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Regular Press Conference of the Ministry of Commerce (May 31, 2018)

Dear friends, good morning! Welcome to the regular press conference of the Ministry of Commerce. Today, I have four pieces of information to release.

I. The Latest Progress of “Belt and Road” Economic and Trade Cooperation

In this year, “Belt and Road” economic cooperation has been deepened continuously and has gained positive achievements.
1. Trade and investment cooperation with the countries along the Belt and Road routes has been deepened continuously. In January-April, the import and export volume of trade in goods between China and the countries along the routes reached US$ 389.1 billion, up 19.2% year on year; outward non-financial direct investment reached US$ 4.67 billion, up 17.3% year on year; the complete turnover of foreign contract projects was US$ 24.2 billion, up 27.7% year on year.

2. Regional economic integration accelerated. FTA with Georgia entered into effect officially, and the first round FTA negotiation with Mauritius was held. The economic and trade cooperation agreements with Eurasian Economic Union was signed and the second phase of FTA negotiation with Brazil continued.

3. Important projects gained positive progress. Addisababa Djibouti Railway started the commercial operation, Gwadar Free Trade Zone opened officially, Mombasa Nairobi Railway enjoyed a favorable operation, the infrastructure construction of the first stage of China-Belarus Industrial Park was completed and the construction of China-Laos Bohan - Boten economic cooperation zone and China-Kazakhstan Khorgos International Border Cooperation Center was accelerated. Up to the end of April, China had constructed 75 outbound economic and trade cooperation zones in the countries along the routes with the investment accumulated to US$ 25.5 billion. 3,800 enterprises entered into these zones, paying taxes of about US$ 1.7 billion to the host country, and created about 220,000 employments for the local places.

II. Major Economic Indicator of China National Economic and Technical Development Zone in 2017

According to the statistics of Ministry of Commerce, in 2017, the 219 national Economic and Technical Development Zone (hereinafter referred to as ETDZ) actively practiced the new development concept and gained a stable and better development trend in general. Major economic indicator maintained a year-on-year growth.

In 2017, the regional GDP (gross domestic products) of the 219 ETDZs realized 9.1 trillion yuan, up 9.9% year on year, 3 percentage points higher than the average level of the whole country in the same period ( by 6.9%), and accounting for 11% of the national GDP in the same period. Among these, the value added in the secondary industry reached 6.1 trillion yuan, up 6.1% year on year, the same as that of the national average level in the same period (6.1%), and accounting for 18% of the value added in the secondary industry of the whole country; the value added in the tertiary industry reached 2.8 trillion yuan, up 17.3% year on year, 9.3 percentage points higher than that of the national average level in the same period (8%), and accounting for 6.7% of the value added in the tertiary industry of the whole country;

In 2017, the 219 ETDZs realized the fiscal revenue of 1.8 trillion yuan, up 15.9% year on year, 8.5 percentage points higher than the average level of the country over the same period (7.4%), and accounting for 10.3% of the total government revenue; the realized tax revenue was 1.6 trillion yuan , up 12.2% year on year, 1.5 percentage points higher than the average level of the country over the same period (10.7%), accounting for 10.9% of the total national tax revenue; the realized import and export volume was 5,6 trillion yuan, up 17.5% year on year, 3.3 percentage points higher than the average level of the country over the same period (14.2%), accounting for 20.1% of the total amount of national import and export.

Next, the Ministry of Commerce will follow the development direction of integrating the industries and cities, simultaneously developing the secondary and tertiary industry, starting up and innovating, attracting investment and introducing talents, optimizing mechanism and simplifying the organizations and improving efficiency, and continue to promote the transformation and upgrading of China National Economic and Technical Development Zone, so as to realize a high quality development.

III. About the regional economic cooperation of Shanghai Cooperation Organization (SCO)

The SCO is not only an important platform for the construction of the Silk Road Economic Belt, but also connects the Maritime Silk Road to the two major markets of Asia and Europe. Over the past 17 years since the establishment of the SCO, remarkable achievements have been made in economic and trade cooperation field.

1. The trade contacts have become closer. The total trade volume between China and the member countries of SCO in 2017 was US$217.6 billion, up 19% year on year. Among these, the export of China was US$150.3 billion, up 15.1% year on year; the import of China was US$67.3 billion, up 28.5% year on year. The trade volume in the first quarter of 2018 maintains a good momentum of growth, with an increase of 20.7%. The trade structure of China’s trade with member countries has been gradually optimized, and the proportion of mechanical and electrical products and machinery and equipment has continued to increase.

