Dear friends from 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 to release.

I. China’s assimilation of foreign investment in January-August, 2017.

In January-August, 2017, 20,389 foreign invested companies were newly established, with an increase of 10% year on year; the actual use of foreign capital reached 547.94 billion yuan, decreasing by 0.2% year on year. In August, 2,686 foreign invested companies were newly established, with an decrease of 1.8% year on year; the actual use of foreign capital reached 62.52 billion yuan, increasing by 9.1% year on year.

Specifically speaking, there are mainly four features:

Firstly, the assimilation of foreign investment in different industries was stable. In January-August, the actually utilized FDI was 158.29 billion yuan, up 3.9% year on year. Among these, that in chemical raw material and chemical products manufacturing was up 43.7% year on year, that in pharmaceutical industry was up 39.3% year on year, and that in general equipment manufacturing was up 22.8% year on year. The actually utilized FDI in service sector amounted to 381.59 billion yuan, with a year on year increase of 93.3% in the production and supply of electric power, gas and water, a year on year increase of 14.6% in leasing and commercial service increased, a year on year increase of 22.4% in scientific research, technological service industry and geological prospecting industry.

Secondly, the assimilation of foreign investment in hi-tech industries kept a favorable growth momentum. The actually utilized FDI of high-tech manufacturing was 43.69 billion yuan, up 15% year on year. The actually utilized FDI in hi-tech service sector reached 81.44 billion yuan, up 21.4% year on year. Among these, that in information service, R&D and design service, and scientific achievement transformation service grew by 20.1%, 7.3% and 55.1% year on year.

Thirdly, the assimilation of foreign investment in central areas maintained upward momentum. In January-August, the central areas performed noticeably well in foreign investment assimilation with the actually utilized FDI reaching 39.24 billion yuan, up 42.2% year on year.

Fourthly, the main sources of investments continued to grow. In January-August, among the top 15 investment sources, the actual input value from China’s Hong Kong, China’s Taiwan, Japan, Holland, France and Denmark grew by 7.8%, 41.5%, 3.4%, 396.8%, 64.8% and 475.1% respectively year on year.

II. China’s outward investment cooperation in January-August 2017

In January-August 2017, the homeland investors’ non-financial outward direct investment in 4,789 overseas enterprises from 152 countries and areas reached up to US$68.72 billion, decreasing by 41.8% year on year, and the irrational outward investment was further restrained. The turnover of the overseas contracted projects amounted to US$88.5 billion, down 1.6% year on year, and the total value of the newly signed contracts was US$149.57 billion, up 12.7% year on year. The number of the labor service personnel dispatched overseas reached 336,000. At the end of August, the labor service personnel dispatched overseas amounted to 952,000.

China’s outward investment cooperation in January-August mainly showed the following features:

Firstly, the investment and cooperation with countries along the Belt and Road was promoted steadily. In January-August, the new investment in 52 countries along the Belt and Road reached up to US$8.55 billion, accounting for 12.4% of the total volume and increasing by 4.3 percentage points over the same period last year. The total value of the newly signed contractual projects along the Belt and Road line amounted to US$84.51 billion, taking up 56.5% of China’s total value of overseas contractual projects over the same period of time, up 21% year on year; the turnover was US$ 43.24 billion, taking up 48.9% of the total, up 1.2% year on year.

Secondly, the outward investment declined more rapidly and the industry structure continued to be optimized. In January-August, our non-financial outward direct investment fell more rapidly by 2.5 percentage points than in January-July. The outward investment mainly flew to lease and commercial service industry, manufacturing, wholesale and retail industry, information transport, software and information technology services industry, taking up 31.1%, 16.9%, 12.6% and 10.9% respectively. No outward investment project was added in real estate, culture, sports and entertainment areas.

Thirdly, there are many newly signed big contractual foreign projects, obviously pulling up the export. In January-August, the value of 444 overseas contractual projects was over US$50 million, totaling US$ 125.67 billion, accounting for 84% of the total value of the newly signed contracts. The exported goods pulled up by contractual projects amounted to US$9.7 billion, up 18.6% year on year, higher than the growth rate of the goods trade over the same period.

