects.
We will focus on the following four aspects:

I Perfecting top-level design and strengthening coordination. We will initiate and perfect the mechanism of foreign cultural trade work contact involving 15 departments, promote the establishment of corresponding working mechanisms in provinces, autonomous regions and municipalities, print and issue the Action Plan for Developing Overseas Cultural Markets (2016-2020). II Perfecting the legal system and strengthen legal guarantee. The Catalogue for the Guidance of Industries for Foreign Investment (2017) further specifies the restrictions on foreign capital access to cultural fields; the Trial Measures for the National Security Review of Foreign Investment in Pilot Free Trade Zones include major cultural fields for foreign investment in the scope of security review; the Measures for Overseas Investment Administration further facilitate foreign cultural investment cooperation. III Intensifying support and expanding market subjects. We will, along with the Propaganda Department of the CPC Central Committee, the Ministry of Finance and other departments, review and accredit key national culture export enterprises and projects, and support cultural service export enterprises meeting requirements. IV Perfecting the promotion system and consolidating working foundation. We formulated the Foreign Cultural Trade Practice Guide, and published the U.S., UK and Russia versions of the Foreign Cultural Trade and Investment Cooperation Guide for Nations (Regions).
China's current foreign cultural trade has the following features:

I. The steady development of cultural trade and investment has become an important way to enhance national cultural soft power. In 2016, China registered cultural product and service imports and exports of 114.21 billion U.S. dollars, and a foreign direct investment of 3.92 billion U.S. dollars in culture, sports and entertainment. A large number of Chinese books, films and television plays sell well in the international market.

II. Cultural trade promoting people-to-people exchanges has become a boost to "Belt and Road" construction. In 2016, China registered cultural product imports and exports of 14.9 billion U.S. dollars with the countries and regions along the "Belt and Road", accounting for 16.8 percent of China's total cultural product imports and exports. A large number of Chinese films and TV plays have been exported to Kazakhstan, Kyrgyzstan, Egypt, the UAE and other countries; some Chinese animated cartoons have become popular with children in Indonesia, Turkey, Vietnam and other countries.

III. The constant optimization of the cultural trade structure has become an important driver of cultural industry development. Cultural trade development has taken on a trend of service orientation and digitalization, and the proportion of cultural service export has increased. In 2016, China's cultural service exports account for 3.1 percent of China's total service exports, up 0.7 percent from 2015. In 2016, the exports of Chinese emerging cultural products including films and television plays, animations and cartoons, and online games were up 25 percent year on year. China exported 10,000 copyrights.

IV. Cultural trade playing a significant driving role has become an important means of promoting the steady growth of foreign trade. Chinese enterprises have exported theme parks to some countries, to enhance their recognition of Chinese culture and products, effectively drive China's design and complete equipment export to these countries, and indirectly drive the export of more goods.

In the next period, we will work with related departments to further intensify work, create favorable environment for cultural enterprises' foreign trade and investment, increase fine Chinese cultural product and service supplies, constantly improve the quality and benefit of cultural trade and investment, and introduce more fine culture showcasing Chinese characteristics, embodying Chinese spirit and containing Chinese wisdom.
That's all for the information, now please ask your questions.

CGTN: It has been reported recently that under the 100-day Plan between China and the US, American rice was allowed to the Chinese market for the first time and the relevant work was under way. Would the spokesman confirm that? If it is true, could you say more about the progress? Thank you.

Gao Feng: Thank you for your question. As you know, the first China-US Comprehensive Economic Dialogue was held in Washington D.C. on June 19, 2017. During the meeting, the Chinese Administration for Quality Supervision, Inspection and Quarantine and the US Department of Agriculture signed the phytosanitary protocol on rice exports, indicating that the two sides have reached agreement on the inspection and quarantine requirements for the US-grown rice entering China. The protocol was the first step towards realizing rice trade with China according to China’s Quarantine Law and Food Safety Law. The other two steps are as follows. First, the US rice exporting companies interested in China’s market should register with the US government and be recommended to the AQSIQ. The AQSIQ-certified mills and storage facilities will be allowed to export rice to China. Second, in order to prevent the intrusion of hazardous organics, the US should heat the rice to be exported by the eligible companies. The technical conditions including the medicines and methods for heating should be evaluated and confirmed by Chinese experts. None of the steps should be omitted. At the current stage, we have only completed the first step. Therefore, the US rice has yet to get into the Chinese market. Thank you.