2. Fruitful achievements have been made in investment and contractual projects. By the end of March 2018, China’s investment stock in the member countries was about US$84 billion, and many large-scale energy, mining and industrial manufacturing projects went on smoothly. The contract value of China in the SCO member countries reached US$156.9 billion, and a batch of highway, power station and pipeline engineering projects became regional demonstrative projects.

3. Progress has been made in connectivity. The SCO Intergovernmental Agreement on Creation of Beneficial Conditions for International Road Transportation came into force. China-Kyrgyzstan-Uzbekistan railway was completed and open to traffic. China-Central Asia Natural Gas Pipeline and China-Kazakhstan and China-Russia Crude Oil Pipelines were built and operated. CHINARAILWAY Express operated normally and efficiently. A complex infrastructure network covering roads, railways, oil and gas, and communications was initially formed in the SCO, further tightening the interest bond among member countries.

IV. Situations about the 3rd Ministerial Conference of China and Central and Eastern European Countries on Promoting Trade and Economic Cooperation, and the 4th China-CEEC Investment and Trade Expo

The 3rd Ministerial Conference of China and Central and Eastern European Countries on Promoting Trade and Economic Cooperation will be held in June 6-7, 2018 in Ningbo, and the 4th China-CEEC Investment and Trade Expo will be held in Ningbo. At that time, ministerial officials responsible for trade and economic affairs in China and 16 countries in Central and Eastern Europe will attend related activities. Focusing on the theme of “deepening 16+1 economic and trade cooperation”, China and the countries in Central and Eastern Europe will discuss the cooperation in the fields of trade, investment, connectivity, production capacity, finance, e-commerce and SMEs under the framework of deepening the Belt and Road and “16+1 Cooperation”. Ministry of Commerce and the Ningbo Municipal Government will hold a special press conference here tomorrow at 10 o'clock in the morning, and the detailed information will be introduced to you.

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

CCTV4:Last Tuesday, on May 29th, the White House announced a 25% tariff hike on US$ 50 billion of Chinese imports, with the details coming out by Jun. 15th and related measures coming into force immediately after that. Does this mean the US is again starting a trade war with China? What’s China’s response? What are China’s next steps? Will it respond with another list of goods?

Gao Feng: Regarding the US move, we’ve made China’s position very clear. The trade and investment restrictions on China announced by the US at this juncture are unexpected, but not a total surprise. China has been maintaining a healthy and stable China-US commercial relationship under the principle of mutual benefit and win-win, to protect the momentum of world economic recovery. We hope that China-US commercial cooperation can benefit both peoples and are loath to see an escalation in our trade frictions. Meanwhile, we have the faith, the capability and the experience in defending the interest of the Chinese people and core national interest. Thank you.

Phoenix TV: Given the statement of the White House, will US Commerce Secretary Ross’ scheduled visit to China go ahead as planned? What are China’s expectations for and position in the new round of talks?

Gao Feng: China keeps its door to negotiations open. As you may know, the US working team arrived in Beijing yesterday afternoon. In the next few days, the US team of 50 will hold consultations with the Chinese team on following through on the joint statement. We always hold that China and the US enjoy extensive common interests and broad space of cooperation in commerce and should seek common grounds and work for win-win. Hopefully, the US will pull in the same direction as China and actively implement the consensuses in the joint statement to benefit the businesses, consumers and economies on both sides and the world economy through commercial cooperation in the interest of both peoples and all nations. Thank you.

CNS: Still about the statement, the US said it will impose investment restrictions and export control on China starting from Jun. 30th. What’s MOFCOM’s comment?

Gao Feng: We’ve noted the measures announced by the US. China believes that these measures are at odds with the basic principle and spirit of the WTO. China will carry out a careful assessment of US measures and related impact and reserve the right to take corresponding actions. Thank you.

CCTV: What outcomes and consensuses will this year’s SCO Summit achieve?

Gao Feng: Since China took over the presidency last Jun., China and other member states have worked actively on regional trade facilitation, trade in services, e-commerce, cross-border transport, customs information sharing, SMEs and think tank exchanges, among others, with new breakthroughs. The Qingdao Summit is the first summit meeting after the expansion of the organization. We’ll work with others in the Shanghai spirit towards outcomes in the following areas:

First, forging new consensuses and speaking with one vocal voice. In celebration of the Shanghai spirit, we’ll continue to pursue common development and underline the importance of improved global governance and strengthened multilateral trading system.