Fourthly, the overseas trade and economic cooperation zones were prominently concentrated, promoting common development between China and the host countries. In January-August, the Chinese enterprises accumulatively invested US$6.72 billion in overseas trade and economic cooperation regions, with a total value of US$18.71 billion. By the end of August, the Chinese enterprises had been building 99 overseas trade and economic cooperation zones in 44 countries and regions, accumulatively investing US$32.38 billion, attracting 3,882 enterprises to enter into the zone and creating 247,000 employment positions in the local regions.

III. About the establishment of key retail enterprises’ liaison system

Recently, MOFCOM issued the notification of deciding to establish the key retail enterprises liaison system and select 100 retail enterprises with large scale, new business model and strong demonstration as the key liaison retailers of MOFCOM. The list will be put on public notice recently. This selection is based on enterprises’ free application, and the list will be settled and released after the comprehensive appraisal of the experts organized by MOFCOM on their innovation ability, development prospect and demonstration effect. MOFCOM will manage the list dynamically and annually and add up new names according to the industry development.

The key retail enterprises liaison system, on the principle of being “guided by government based on the free will of enterprises with all coordination and top-to-bottom linkage”, aims to improve the government’s ability to serve enterprises, provide a smoother communication channel between government and enterprises, build an exchange and cooperation platform for enterprises and forge a group of “bellwether” to lead the development of retail industry, making it the “test field” of reform and innovation and the “barometer” to reflect the market trend.

Next, we will promote this system to function on three levels simultaneously. MOFCOM will be responsible for connecting the headquarters of the key retail enterprises nationwide and further improve the policy environment together with the State Council to lead and promote the innovation transformation of enterprises. The key retail enterprises are encouraged to participate in major events such as important circulation construction projects and China International Import Expo, creating conditions for their participation in the major investments and acquisitions along the Belt and Road countries. We will focus on the major reforms and innovations in enterprises and find, conclude, extract and popularize the successful experience. The local commercial departments will be in charge of connecting the local branches of key retail and other enterprises to establish key retail enterprises liaison systems in line with local reality and coordinately solve the difficulties and problems in the enterprises’ development, and the enterprises should be supported to engage in the local circulation construction projects. The key liaison retail enterprises can use modern circulation pattern and modern information technology to push forward innovation transformation by taking advantage of their merchandise purchase, logistics and data resources and drive the development of small-and-medium sized enterprises to fulfill their social responsibility and play well their leading role.

That’s all information I’d like to share with you. Now I’d like to answer your questions.

Phoenix TV: The first question: we have noticed that the latest RCEP negotiations proposed that all parties should strive to achieve results before the end of 2017. We have noticed that China used to hope for the conclusion of the negotiations within this year. We heard that the impasse was because of the disagreement among members, represented by China and Japan. China hopes to complete the negotiations as early as possible, while Japan hopes for high quality trade rules. They are both asking for the support of the members. What is the comment of MOFCOM on this? The second question is about DPRK. We have noticed the new UN resolution on DPRK and would like to ask what are China’s measures and timetable for implementing this resolution. We have noticed that some western media stated that the UN has imposed such harsh sanctions, but due to its trade with China, DPRK is not short of cash. I want to ask for the changes in China-DPRK trade statistics. The third question: we have noticed that in the early morning today, President Trump stopped one transaction. A private equity institution with a Chinese background planned to purchase a US chip producer. In the past 27 years, it has been the fourth time for the US President to stop foreign acquisitions of US companies based on national security risks. Some analyzed that this shows the US government will oppose transaction of technologies which could be used in military. What is the response of MOFCOM to that？

Gao Feng: Your first question is on RCEP negotiations. As we all know, RCEP negotiations were first initiated by the ASEAN. We believe that it is an important move towards ASEAN economic integration. As always, China respects and firmly supports the centrality of ASEAN in RCEP negotiations. We are working with the ASEAN to coordinate all parties of the negotiations and strive for more progress.

The RCEP members have varied development levels and conditions. China believes that letting ASEAN take the lead and make the majority of members comfortable, instead of blindly sticking to the so-called “high standard”, is a pragmatic approach promoting the negotiations.

This year marks the 50th anniversary of the ASEAN. China would like to work with the ASEAN and other parties to promote substantial progress of the negotiation, so as to reach a modern, comprehensive, high quality and mutually beneficial RCEP agreement at an early date.

On your second question, China has always comprehensively and strictly implemented the resolutions related to DPRK adopted by the UN Security Council. As for the trade and economic sanction measures in the new resolution adopted by the Security Council on September 12, MOFCOM will work with the relevant authorities to publicize the specific implementation measures at an appropriate time according to relevant Chinese laws and regulations.

