MINISTRY OF COMMERCE PEOPLE'S REPUBLIC OF CHINA
MINISTRY OF COMMERCEDear 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. The achievements of domestic trade circulation and foreign trade development since the 18th National Congress of the Communist Party of China
Under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core since the 18th CPC National Congress, the MOFCOM has paid close attention to policy implementation according to the deployment of the Central Party Committee. In domestic trade circulation, the MOFCOM has speeded up reform and innovation, promoted circulation modernization, established a unified market and built legalized business environment, providing powerful support for stabilizing growth, adjusting structure and benefiting the people. In foreign trade, the MOFCOM has promoted the optimizing of international market layout, domestic regional layout, goods structure, business entity and trade type. It has also speeded up the construction of the transformation and the upgrade base of foreign trade, trade platform and international marketing network, striving to create a favorable business environment for foreign trade enterprises to alleviate their burdens and give full support for their innovation.
In the past five year, domestic trade circulation mainly showed the following highlights:
Firstly, the structural reform of circulation developed both in scope and in depth. The Opinions of the State Council on Promoting the Modernization of Domestic Trade Circulation and Building the Law-based Business Environment forms the policy framework to promote the reform and innovation of domestic trade circulation. The MOFCOM has comprehensively tried the structural reform and development of domestic trade circulation in Shanghai and eight other cities, and the reform of comprehensive administrative law enforcement on business has been tried in Beijing and nine other cities, establishing 9 municipal and 70 county-level comprehensive law enforcement business teams . The structural reform on car circulation has been promoted, breaking the single sale pattern authorized by car brands, which has lasted for ten years. The reserve system for meat and sugar has been further improved through establishing an emergency placement network involving more than 63 emergency merchandise, 1,200 key enterprises, 640 distributing centers of emergency merchandise and 14,000 placement spots, which obviously enhances the emergency protection and supply capacity.
Secondly, consumption and supply enjoyed continuous improvement. MOFCOM and 12 other departments launched the Special Project on Accelerating Domestic Trade Innovation to promote Supply-side Structural Reform, and directed the enterprises to increase the supply of mid-and high-end merchandise and premium services. We have implemented the protection project for China time-honored brand, supported the development of entity business, rectified and regulated market orders, improved the coordination mechanism of fighting infringement and counterfeit and promoted the construction of traceability system and business credit. In 2016, the total sales of consumer goods increased from 21.4 trillion yuan in 2012 to 33.2 trillion yuan, and the contribution rate of consumption to economic growth rose from 51.8% to 64.6%, becoming the primary driving force for national economic growth for three consecutive years.
Thirdly, the e-commerce developed rapidly. We deeply implemented the action plan of “Internet + Circulation”, promoting the joint development of online and offline business and the entry of e-commerce into communities and rural areas and supporting the application of cloud computing, big data, internet and internet of things in circulation areas. The e-commerce increased from 8.1 trillion yuan in 2012 to 26.1 trillion yuan in 2016 and the online retail sales skyrocketed from 1.3 trillion yuan to 5.2 trillion yuan. China has become the world's largest online retail power. Since the comprehensive demonstration of e-commerce entering into rural areas, 756 demonstrative counties have been established in 28 provinces. Among these, national-level poverty-stricken counties amounted to 498, accounting for 60% of the total number. The online retail sales in rural areas increased from 506.4 billion yuan in 2014 to 894.5 billion yuan in 2016, up 76.8% year on year. The e-commerce employees in rural areas doubled from less than 10 million to 20 million. In the first of 2017, the online retail sales in rural areas reached 537.6 billion yuan, up 38% year on year.
Fourthly, the construction of a unified market was improved. We have endeavored to promote the construction of circulation infrastructure, solving “the last one-kilometer” problem. We have supported the construction of noncommercial wholesale markets and cold chain logistics facilities of agricultural products, that of the key circulation network and that of the circulation system of national agricultural products. We have cleared and eliminated several rules and practices that obstructed the construction of the unified market. The past five years have seen a more sound circulation system both in urban and rural areas, and a domestic trade circulation system covering both urban and rural areas and connecting online and offline businesses is basically formed. The proportion of the total cost of social logistics costs in GDP decreased from 18% in 2012 to 14.9% in 2016 and the comprehensive social logistics costs dropped by 10%.