Second, continued impetus for trade facilitation. In line with the three-step objectives set in the early days of the SCO, we’ll support further improving the mechanism and legal foundation for trade facilitation.

Three, renewing cooperation dynamics with a collective blueprint. India and Pakistan bring fresh blood and momentum to regional economic cooperation. The parties are likely to secure more consensuses in strengthening MSME cooperation, trade in services, e-commerce and economic think tank collaboration.

SCO members will work together to push the Qingdao Summit to agree encouraging common measures on the commercial front, raise regional economic cooperation to a new level, and bring more benefits to the peoples of the region.

China Media Group: President of Kazakhstan Mr. Nazarbayev and President of Kyrgyzstan Mr. Jeenbekov will attend the 18th meeting of the SCO Council of Heads of State and pay a state visit to China in early June at President Xi Jinping’s invitation. What’s your comment on trade and economic cooperation between China and the two countries?

Gao Feng: Over past seven years since the establishment of China-Kazakhstan comprehensive strategic partnership, under the strong leadership and care from the highest level, the Belt and Road initiative has been closely connected with Kazakhstan’s new economic policy “Nurly Zhol” (the Bright Road) and “Third Stage of Modernization”. Bilateral trade and economic cooperation is picking up steam and has yielded fruitful results.

First, bilateral trade increases rapidly. According to Chinese statistics, bilateral trade value reached US$18 billion in 2017, up by 37.4% year-on-year, ranking among the fastest growth in trade between China and major trading partners. China imported Kazakh natural gas in 2017 for the first time, which will further enhance bilateral trade.

Second, cooperation on major projects speeds up paces. China and Kazakhstan have formulated an early harvest list of 51 production capacity projects, among which four have entered production and 11 have been launched. In addition, major projects worth more than US$1 billion in chemical and infrastructure have also been accelerated by Chinese companies.

Third, connectivity brings marked results. In 2017, over 1,800 cargo trains passed through Kazakhstan with a YOY growth of 50%. The cross-border channel between China and Europe via Horgos port has gained more and more influence.

Fourth, financial cooperation continues to upgrade. China is Kazakhstan’s biggest commercial loan source and the fourth largest source of investment. Investment and financial cooperation in non-energy sectors have grown rapidly. China actively participates in building the financial center in Astana.

Fifth, agricultural and local-level cooperation is thriving. A series of Kazakh agricultural produce has quickly obtained market access to China. Bilateral cooperation on farming, husbandry, agricultural processing, agricultural technology, logistics and transportation, among others, has gone from strength to strength, which has become a bright spot in China-Kazakhstan trade and economic cooperation. The first forum on local cooperation has been successfully held. Leaders and over 40 governors from the two countries have attended the event which provides a new platform for local-level exchanges and cooperation.

With regard to China-Kyrgyzstan commercial cooperation in recent years, thanks to the care and support of two leaderships, Kyrgyzstan actively supports the Belt and Road initiative. Bilateral trade and economic cooperation has made steady progress and fruitful results.

First, bilateral trade is expanding in scale. According to Chinese statistics, in 2017, bilateral trade value reached US$5.45 billion, a 150 fold increase from US$35.48 million in 1992 when the two sides established diplomatic ties. China remains Kyrgyzstan’s largest trading partner. In the first quarter this year, bilateral trade value amounted to US$1.78 billion with a YOY growth of 10.1%.

Second, investment cooperation has been active. Chinese statistics show that by the end of 2017, total Chinese direct investment in Kyrgyzstan had reached US$3.86 billion, making China the largest source of investment in the country. The investment areas include, among others, agriculture, infrastructure, transportation, energy and mining.

Third, economic cooperation and assistance has generated remarkable outcomes. China has many economic assistance projects in wide areas and multiple regions, bringing real benefits to local people. The thermal power station in Bishkek, China-Kyrgyzstan-Uzbekistan highway, north-south highway, irrigation system upgrade, Osh hospital and other projects are moving ahead smoothly, which has further deepened the friendship between our two peoples. Thank you.

21st Century Business Herald: I noticed that you just mentioned that in 2017, the total import and export of 219 state-level economic development zones already accounted for 20% of the national total. Could you further brief on the import and export of state-level economic development zones in 2017?