As for the China-DPRK trade statistics, in this year, China-DPRK trade growth has generally decreased by month. In the first seven months, China-DPRK trade grew by 10.2% from the same period last year. The increase is 21 percentage points lower than the growth in the first quarter. In particular, China’s imports from DPRK started negative growth from March. The imports of the first seven months decreased by 16.3% compared to the same period last year. It is expected that China-DPRK trade growth will further decrease to below 10% in the first eight months of this year.

Regarding your third question, we have noticed relevant news. China is concerned about it. We believe that security review on investment in sensitive areas is the legal right of a country, but it should not become a tool for protectionism.

In 2016, China’s non-financial direct investment in the US reached USD 19.5 billion, up by 132.4% year on year. According to US Rhodium Group, in 2016, China’s FDI in the US increased to USD 45.6 billion, three times that of 2015, reaching another new historical height. Since 2000, the direct investment of Chinese enterprises in the US has exceeded USD 100 billion cumulatively, creating more than 140,000 jobs.

The acquisition of foreign companies by Chinese enterprises is a market behavior where companies make their own decisions. We hope the relevant countries can take an objective and fair view of foreign acquisition by Chinese companies, treat such normal commercial behavior fairly and create a reasonable and transparent business environment, so as to avoid undermining the confidence of investors. Thank you.

MASTV: We have noticed that the recent exchange rate of RMB against the U.S. dollar continues to hit record highs. In August, China’s imports are also better than expected. What is the influence of rising exchange rate on China’s foreign trade?

Gao Feng: Influenced by various factors, such as China’s stable and improved economic fundamentals, the central parity rate of the RMB against the U.S. dollar has increased by about 6.3% this year. In the same period, the real effective exchange rate of the RMB against the basket of currencies is basically stable.

Import and export are influenced by multiple factors, such as domestic and international market demand, commodity price and changes of exchange rate. We always stress that changes in exchange rate is in fact a “double-edged sword” to foreign trade growth. Fluctuations in exchange rate are not decisive factors to import and export. For example, in 2016, the exchange rate of RMB against the U.S. dollar decreased by 6.4%, but China’s import and export decreased in the same period. In the first eight months of this year, the central parity rate of the RMB against the U.S. dollar increased by 5.1%, while export and import grew by 7.6% and 16.9% in the same period. Import and export in general grew by 11.6% then.

Against the backdrop of slow global economic recovery and growingly complex monetary policy environment, keeping the exchange rate of RMB generally stable based on a reasonable and balanced level will boost foreign trade. MOFCOM is working with relevant departments to expand RMB settlement in cross-border trade and investment and enhance the abilities of companies to address exchange rate risks.

At the same time, we will remain committed to the underlying principle of making progress while keeping performance stable. We will firmly maintain steady growth, adjust the structure, shift the drivers and improve quality of foreign trade, thus fundamentally enhance its resilience to external risks. Thank you. The floor is open for questions.

National Business Daily: Recently, Chinese customs have released the relevant data on China’s import and export. Mr. Spokesman, could you brief us on the basic features of China’s foreign trade in the first eight months of this year? Thank you.

Gao Feng: In the first eight months of this year, China’s foreign trade achieved stable and fast growth. At the present, China’s foreign trade has the following three features:

First, the structure of foreign trade is further improved. In terms of commodity structure, the export volume of mechanical and electrical products reached RMB 5.63 trillion, up by 13.4%. It accounted for 57.1% of the total, 0.2 percentage point higher than the same period last year. To be more specific, the export of automobiles, computer and its components, vessels and mobile phones grew by 28.4%, 20.1%, 17.8% and 11.9%. The export of seven traditional labor intensive sectors, such as textile and clothing, maintained rapid growth of 10%. In terms of trade structure, the imports and exports of general trade reached RMB 10.11 trillion, up by 17.9% year on year. It accounted for 56.7% of the total, 0.4 percentage point higher than the same period last year.

