Dear friends from the press,

Good morning, welcome to the regular press conference of the Ministry of Commerce (MOFCOM). First of all, I have three pieces of information to release.

I. About the trade and economic cooperation with the countries along the Belt and Road routes in 2017

In 2017, China’s Belt and Road construction entered into a new phase of all-round and pragmatic cooperation. According to the plans of the CPC and the State Council, we conscientiously implemented the achievements of the Belt and Road Forum for International Cooperation and stepped up efforts to promote the Belt and Road economic and trade cooperation. Remarkable achievements have been made.

1. Trade and investment cooperation was further deepened. In 2017, China’s trade volume with the Belt and Road countries reached up to 7.4 trillion yuan, up 17.8% year on year, 3.6 percentage points higher than the national growth rate of foreign trade. Among these, the export reached 4.3 trillion yuan, with an increase of 12.1%, and the import reached 3.1 trillion yuan, with an increase of 26.8%. The Chinese enterprises’ FDI in the countries along the Belt and Road routes amounted to US$14.4 billion and the total value of the newly signed contractual projects there amounted to US$144.3 billion, up 14.5% year on year.

2. Major projects were firmly promoted. Mombasa Port-Nairobi railway, the beginning of the East African railway network, was completed and open to traffic; the first tunnel of China-Laos railway was completed, China-Thailand railway (Phase I) started construction, and the projects such as Hungary-Serbia railway and Karachi motorway went on smoothly. China-Belarus Industrial Park and Suez Economic & Trade Cooperation Zone become the model of the Belt and Road economic and trade cooperation.

3. Breakthroughs were made in the construction of free trade zones. China signed FTAs with Georgia and Maldives, officially launched the FTA negotiations with Moldova and Mauritius and promoted the RCEP negotiations towards positive progress.

4. The effects of foreign aid were boosted. We launched the "Co-construction of the Aid Bridge for Smooth Belt and Road" action, implemented major aid measures and positively provided helps for the developing countries along the Belt and Road routes within our capacity. China steadily promoted the construction of the foreign aid projects aiming to improve people's livelihood, established the Institute of South-South Cooperation and Development and held special training courses to help strengthen the independent development ability of the recipient countries.

The 19th National Congress has drawn new plans to promote the Belt and Road construction. We will continue to follow the principle of achieving shared growth through discussion and collaboration, positively boost the Belt and Road international cooperation, endeavor to realize policy, infrastructure, trade, financial, and people-to-people connectivity, build a new platform for international cooperation to create new power for shared development and jointly promote the construction of an open world economy in order to achieve mutually beneficial and win-win situation and common development with the related Belt and Road countries.

II. About the development of China’s e-commerce in rural areas in 2017

According to the preliminary statistics, in 2017, the online retail sales in rural areas reached 1244.88 billion yuan, up 39.1% year on year. By the end of 2017, the online stores in rural areas amounted to 9,856,000, with an increase of 1,693,000 than that of 2016, up 20.7% year on year, and the employment number driven by this reached 28 million.

The online retail sales of physical goods in rural areas amounted to 782.66 billion yuan, up 35.1% year on year, taking up 62.9% of the total amount in rural areas. Among these, the sales of clothing, shoes and bags, home decoration and health care food ranked the top three and amounted to 160.03, 112.95, and 103.1 billion yuan respectively, up 30.5%, 6.4% and 61% year on year respectively.

The online retail sales of service products in rural areas amounted to 462.22 billion yuan, up 46.6% year on year, taking up 37.1% of the total amount in rural areas. Among these, the sales of online traveling, online catering and life services ranked the top three and amounted to 183.19, 162.58 and 18.07 billion yuan respectively, up 66.8%, 58.6% and 45.3% year on year respectively. The performance of online traveling and online catering was particularly prominent, contributing 21% and 17.2% respectively to the growth of rural online retail sales, ranking the top two in all 19 categories of rural online retailing.

From the perspective of regional distribution, the online retail sales in eastern, central, western and northeast rural areas amounted to 790.45, 256.21, 170.05 and 28.18 billion yuan respectively, up 33.4%, 46.2%, 55.4% and 60.9% respectively year on year. Among these, the online retail sales in the eastern rural areas took up 63.5% with evident advantages. Those in central western and northeastern rural areas reached 454.44 billion yuan, up 50.4% year on year, 17 percentage points higher than the growth in the eastern rural areas.