In the past five years, foreign trade similarly presented four the following major highlights:
Firstly, China’s role as a major goods trade power was constantly consolidated. China has been the largest exporter in goods trade globally and the second largest importer for eight consecutive years. Our export share in the international market rose from 10.4% in 2012 to 13.2% in 2016, and the development of foreign trade became the important power to support national economy and social development. In 2016, our import tariffs and linkage taxes added up to 1.54 trillion yuan, accounting for 23.4% of the national tax revenue, and the employment directly or indirectly driven by foreign trade reached 180 million, taking up 23% of the total employment nationwide.
Secondly, the import and export structure kept being optimized. In 2016, the proportion of the developing economies and emerging markets and the Belt and Road countries in China’s foreign trade exports accounted for 45.6% and 27.7% respectively, 3.1 and 3.8 percentage points higher than those in 2011 respectively. The domestic regional distribution became more balanced with the central and western regions taking up 15.2% of the national foreign trade exports, 3.3 percentage points higher than that in 2011. The methods of trade were further optimized and the general trade enjoyed rapid development with its proportion in exports up to 53.8%, 5.5 percentage points higher than that in 2011.
Thirdly, the drivers of foreign trade transferred rapidly. The private enterprises became the major power to develop foreign trade, and their proportion in national export surpassed other enterprises for the first time, up from the 33.5% in 2011 to 46% in 2016, 12.5 percentage higher. The innovation ability, brand building and marketing ability of foreign trade enterprises were continuously strengthened, and the export of products with self-owned Brand, proprietary IPR, independent marketing channel, high-tech, high added value and high benefits grew faster than traditional products. Emerging business activities such as cross border e-commerce and market purchasing trade grew rapidly, and has become a new growth point.
Fourthly, foreign trade contributed greatly to the recovery of global economy and trade. We attached equal importance to export and import through accelerating the implementation of the positive import policies, through making [being] “Made in China” benefit global consumers and through letting “Chinese Market” promote the world economy. At present, China has become one of the largest markets globally with its import taking up one tenth of the global share. Ever since the outbreak of the international financial crisis, China’s imports increased by 581.5 billion dollars, accounting for 20% of the global increments, becoming the major driver of the recovery of global trade.
Next, we will continue to implement the decisions and arrangements of the CPC and the State Council and follow the general principle of making progress while keeping performance stable. In domestic trade circulation, we will endeavor to increase effective supply and supply quality and improve the weakness and reduce the costs to promote the innovative development of circulation and further enhance consumption as the driver of economic growth. In foreign trade, we will continue to consolidate foreign trade’s traditional advantages and speed up the cultivation of new competitive advantages. We will actively enlarge import and promote the balanced development of foreign trade. We will endeavor to hold well the China International Import Expo in 2018, further improve trade structure and deal well with different trade frictions to realize China’s historical transformation from a large trading nation to a powerful one.
II. About the 2017 National Conference on Connectivity between Agriculture and Commerce
Recently, MOFCOM held the 2017 National Conference on Connectivity between Agriculture and Commerce in Weifang, Shandong. The conference concluded the results and experience after the launch of the work of 2016 Connectivity between Agriculture and Commerce, announced the establishment of “the industry alliance of national agriculture and commerce connectivity” and initiated “the integrated commercial internet information service platform”.
The connectivity between agriculture and commerce is MOFCOM’s important task to carry out the new ideas of development and promote the agricultural supply-side structural reform and the targeted poverty alleviation project. The connectivity between agriculture and commerce, following five major tasks of connecting “products”, “facilities”, “standards”, “data” and “markets” and supported by network, digitization and intelligence, will forge integrated industry chains from manufacturing to sales through the effective linkage between agriculture and commerce. It will comprehensively enhance our informatization standardization and intensification.