CRI: What are China’s plans for opening up the market and choosing programs under the Belt and Road initiative in the coming five years? Will more market bodies join the initiative? Will MOFCOM step up support and guidance in this regard?

Gao Feng: Thank you for your question. Since President Xi announced it in 2013, the Belt and Road initiative has received positive responses from more than 100 countries and international organizations and effectively facilitated the orderly and free movement of economic factors, efficient resource allocation and step-by-step market integration in relevant countries. The shared interests are growing and new driving forces for growth are gaining momentum, which increases the stamina of global economic growth. In the five years to come, China will import eight trillion dollars of goods and make over 750 billion dollars of outbound investment. Among these, countries along the Belt and Road will export to China two trillion dollars of commodities and see 150 billion dollars of investment coming from China, which will bring in tremendous business opportunities to the region.

At the Belt and Road Forum for International Cooperation held last May, President Xi Jinping put forth China’s proposal on jointly building the Belt and Road and an open world economy. In collaboration with 83 countries, we have put forward the Initiative on Promoting Unimpeded Trade Cooperation in an effort to translate the Silk Road spirit into stronger trade and investment cooperation.

With respect to opening up the market, we will further promote trade and investment facilitation and liberalization. Through pressing ahead with FTA and BIT negotiations, we will create a law-based, enabling, transparent and predictable environment for businesses and keep pushing for two-way market opening between China and relevant countries.

When it comes to choosing programs, we have elaborated on the priority areas and industries in the Vision and Actions on Cooperation in Jointly Building the Belt and Road. Enterprises have our support in pushing forward pertinent projects based on the law of markets. We believe that as the development of Belt and Road deepens, the business opportunities it brings along will become evident to more and more market bodies that will have a growing feeling about the Initiative’s objective for win-win results and play a more active role in building the Belt and Road.

With regard to FTA development, BIT negotiations and other areas, MOFCOM will step up efforts to create a stable legal environment for enterprises, facilitate the two-way market opening up and guide and support more businesses to join the development of the Belt and Road so as to bring more mutual benefits to all peoples at an early date. Thank you.

21st Century Business Herald: In a fact-finding investigation by the US International Trade Commission, the US accused China of oversupply of aluminum products and injuring global aluminum industry through the “government-sponsored rise”. What are MOFCOM’s comments? Thank you.

Gao Feng: We have noted the recent 332 report on aluminum competitiveness. According to the report, the rapid development of China’s aluminum industry was principally driven by a robust demand in such areas as domestic infrastructure projects and construction. The aluminum production is mainly to serve the domestic economic growth. On top of that, the supply and demand is balanced. Instead of arguing that it was the government that sponsored the growth of China’s aluminum industry, the report acknowledged that the growth came as a result of untiring efforts and continuous technical revolution in the industry. Besides, a major aluminum exporter as it is, China exported aluminum products mainly to countries in shortage of the material, supporting their economic growth. It is absolutely a market-driven behavior.

As economic globalization goes forward, global aluminum industry has become deeply integrated and interwoven. To address the challenges facing the industry calls for joint efforts by all countries.

In China, the aluminum processing capacity is developing rapidly due to the increasing domestic demand. Today, China’s aluminum industry is following through the new concepts of development and actively pushing for the supply side structural reform. We are willing to work together with all aluminum producers including the US to find solutions to the difficulties and promote the sound and stable development of the global aluminum industry. Thank you.

CCTV-2: China has lately tightened regulation of outbound investment. As an ODI regulator, does MOFCOM see risks or other problems in Wanda Group’s overseas investment?

Gao Feng: Thank you for your question. We encourage Chinese companies to make genuine and compliant outbound investments in keeping with market principles and international norms, not least those in support of the Belt and Road, international capacity cooperation and industrial transformation and upgrade. Meanwhile, we will continue to work with related departments to manage risks linked to outbound investment to ensure its healthy, regulated and orderly growth. As for investment in property, hotels, movie theatres, entertainment and sports clubs, we recommend caution for related companies in decision-making. Thank you.