From the perspective of main products, health care food contributed the most compared with other physical goods to the online retail growth in the central, western and northeastern rural areas, with a contribution rate of 11.5%, 30.3% and 29% respectively. Online traveling made the most contribution in all service products to the growth of online retail sales in the central and western rural areas, reaching 30.8% and 24.3% respectively. In service products, online catering contributed the most to the growth of online retail sales in the northeast and eastern rural areas, reaching 14.2% and 17.9% respectively. Clothing, shoes and bags made the most contribution in all physical goods to the growth of online retail sales in the eastern rural areas, reaching 16.8%.

In 2017, the online retail sales in 832 national-level poverty-stricken counties amounted to 120.79 billion yuan, up 52.1% year on year, 13 percentage points higher than the growth in rural areas.

II. The situation about the Development Index of China’s Shopping Centers in the fourth quarter of 2017.

Today, MOFCOM released The Report on the Development Index of China’s Shopping Centers in the fourth quarter of 2017.

The report showed that in the fourth quarter of 2017, the development index of China’s shopping centers was 67.2, 0.3 points higher than that in the third quarter, 17.2 points higher than the PMI (Purchasing Managers’ Index), which means that the overall shopping center market continues to keep an positive momentum. Among these, the present situation index was 64.7, 1.2 points higher than that of the third quarter, and the leasing activity index and operating performance index showed an obvious uptrend. The expectation index was 70.9, 6.2 points higher than the present situation index. The coming 6 months of the market were expected to be positive regarding sales and leasing.

Besides the cost control index, the shopping centers’ macro-markets index, leasing activity index and operating performance index all went above the PMI (Purchasing Managers’ Index) in the fourth quarter of 2017, showing the operators’ strong confidence in the market. The index of the second-tier cities was 69.8, 5.0 points higher than that in the third quarter and that of the first-tier cities decreased slightly while the leasing activity index stayed relatively high, reflecting the first-tier cities’ projects were still eyed in the market. Urban and community property index were 66.9 and 65.7 respectively, up 1.8 and 1.4 points than that in the third quarter. The rental consulting and operating performance of outlet-type property were still better than the other types.

In general, the stimulus effect of consumption on economy further appeared in 2017, and the trend of real business recovery was further consolidated. The development index of shopping centers stayed at a high level all the time.

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

Economic Information Daily: Recently, the General Office of the State Council printed and circulated the Opinions on Promoting the Coordinated Development of E-commerce and Express Delivery. What’s the significance of the policy paper for China’s e-commerce and express delivery? What are the highlights and innovative measures?

Gao Feng: The coordinated development of e-commerce and express delivery can help upgrade and transform China’s courier service, improve the quality and efficiency of e-commerce, and enhance user experience, to better serve and meet the needs of online shoppers.

The Opinions released by the General Office of the State Council targets challenges and focuses on coordinated development, outlining 18 specific measures in 6 areas and featuring the following:

First, reducing the burden on business by streamlining the licensing procedure for express delivery, reforming the annual reporting by delivery companies, introducing a filing system for terminal networks and enabling unified online licensing and filing. Second, addressing bottlenecks and encouraging local governments to manage delivery vehicles with uniform labeling, improve facilities for pick-up, loading, and charging, and identify reasonable routes and hours for facilitated access. Third, offering innovative public services by identifying the public nature of smart inboxes and terminal service sites and including them in the planning of public service facilities. Fourth, filling the gaps by encouraging the construction of terminal service sites and the development of intensive terminal services to address the last-mile problem, and urging e-commerce businesses and delivery service providers to connect their systems for data exchange, optimized resources allocation and synergetic supply chains. Fifth, identifying the direction of green development and promoting the green development of e-commerce by encouraging e-commerce platforms to run green consumption campaigns, pilot green packaging, and explore the system for packaging recycle and reuse. Sixth, adopting forward-looking policy design by establishing principles to improve open and shared data in light of the ever-fiercer competition for data resources and setting up a risk assessment and communication system for data blackout, among others.

Based on our pilots in 11 cities in the past three years and with reference to industry dynamics and future trends, the Opinions will effectively push for quality coordinated development of e-commerce and express delivery to meet the high demands of consumers for their greater satisfaction.

CNR: The US took China to the WTO over its quotas for rice, corn and wheat. What’s the progress? Thank you.

Gao Feng: To my understanding, panel is being formed for the case.

I’d like to emphasize that the tariff rate quota regime was expressly reserved by China at its accession to the WTO. The TRQ administration of related grains is compliant with China’s accession commitments and relevant WTO rules. China will handle the case appropriately in accordance with the WTO’s dispute settlement proceedings to defend its legitimate rights and interests.