Over the past year, many regions made bold explorations and practices, forming “E-commerce + Leading enterprises”, “E-commerce + Farmers' cooperative”, “E-commerce + Farmers”, “Business-Tourism-Culture” and many other development patterns, which paid positive role in upgrading industries, promoted the sales of agricultural products and increased the farmers’ income. In the first half of 2017, the e-commerce sales of agricultural products amounted to 88.4 billion yuan, up 48.2%, 4.6 times faster than the total retail sales of consumer goods over the same period.
Next, we will continue to stick to the principle of market orientation and seeking improvement in stability. We will copy and promote the typical experience and patterns to improve the quality and level of the connectivity between agriculture and commerce. At the same time, we will further promote the branding of agricultural products, the standardization of the whole chain and the informatization of operational management to benefit the great majority of the people.
That’s all information I’d like to share with you. Now I’d like to answer your questions.
21st Century Economic Daily: German Chancellor Merkel has been reelected and next month marks the 45th anniversary of the establishment of China-German diplomatic ties. Could you introduce the latest developments in trade between the two countries? What role does Germany play in promoting China-EU trade?
Gao Feng: This year marks the 45th anniversary of China-German diplomatic relations. During President Xi’s first visit to Germany in 2014, China and Germany elevated the bilateral relations to comprehensive strategic partnership, ushering in an era of high-level development. Cooperation in all aspects has deepened since then. The practical cooperation between China and Germany has not only guided the direction of China-EU relations but also set an example for mutually beneficial cooperation between major economies in the world.
According to Chinese statistics, Germany is China’s largest trading partner in Europe and sixth largest in the world. The bilateral trade registered 151.3 billion dollars in 2016, representing 27.7% of total trade between China and the EU. From January to August, the Sino-German trade hit 107.78 billion dollars, growing by 8.7% year-on-year. Chinese exports to Germany reached 45.83 billion dollars with a year-on-year growth of 7.9% and its imports from Germany 61.95 billion dollars, up by 9.3%. Progress has been made in, among others, connecting strategies of Made in China 2025 and German Industry 4.0, building the Belt and Road, triangular cooperation and local industrial parks. On top of that, China and Germany are close partners in international occasions such as the G20 framework, both opposing trade protectionism and promoting economic globalization.
We stand ready to step up communication with Germany continuously so as to create favorable environment for trade and investment cooperation, give more play to the role of commercial cooperation in the bilateral relations as a ballast and propeller and jointly push China-EU partnership forward.
Shanghai Securities Daily: Customs statistics show that China imported 1.63 million tonnes of smoke-free coal from the DPRK in August. However, based on the No.12 notice by MOFCOM and the General Administration of Customs, such imports have been suspended since February. What is the reason for the import in August? Going forward, how does China implement the UN resolution of sanction and what is the trend of China-DPRK trade?
Gao Feng: China has always fully implemented US resolutions concerning the DPRK. To carry out the UN resolution 2371, MOFCOM and GAC issued the notice forbidding imports of some minerals and marine produce from North Korea. In the meantime, we left a window open for customs clearing of goods that had arrived in ports before the date of the notice. Such doing is in line with the resolution since there is a phasing period set by the Security Council for embargo of mineral and marine products and conforms to Chinese laws and regulations. China’s trade with North Korea is conducted based on its domestic laws and due international obligations.
CRI: MOFCOM and relevant departments have recently issued an action plan for protecting foreign investors’ intellectual property rights, rolling out a four-month clampdown on crimes of infringing IPR of foreign invested enterprises. Does it have something to do with the 301 investigation by the US, which is also about IPR issues?
Gao Feng: The joint action is a special campaign that builds on the achievements by the government in cracking down on infringement and counterfeiting and focuses on problems that foreign investors have bitterly complained. It is also a major step towards implementing the State Council No. 39 document.
We always believe that IPR protection has a critical role to play in innovation and development in China. This action is a continuation of China’s increasing efforts to protect IPR and create a level playing field, not a quick fix to other countries’ investigation.