Second, the shift of drivers has accelerated. The business environment cultivating new business format of foreign trade is further improved. The export growth in cross-border e-commerce and market purchasing is clearly higher than the general growth. The cultivation of new driver is effective. For the key players of foreign trade, the export of state-owned enterprises was RMB 1.03 trillion, up by 11.4% and accounting for 10.5% of China’s total export. The export of private enterprises was RMB 4.62 trillion, up by 15.4%. It accounted for 46.9% of the total, or 0.9 percentage point higher than the same period last year. The export of foreign enterprises was RMB 4.2 trillion, up by 10.9% and accounting for 42.6% of China’s total export. A large number of enterprises worked on the supply side. They focus on innovation-driven development and speed up in shifting drivers and restructuring to cultivate new competitiveness of foreign trade featuring technologies, brands, quality, services and standard. The companies have enhanced their innovation capabilities and international competitiveness, with rising product added value and brand influence.

Third, the momentum of stabilizing and improvement is further consolidated. Taking a global view, the international market demand is generally rebounding and key international organizations have increased their expectations of world economic growth. According to the latest forecast publicized by the IMF on July 23, the 2017 world economic growth will reach 3.5%, 0.3 percentage point higher than that of 2016 and a new height in three years. As for China’s key export markets, China’s export to traditional markets, such as the US, the EU and Japan, increased by 16.7%, 14% and 10.7% respectively. China’s export to “Belt and Road” countries, such as Russia, India, Malaysia and Indonesia achieved fast growth, with a growth rate of 24.1%, 22.5%, 17.3% and 12.2% respectively. Thank you. Next question, please.

Economic Daily: The 15th China-Australia Ministerial Joint Economic Commission will be hosted. Could you brief us on the relevant arrangements and expected results? Thank you.

Gao Feng: Invited by MOFCOM, Australian Minister for Trade, Tourism and Investment Steven Ciobo will visit China on September 15-16. During that time, Minister Zhong Shan and Minister Ciobo will co-chair the 15th China-Australia Ministerial Joint Economic Commission. The two sides will exchange views on the following issues: further implementing the outcomes of the Belt and Road Forum for International Cooperation, planning and developing China-Australia bilateral trade and economic relations, reviewing trade in services, investment and other relevant chapters of China-Australia FTA, and regional and multilateral trading mechanism.

China is the largest trading partner of Australia while Australia is an important destination of Chinese investments. Trade between the two countries between January and August this year amounted to USD 87.63 billion, up 31.5% year on year. In the first seven months of this year, Chinese companies made USD 1.39 billion worth of direct investment to Australia and Australian investments to China reached USD 111 million.

Economic Observer: We noticed that the Ministry of Commerce issued a public notice to solicit comments and opinions on the revision of the Provisions on Review of Concentrations of Undertakings. What is the purpose and background of this revision? Thank you.

GAO Feng: In order to regulate concentration of undertakings in accordance with law, the Ministry of Commerce formulated the Provisions on Review of Concentrations of Undertakings pursuant to the Anti-Monopoly Law in November 2009, and the implementation started in January 2010. The Provisions has been playing a critical role in regulating concentration of undertakings. To follow the top leadership’s instruction on rule of law, and to improve enforcement procedures and quality, and to create a fair and transparent business environment, it is imperative to set more open, transparent and predictable standards and procedures of review and further improve the review system on concentration of undertakings.

Given these objectives, we will sum up good practices of review and revise the Provisions. We welcome comments and suggestions. Thank you.

China News Agency: Temporary deployment of THAAD has been completed. Will it have any effect on China-Korea trade and economic relations?

GAO Feng: The Chinese economy and the Korean economy are strongly complementary to each other and have huge potential for cooperation. China values its economic and trade relations with Korea and has always been proactive and open-minded to promote the development of these relations. In the first eight months of this year, two-way trade value amounted to USD 176.11 billion, up 10.4% year on year. In breakdown, China’s export to Korea grew by 11.9% to USD 66.26 billion, and its import from Korea increased by 9.5% to USD 109.85 billion.

Economic and trade relations between China and Korea have been growing steadily. However, bilateral cooperation and exchanges must be based on the will of people. Deployment of THAAD in Korea seriously injured China’s strategic security interest, hurt the friendly sentiments of Chinese people, and therefore will inevitably have adverse effect on the healthy development of bilateral economic cooperation. We hope the Korean government may respect the key interests and legitimate concerns of China and properly handle relevant issues so as to create a sound atmosphere and environment for the healthy and steady development of bilateral economic and trade relations. Thank you. Next question, please.