CGTN: The Office of the USTR lately issued a report, which alleges that it’s a mistake to bring China into the WTO and that China is moving farther and farther away from the market economy. What are China’s comments? Some western countries refuse to recognize China’s market economy status. China has taken actions in response. What’s the latest progress? Second question, last May, the Dispute Settlement Body of the WTO ruled US anti-dumping actions on China against international trade rules. On 19th, the WTO arbiter gave the US 15 months until Aug. 22nd to implement the ruling. What’s China’s response?

Gao Feng: I understand there’re three questions. Regarding the USTR report, we’ve analyzed the report carefully, which includes many points that disregard facts, call black white and even contradict previous US reports and reeks of protectionism and unilateralism. China’s strongly against it.

We believe that genuine and reasonable market economy should be an economic regime that fits the respective conditions of the nations in which market plays a decisive role in resources allocation, rather than something molded on a certain country’s standard and imposed on others. Since the 18th CPC National Congress, China has made historic achievements in developing the market economy with a historic transformation. With the advent of the economic new normal, we have pursued the five development concepts and pressed ahead with supply-side structural reform and economic institutional reform, so that market can play a decisive role in resources allocation and the government can play a better role. As China’s economic structure keeps improving, we’ve set ourselves on a path of socialist market economy with Chinese characteristics. This meets China’s reality and is deemed good reference by developing countries and developed countries alike.

China’s accession to the WTO created opportunities and momentum for world economic development. According to the statistics of the UN and the IMF, among other international organizations, the Chinese economy contributed over 30% of world economic growth in 2017. Since China’s entry into the WTO, China’s general tariff level has dropped from 15.3% to 9.8%. We’ve continuously liberalized markets, cutting over 50 restrictions on manufacturing from the accession level. Among the 160 services sectors, China undertook to open 100 when it joined the WTO. As of today, nearly 120 sectors are liberalized to varying degrees. China is a Top3 market for goods export for 54 WTO members. In Nov. this year, we’ll host the China International Import Expo to further liberalize our markets. It has to be pointed out that in the past 16 years since China became a WTO member, US goods exports to China were up 500%, far outstripping the 90% growth in its exports to the wider world. China jumped from the 8th to the 3rd place in US export markets. As we can see, WTO members, including the US, have all shared in the China opportunities arising from our accession and enjoyed common development.

As for China’s role in the WTO and its influence on WTO rulebook, I’d like to emphasize that China has been an active participant, firm advocate and major contributor of the multilateral trading system all along. We hope that all WTO members can come together behind the multilateral trading system and the world economy and wouldn’t like to see certain members put self-interest first, reject the WTO and abandon multilateral rules, or solidarity of the organization undermined willfully. With China’s economic development entering a new era and stage, we wish to work with all WTO members, the US included, to advance the multilateral trading system, share in the China opportunities and grow the pie of commercial cooperation for mutual benefit, win-win and global economic growth.

Concerning the refusal by the EU and the US to grant China the so-called “market economy status”, to my understanding, it should be more specifically described as the EU and the US’s refusal of timely complying with their due international obligations concerning the Article 15 of China’s WTO Accession Protocol. We always stress that timely compliance of the Article 15 is an international obligation shared by all WTO members and has nothing to do with the so-called “market economy status” raised by few members based on their domestic laws. China has brought the practice of relevant members to the dispute settlement mechanism of the WTO. The case is progressing orderly based on WTO rules now.

Concerning the WTO arbitration, the WTO released the arbitration decision on the period of time for the United States to implement the recommendations and rulings of the DSB regarding United States – Certain Methodologies and Their Application to Anti-Dumping Proceedings Involving China on January 19. The award states that the "reasonable period of time" for the United States to implement the recommendations and rulings in this dispute is 15 months. As you mentioned, the time for implementation will expire on August 22, 2018.

In May 2017, the WTO adopted the rulings in this dispute that the long employed methodologies of US in determining anti-dumping duty rates and the refusal of applying separate rates are inconsistent with WTO rules. Any anti-dumping measure the US has taken on that basis is inconsistent with WTO rules.

China notices that, after the WTO ruling takes effect, the US indicated its intention for implementation but has yet to take any effective actions. We urge the US to respect WTO rulings, abide by multilateral trading rules and honor relevant international obligations by taking effective measures and stopping the abuse of trade remedies.