Global Times English Version: US Commerce Secretary Ross said a few days ago that in the past 15 years, China’s exports to the US have grown by 200% and led to a trade deficit of US$ 309 billion on the US side, which is not the result of free market. What is MOFCOM’s response? Thank you.

Gao Feng: Thank you for your question. As a matter of fact, China-US cargo trade imbalance is a longstanding issue that calls for a full, objective and systematic analysis and perspective. China’s surplus in trade in goods with the US is caused by a mix of reasons, but in the final analysis, it is determined by our economic structures, industrial competitiveness and international division of labor, while the current trade statistics system and US export control against China, among others, also play a part. Exchange rate adjusted, China has a surplus in labor intensive goods, but deficits in capital and technology-intensive goods and agro-produce. This shows that competitive industries generate surpluses. China-US trade, including both exports and imports, is determined by the market and the result of free choice by business and consumers.

Since the Mar-a-Lago summit last April, the two sides have worked actively to address trade imbalance with positive results. As we all know, US beef arrived in China last month for the first in many years. In the first half of this year, China imported crude oil and LNG worth US$ 1.4 billion from the US, which is a five-fold increase year on year. Chinese e-commerce companies are also helping US SMEs sell more into China.

Besides, we ought to see that trade balance should cover both trade in goods and trade in services. The US is the biggest source of China’s services deficit, which has surged in recent years. From 2006 to 2016, China-US trade volume in services grew by 3.3 times, whereas the deficit was up 33.7 times. From January to May this year, China’s services deficit with the US hit US$ 23 billion, up 17% year on year.

China doesn’t seek trade surpluses. We will continue to take positive measures to expand imports from the US. Hopefully, the US will move in the same direction and take substantial steps in relaxing export control on China so as to ease the US cargo trade deficit. Thank you.

The Economic Observer: It’s reported that China Taxi Industrial Alliance wrote to MOFCOM to ask about the progress in the anti-trust probe into Didi’s merger with Uber in August. What are MOFCOM’s comments?

Gao Feng: Thank you for your question. So far, MOFCOM hasn’t received any letter from the Taxi Industrial Alliance.

MOFCOM’s Anti-monopoly Bureau has interviewed Didi Chuxing several times and is investigating the merger case of Didi Chuxing and Uber China in accordance with the PRC Anti-monopoly Law, the State Council Regulations on the Filing Criteria for Concentration of Undertakings, and the Interim Measures for the Investigation and Handling of Non-compliance with Filing for Concentration of Undertakings.

A new business type of the Internet business, ride-hailing services update almost daily. After a close look into the competition pattern and characteristics of the Internet industry, MOFCOM had a full analysis and assessment of the deal’s impact on market competition and industry growth and further learned about the operation model and market landscape of ride-hailing services through calling meetings, field trips and commissioned economic analysis.

We will adhere to the principle of encouraging innovation and science-based regulation to maintain a level playing-field and promote the innovative development of ride-hailing business. Thank you.

In the interest time, we’ll have the last question.

Phoenix Satellite TV: My question is on outbound investment. We’ve noticed that major destination countries like the US, Germany and the UK are all toughening up on foreign investment. How does this affect China’s ODI. What is MOFCOM’s response?

Gao Feng: Thank you for your questions. We have also noted recently voices in a few countries for stepping up security review for foreign investment, with laws passed in certain countries. At the same time, we also see that such moves, deemed as backtracking on free trade and damaging to national economy, are not backed by business communities, among other, in these countries. We believe that it’s a country’s lawful right to run security reviews for investment in sensitive areas. That said, security review should not be used as a tool to advance protectionism.

Committed to globalization and trade and investment liberalization, China opposes trade protectionism and keeps expanding opening up. We hope that when adjusting their investment policies, related countries will keep to the principle of non-discrimination and transparency and fully consider and protect the lawful rights and interests of Chinese companies, among other investors, to create an open and fair competition environment.

We will continue to follow closely the related countries’ tweaks to FDI policies while staying encouraging for willing, capable and ready Chinese companies to go global and engage in mutually beneficial cooperation in line with market principles and international norms to make Chinese business more and more international.

This concludes today’s press conference. Thank you.

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