China Daily: Economic and Trade Ministers’ meetings for East Asian Cooperation were held between 8th and 10th September in Manila, the Philippines. Can you share with us the outcomes of the meetings? Thanks.

GAO Feng: Serial meetings attended by Commerce Minister ZHONG Shan and the Chinese delegation include four meetings. At the 16th AEM-MOFCOM Consultation or the ASEAN 10+1 Economic and Trade Ministers’ Meeting, China make six-point proposals on strengthening China’s economic cooperation with ASEAN countries, including cooperation in the Belt and Road Initiative, China-ASEAN connectivity cooperation, closer cooperation on production capacity and mutual investment, faster implementation of development cooperation programs, invitation to ASEAN for attending the China International Import Exposition, and collaboration on bring the Protocol on China-ASEAN FTA Upgrading into full force. These proposals were highly commended and positively echoed by the ASEAN side which pledged to promote the practical cooperation between ASSEAN and China to a higher level. The Meeting endorsed in principle the Joint Statement on Deepening Infrastructure Connectivity Cooperation between China and ASEAN, and the Joint Statement will be submitted to the China-ASEAN Leaders’ Meeting in November.

At the 20th AEM-CJK Consultations, or the ASEAN 10+3 (China, Japan and Korea) Economic and Trade Ministers’ Meeting, China proposed three suggestions on strengthening the 10+3 cooperation. First is to innovate on industrial cooperation model and facilitate the growth of new business models and small and medium-sized companies. Second is to accelerate the development of the FTA and promote regional economic integration and growth. Third is to oppose in concert trade protectionism and support trade and investment facilitation. China also proposed the initiative of “Joint Research on ASEAN 10+3 Supply Chain Connectivity” which was warmly echoed by all parties. The Meeting requested senior officials to keep close touch and discuss the early launch of the joint research.

At the 5th Ministerial Meeting of RCEP, or the ASEAN 10+6 Economic and Trade Ministers’ Meeting, all parties issued a joint statement which emphasizes to translate political commitment to real actions, expand mandate when necessary, and spare no efforts to promote the RCEP negotiation process to score significant progress and drive the whole process a step closer to the final success.

At the 5th EAS Economic and Trade Ministers’ Meeting, or the ASEAN 10+8 Economic and Trade Ministers’ Meeting, all parties exchanged views on the preparatory work for the East Asia Summit in economic and trade areas as well as international and regional economic development. Minister ZHONG Shan detailed the economic and social development in China since the beginning of the year, elaborated on China’s position on international and regional economic cooperation, and invited all countries to participate in the China International Import Export to be held in China in 2018.

In general, all parties to the meeting made sufficient exchanges of views on a broad range of economic and trade issues and agreed upon on a succession of cooperation outcomes, and therefore made fruitful preparation in economic and trade fields for the summit meeting scheduled in November. Thank you. Due to time limit, the last question now.

CNR: We noticed that in last August China’s trade surplus with the US reached a new high for the past two years, which means China’s export to the US far exceeds its import from the US. What’s your comment? Any plan to increase import from the US?

GAO Feng: I made some explanation about the issue of China-US trade imbalance in previous press briefings. China never deliberately seeks trade surplus. The present trade situation is purely caused by market forces.

Between January and August, China’s surplus with the US in trade in goods was USD 168.06 billion, up by 6.5% year on year. In August alone, trade surplus with the US was USD 26.23 billion, 4.2% bigger year on year.

However we shall be aware that in the first eight months China’s import from the US grew by 20.1% to USD 100.4 billion. This is the fastest growth rate in the past five years, and is higher than the growth rate of bilateral trade which is 13.5% and that of China’s export to the US which is 11.2%.

On trade in services, the trade has always been in favor of the US. Chinese statistics show that services trade deficit with the US in the first half of this year amounted to USD 30.32 billion, 36.5% bigger than the same period of last year.

It takes the efforts of both parties to address the issue of China-US trade imbalance. Since the successful summit at Mar-a-Largo, the two sides have been working together to push ahead with the 100 Day Plan, successfully held the first Comprehensive Economic Dialogue, and have achieved positive and real results. We want to work with the US side on the One Yea Plan for bilateral economic cooperation, and are willing to increase import from the US. We also hope that the US side can make substantive step forward on issues like export control so as to contribute to the balanced and stable growth of China-US trade. Thank you.

This is the end of the press conference. Thank you all.