Chinese News Agency: When will MOFCOM and relevant departments publish detailed rules for cross-border ecommerce retail import?
Gao Feng: On September 20, the State Council executive meeting decided to extend the transition period for cross-border e-commerce retailing import regulation policy until the end of 2018. It means the policy remains effective until December 31, 2018. We will work with other departments to watch closely the effects of relevant policies and continue to promote sustained and sound growth of the industry.
Economic Information Daily: Earlier, the Ministry of Commerce and three other departments issued a directive opinion on further regulating outbound investment, wherein they proposed to establish a blacklist system for overseas investments. Is it true that those enterprises that had violated outward foreign investment rules would be put on the blacklist, as was recently rumored? What measures will be adopted to curb irrational investment?
Gao Feng: Early this August, the General Office of the State Council forwarded the directive opinion of the four departments on further guidance and regulation of foreign investment, in which it was proposed to "establish a blacklist system for overseas investment and bring joint disciplinary measures against investment violations." At present, we are working with concerned departments to actively break down relevant implementation tasks with a view to introducing relevant management measures as soon as possible.
As regards irrational outward investment, the Chinese government's attitude is firm. We will further strengthen the verification of overseas investments, improve the management system of overseas investment filing and reporting, strengthen interim and ex-post supervision, and help enterprises to not only “go global” in a surefooted and rules-compliant manner, but also prevent and resolve risks in outbound investment.
Economic Daily: US Commerce Secretary Wilbur Ross said in Hong Kong on Wednesday that China uses unfair subsidies and tax incentives to support its robotics industry and electric vehicle industry. He also said that out of the 400 strong Chinese robotics companies, 360 of them owe their existence in the industry to subsidies and tax benefits. Is this accurate? Moreover, he said that some of China's unfair support to its high-tech industry will lead to overcapacity and unfair competition between Chinese and foreign companies. What is the Ministry of Commerce’s response to this?
Gao Feng: We have noticed the report. In fact, during the Secretary’s visit to China, Commerce Minister Zhong Shan held positive and constructive talks with him. The two sides had an in-depth exchange of views on strengthening bilateral trade and economic cooperation, and properly managing and controlling differences, and reached a lot of consensus.
I would like to emphasize that the purpose of China's relevant industrial policies is to guide and encourage the industry’s development. These policies treat domestic and foreign enterprises established in China equally. In January this year, the State Council issued 20 measures to actively use foreign capital, which clearly states that foreign-investment enterprises and domestic enterprises are equally eligible for the policy measures under the "Made in China 2025" strategy. Relevant policies are consistent with the market-orientation principles and will not cause market distortions.
We are willing to make joint efforts with the United States to actively promote bilateral commercial cooperation and strive for positive outcomes on the trade and economic front for President Trump's state visit to China this year at the invitation of President Xi Jinping, thus injecting a strong impetus into the sound, stable and sustainable development of Sino-US relations.
Phoenix Satellite TV: Wilbur Ross also said in Hong Kong on Wednesday that the US will take actions to protect US businesses and citizens should they encounter obstacles in their cooperation in China on intellectual property grounds. What is the Chinese side response to this?
Gao Feng: I have already explained the position of the Chinese side on intellectual property rights. China's efforts and achievements are obvious to all. China has evolved from being asked to protect IP to wanting to protect IP for its own sake. Protecting IP is necessitated by China's own development. At present, while the world economy is still mired in a slow recovery and faced with multiple instable and uncertain factors, the international community needs to further strengthen cooperation and work together. Unilateralism and protectionism do no good to the long-term and stable growth of all economies. China is willing to work together with all countries in the world, including the United States, to strengthen cooperation and achieve mutual benefit and common development, and contribute to the development of the global economy.
Today's press conference is concluded!
The National Day and Mid-Autumn Festival are coming. On behalf of the Press Office of the Ministry of Commerce, I wish you a happy Mid-Autumn Festival and a happy National Day! I thank you all!