Xinhua News Agency: We have noticed that China has repeatedly stated that it does not want a trade war with the US, however, the US has made a series of moves lately. Comments say that the global safeguard investigation of imported photovoltaic products and large residential washing machines is the first step and the US has at least 156 trade measures against China in store. We take note that in the recent World Economic Forum, US Commerce Secretary Ross called the Made in China 2025 strategy a direct threat and said that the US might start IP infringement investigations against China. Does it mean that a trade war between China and the US will be triggered any minute? Is MOFCOM prepared to tackle these US moves and the trade war?

Gao Feng: Regarding China-US economic relations and trade, we always stress that, after nearly forty years of development, China-US economic relations and trade are inseparable and their interests are interwoven. When we properly handle each other's core and major interests, China-US relations will grow smoothly. Otherwise, they will be in trouble.

At present, China’s development has entered a new era. China’s economy has started a stage of high-quality development. We stand ready to share China’s development opportunities with world economies. We also hope that, as the largest two economies in the world, economic cooperation and trade between China and the US will not only drive their development, but also become positive drivers for world economic growth, while preventing uncertainty in global economic development or influence to stability of global trade and investment.

I would like to reiterate that cooperation is the only right choice for China and the US. China always opens its doors of cooperation and dialogue. We hope that trade frictions between China and the US will not escalate and two sides will constructively and successfully resolve conflicts and promote pragmatic cooperation. In addition, China will take all appropriate measures against unilateral and protectionist practice inconsistent with WTO rules to firmly safeguard its legitimate rights and interests.

Global Times: China’s Belt and Road Initiative have achieved huge periodical success. In 2018, what is China’s plan to expand market and select projects under the Belt and Road Initiative? At present, SOEs are the key players implementing the Belt and Road projects. Will more market players join this initiative in the future? How will the government offer more guidance and support?

Gao Feng: Since the inception of the Belt and Road Initiative, it has been warmly applauded by relevant countries. Constructions enjoy steady progress and many major projects have already started. Upholding the principles of extensive consultation, joint contribution and shared benefits, we stick to market-based operation and follow market and international-recognized rules. All types of companies will fully play their roles as the mainstay and third-party cooperation will be conducted to promote the Belt and Road Initiative.

This year, we will continue to create a convenient, stable and predictable environment for companies to join the Belt and Road Initiative. We will make the following efforts: First, we will strengthen its alignment with relevant national strategies and plans; second, we will further improve trade and investment facilitation level through bilateral and multilateral agreements; third, we will further improve public service system and update country-specific investment guides; fourth, we will guide companies to effectively prevent and reduce risks. Upholding the principles of extensive consultation, joint contribution and shared benefits with relevant Belt and Road countries, we will strive to spark vitality in all types of companies and comprehensively improve economic cooperation and trade in all areas for mutually-beneficial and win-win results and common development of Belt and Road countries.

CCTV Financial Channel: Some say that China’s 2017 online retail sales reached RMB 7 trillion. Could you brief us on the development of e-tailing last year?

In 2017, China’s e-tailing has shifted from high-speed growth to high-quality growth, with retail sales of RMB 7.18 trillion and the following features:

First, market scale is constantly expanding. In 2017, national e-tailing revenue increased by 32.2% year-on-year, a six percentage increase from that of last year. The online retail sales of physical goods reached RMB 5.48 trillion, up by 28%. It accounted for 15% of total retail sales of consumer goods, 2.4 percentage points higher than that of last year. Its contribution rate to the growth of total retail sales of consumer goods was 37.9%, or 7.6 points higher than that of last year. Online retailing becomes a stronger driver for consumption.

Second, regional distribution has improved. China’s e-tailing market is generally stronger in the East and weaker in the West, while mid and western regions enjoy strong momentum. According to MOFCOM, the top five provinces or municipalities of e-tailing transaction in 2017, namely Guangdong, Zhejiang, Beijing, Shanghai and Jiangsu, accounted for 74.8% of total national sales, down by 3.8 percentage points from that of last year. Regional concentration has somehow decreased. The transaction volume in western regions grew by 45.2%, twelve percentage points higher than that of eastern regions. The growth in the number of online shops located in Qinghai, Tibet, Gansu and other Western provinces topped the country in 2017.

Third, business models are more diversified and consumption improved in quality. In 2017, new players and business models of e-commerce developed fast. Cross-border operation, unmanned retailing, social e-commerce, quality e-commerce and second-hand e-commerce have created new consumption scenes and generated consumption demands. Quality, smart and green commodities have been more popular with customers and become their choices. According to MOFCOM, the growth in online sales of wearable smart devices, high-end household appliances, fresh produce, medical and healthcare products all exceeded 70% in 2017.