Gao Feng: I will further elaborate on the foreign trade of 219 state-level economic development zones in 2017. I just mentioned that the total import and export of 219 state-level economic development zones in 2017 was RMB 5.6 trillion, with a year-on-year growth of 17.5%. On export, the total export was RMB 3.2 trillion, with a year-on-year growth of 17%, 6.2 percentage points higher than the national average in the same period. The export of new and hi-tech products was RMB 1.1 trillion, with a year-on-year growth of 11.5%, or 35% of the total export by state-level economic development zones and 24.6% of the total national export of new and high-tech products. On import, the total import was RMB 2.4 trillion, with a year-on-year growth of 18%, 0.7 percentage point lower than the national average in the same period. The import of new and high-tech products was RMB 773.7 billion, up by 5.3% year on year, or 32% of the total import by state-level economic development zones and 19.6% of the total import and export of new and high-tech products nationwide. State-level economic development zones will continue to serve as a model and develop export-oriented industrial clusters to constantly boost industrial competitiveness. Thank you.

Economic information daily: The executive meeting of the State Council on May 23 decided that, on the basis of the pilot program on innovative development of trade in services in 2016, the same program will be continued in 17 regions starting from July 1 this year, including Beijing. What about the pilot programs in 15 regions earlier? Apart from expanded scope, does this deepened pilot program have other features?

Gao Feng: In February 2016, The State Council approved the pilot program on innovative development of trade in services in 15 regions. Since then, MOFCOM has worked with relevant authorities and pilot regions for active exploration and summarized 29 items of replicable and scalable experience in improving management, promotion and policy systems, regulatory model, and developing new model and form of trade for trade in services. We have initially explored the model and path for trade in services in a new era in the following specific areas:

Management system includes establishing an interagency coordination system for trade in services, a monitoring system for trade in services statistics and promoting interdepartmental interaction and data sharing.

Promotion system includes support for trader in services to explore international markets, building financial platforms supporting trade in services, IPR overseas early warning services and strengthened cooperation between localities and key partners of trade in services.

Policy system includes tax incentive, establishing funds guiding innovative development, IPR collateral funding, more support for export credit insurance, innovative financing policies, facilitating international talent flow and optimizing policies on international students.

Regulatory model includes incorporating trade in services issues into the single window for international trade, innovating regulatory model for the entry and exit of R&D products and special items, innovating export facilitation for new services, such as cruise traveling and international convention, and introducing the “Internet plus customs” reform.

In terms of new types of business and new models, we will promote digitalization of service trade by utilizing big data, apply internet to the trade of traditional Chinese medicines, language service trade, smart management of cross-border e-commerce (CBEC) logistics and payment, and innovation in CBEC-related services. The best practices of these trial programs have been approved by the State Council to be replicated and disseminated nationwide.

In the efforts to deepen the pilot programs in Beijing and 16 other regions, in addition to extending the timeframe and expanding the scope, we will introduce opening-up measures in telecommunications, tourism, engineering consultancy, finance, and law. In response to the direction of the State Council to improve the regulatory system and adopt creative regulatory models in eight aspects and deepen the pilot programs, we will also introduce supplementary policy support, for example, we will provide customs clearance and visa facilitation for service-related goods import and export and personnel movement, exempt duties for service expo, grant zero-tariff treatment when it’s proper, stimulate innovative development of trade in services and foster new highlights in development and opening-up. Thank you.

[Shanghai Securities]: The renewed negative list for foreign investment is scheduled to be published on July 1. How is the progress?

Gao Feng: At the direction of the CPC Central Committee and the State Council, NDRC and MOFCOM, together with other authorities concerned, are working on the new negative lists for foreign investment nationwide and in the pilot free trade zones. On top of the opening-up measures in finance and automobile that have already been announced, the new lists will remove or ease foreign equity cap in energy, resources, infrastructure, transport, commercial circulation, and specialized services. In addition, the new lists will outline the opening-up measures for the coming years by providing transitional period to industries concerned. To date, the related work is moving forward smoothly and the new negative lists will be unveiled by June 30. Thank you.

Given time, I will take the last question.

CNR: We noted that President Macron recently suggested that the US, the EU, China and Japan hold consultations over WTO reform and thoroughly renew the rules on international competition. What is your comment?

Gao Feng: We noted the report. China is fully committed to defending the multilateral trading system. We would like to work with all members of the WTO to make multilateral rules more open, inclusive, transparent, and non-discriminatory without prejudice to the core values and basic principles of the multilateral trading system. China is willing to keep up communication with the other members under the WTO framework and promote the healthy development of the multilateral trading system. Thank you.

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

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