Fourth, the demonstration system is playing a bigger role in guiding the industry. In 2017, MOFCOM pressed ahead with building an e-commerce demonstration system. Localities improved the system with tailor-made measures and provided high quality public services. We’ve selected 238 companies as model e-commerce businesses, which lead in standard operation and innovation. Some of them sprang into action when agricultural produces witnessed difficulties in markets and helped solve the problem in an efficient way.

Fifth, new achievements have been made in targeted poverty alleviation through rural e-commerce. We continue to develop models for the e-commerce industry in rural areas such as using the platform to reduce poverty via different ways, including, among others, nurturing industry, building logistics, labor and financial support.

Sixth, we have helped e-commerce companies go global under the Belt and Road initiative. In 2017, we have actively promoted international cooperation among e-commerce industries along the Belt and Road, such as establishing cooperation mechanisms with seven BRI countries, setting up a BRICS working group on e-commerce, and agreeing on a proposal to promote BRICS e-commerce cooperation. In doing so, we have helped Chinese e-commerce companies explore overseas market and enhance their capability of doing business internationally.

Reuters: Yesterday the US Treasury Secretary said he welcomed a weaker US dollar. What are the impacts of a long cycle of a weaker dollar on China? Yesterday, China’s Sinovel was convicted of stealing trade secrets of the AMSC, a US company. What’s your comment? Is the decision fair?

Gao Feng: I haven’t followed these two issues you just mentioned. As for the currency, you may contact relevant agencies for more information.

21st Century Business Herald: According to a recent report by MOFCOM, in 2017, China was subject to 75 trade remedy investigations launched by 21 countries and regions, with 11 billion dollars involved. The number and value both declined on the basis of 2016. What does MOFCOM make of it? What’s your view on trade frictions in 2018?

Gao Feng: Statistics show that in 2017, China was subject to 75 trade remedy investigations launched by 21 countries and regions, including 55 anti-dumping, 13 countervailing and seven safeguard measures and involving 11 billion dollars in total. Compared with 2016, the number of investigations dropped by 37% and the value 23%. However, China remained the biggest target of global trade remedy investigations.

The decline is partly because in 2016, the cases and value involved were relatively high. Besides, an upswing in global economic growth plays a big role. International trade and investment is recovering. More and more economies have come to agree that we should oppose trade protectionism and use trade remedies with caution.

We still think China faces a severe climate this year in terms of trade frictions. Uncertain trade and investment policies of some economies, especially the protectionism and unilateralism tendencies, may cause more concerns about global trade and investment climate or even have a knock-on effect, such as trade remedies.

We have always held that trade remedies are used to uphold trade order and fair competition. We oppose the abuse of trade remedies and overprotection. It is hard to avoid trade frictions, but what’s important is to properly address problems through dialogues and cooperation, translate risks of conflicts to driving force of industrial cooperation, and build a more open global trade and investment climate and an open world economy at large.

Gao Feng: In the interest of time, last question please.

Economic Daily: We’ve noted that the used-car sold in China exceeded once again ten million vehicles in 2017. Could you please introduce the used-car business and what are the features of it?

Gao Feng: Statistics show that in 2017, more than 12.4 million second-hand cars were sold by 1,068 used-car dealers in 31 provinces, cities and autonomous regions in China, up by 19.33% year-on-year. The transactional value grew by 34% year-on-year to over 809 billion Yuan. In December alone, the sales grew by 7.4% month-on-month to 12.309 million, a YOY growth of 13.85%. The transactional value was up by 11.04% to 74.683 billion Yuan.

It is the second year in a row in which China’s used-car sales grows rapidly after exceeding the threshold of ten million vehicles in 2016, mainly thanks to the policies to energize the used-car market, especially doing away with the restrictions on flow of the used-car across regions. According to the Ministry of Public Security, China has 217 million automobiles, which means the used-car market has immense potential.

In 2018, we will continue to scrap the cross-region flow restrictions nationwide, accelerate the revision of the Measures on Circulation of Used-cars, put in place a system for information and credit, standardize the market, and further unleash market potential. In the meantime, we will drive the development of related services such as maintenance and insurance, improve the automobile market structure and guide high-quality growth in the principle of the Five Development Concepts.

Gao Feng: That’s all for the press conference today. Thank you!