GAO Feng: Good afternoon, friends from the press. Welcome to the regular press conference of the Ministry of Commerce. I do not have any specific information to brief you. We may go directly to the questions. The floor is open.

China Radio International: President Putin of Russia will soon pay a state visit to China. Could you talk about China-Russia cooperation?

GAO Feng: Under the strategic leadership of the two political leaders, the China-Russia comprehensive strategic partnership maintained high-quality development and yielded rich fruits in recent years. Thanks to the concerted efforts of both sides, bilateral economic and trade relations have been developing at a faster pace toward a higher level. There are several major features as follows:

The first feature is fast growth. Two-way trade kept robust rebound since last year and trade value amounted to USD 84 billion, registering a 20.8% year-on-year increase. In the first four months of this year, bilateral trade grew by 27.3% to USD 31.2 billion, making Russia the fastest-growing trade partner of China. Russia’s ranking in China’s major trading partner list rose from 11th last year to 9th at present. It is projected that two-way trade this year will exceed USD 100 billion. In 2017, direct investment of China in Russia increased by 72% to USD 2.22 billion. Chinese companies signed USD 7.75billion worth of engineering project contracting deals, a 191.4% increase, far ahead of other countries along the Belt and Road routes.

The second feature is extensive coverage. Apart from conventional cooperation areas such as energy, nuclear power, aerospace, aviation and infrastructure development, the two countries have been working together in new areas like the development of Fast East region, the North Pole, digital economy, cross-border e-commerce, and exploring new growth points for the bilateral economic relations. The cooperation has been extended from the traditional border regions to the coastal areas in southeast China, to Central and West China as well as Russian territories in Europe. 137 Chinese cities and provinces have their sister cities and provinces in Russia. This cooperative relationship has covered almost all sectors in economic terms and all regions in geographic terms.

The third feature is real results. Major strategic projects scored remarkable progress in recent years and strongly boosted cooperation in trade, investment and industry. In the energy sector, the double oil pipeline was completed and oil transportation started. The east gas line is under construction, and Phase I of Yamal LNG project is completed and put in operation. In the civil aviation sector, the JV for co-development of the CR929 long-haul, wide-body passenger aircraft was set up and started operation, and the project now enters essential stage. Co-development of heavy-duty helicopter is also progressing well. In cross-border infrastructure development, the construction of the Tongjiang River Railway Bridge and Heihe River Expressway Bridge is progressing steadily and the two projects will be completed in 2018 and 2019. In addition, cooperation in nuclear power, aerospace, satellite navigation and other technology areas has all achieved remarkable advance.

The fourth feature is great potential. Cooperation at sub-national levels across the two countries are booming with cooperation mechanisms constantly improved. Fairs and exhibitions like the China-Russia Expo and the Eastern Economic Forum are acquiring greater influence and playing a greater role in enhancing sub-national cooperation. This year and next year are the years for China-Russia Sub-national Cooperation during which we will see even greater passion and potential for subnational cooperation, a new driver to the bilateral economic and trade relations. In addition, the two countries are connecting the Belt and Road Initiative to the Eurasia Economic Alliance and making some important early harvest. The Agreement between China and the Eurasia Economic Alliance on Economic and Trade Cooperation was signed in Astana last month and the joint feasibility study on China-Russia-Eurasia Economic Partnership Agreement will soon kick off, marking a new, institution-guided stage of bilateral cooperation.

We believe that under the strategic guidance of President Xi Jinping and President Putin, practical economic cooperation between the two countries will embrace new opportunities, harvesting new fruits and generating new benefits for the two peoples. Thank you.

National Business Daily: The 2017 China E-commerce Report published by MOFCOM lately shows that China’s online retails accounted for a big share of the world’s total last year. Could you shed some light on the trends of China’s on-line shopping and its role in consumption upgrade?

Gao Feng: China’s online retail market is growing fast, with online physical goods sales contributing over 37% of the total retail sales of consumer goods. As a strong driver of consumption growth, it leads and accelerates China’s consumption upgrade.

I think China’s online retail market is taking on the follow trends:

First, more diversified business types. Apart from the online retail that consumers are very familiar with, social network e-commerce, live streaming e-commerce and unmanned retail, among other new business types and models keep emerging and forming new consumption bright spots.

Second, globalized supply. Online retail provides easier access to manufactures for farmers and to farm produce for urban residents. What’s more, as cross-border e-commerce booms, quality goods from across the world have become the primary choice of Chinese consumers. Cross-border e-commerce also represents a key channel for China to expand imports.

Third, regional coordination. Online retail drives the coordinated development of consumption in urban and rural, and eastern and western China. In 2017, online retail sales grew faster in the western region and the countryside than the national average by 8.5 and 6.9 percentage points, effectively unleashing the potentials of domestic consumption and expanding aggregate demand.

Fourth, premium services. The Logistics and after-sale services of online retail keep improving.

That said, online retail market also has some problems. Despite some improvement, sales fraud, infringement and counterfeit still exist. With the shift in China’s principal social contradiction, domestic consumption has entered a new era. We’ll step up efforts to improve legislation for online retail and optimize online consumption environment to make online shopping attractive and reassuring, and enhance consumer experience.

CNR: My question concerns China-US commercial consultations. We’ve noted that China’s statement on the consultations includes a sentence that reads ‘if the US imposes trade sanctions including tariffs, all the outcomes of the bilateral negotiations will cease to be valid.’ Does this mean that if the US flips again or announces the list of products for additional tariffs on the 15th as scheduled, the outcomes of the consultations will no longer be valid? It this comes to pass, is there any chance for more negotiations and consultations? How will China respond?

Gao Feng: China’s position is consistent and clear. We don’t want an escalation in our trade frictions. In order to implement the consensuses reached in DC, on Jun. 2nd through 3rd, the trade and economic teams of China and the US held candid and in-depth consultations, with positive and material progress in multiple areas.

China-US commercial relations are about win-win cooperation. Closer commercial cooperation is beneficial for the two economies and job creation and livelihoods on both sides. It is hoped that the US will pull in the same direction as China to promote balanced and coordinated bilateral commercial cooperation. Thank you.

Economic Information Daily: In the latest round of China-US commercial consultations, positive progress was made in agriculture and energy, among others. When will the specifics come out? The White House statement mentions that Trump’s goal is a fair bilateral trading relationship. What’s China’s comment? The US says the last round is part of the ongoing negotiating process. Is there a timetable for follow-up talks? Thank you.

Gao Feng: The specifics of the consultations are yet to be confirmed by the two sides. We’ve noted US concerns regarding bilateral commercial cooperation. In fact, over the past 40 years since the establishment of diplomatic ties, bilateral commercial cooperation has pressed ahead despite ups and downs with mutual benefit and win-win results. China is willing to expand cooperation and resolve differences appropriately through dialogue and consultation. It is hoped that the US will work with China to maintain stable and health growth in China-US commercial relations. Thank you.

Reuters: It was reported by Wall Street Journal that in the just-concluded negotiation, China offered to buy 70 billion dollars of agricultural and energy products from the US if it agrees not to apply the additional tariff. Is this true?

Gao Feng: In the consultation over last weekend, China and the US had in-depth and detailed discussion over specific areas of cooperation, especially in agricultural produce and energy. China is willing to increase import from the US as long as the US is ready to meet China halfway.

It is an established strategy for China to pursue reform and opening-up and increase import. China is willing to increase import from countries around the world, including from the US, so as to meet Chinese people’s demand for a better life and high-quality economic development. The Chinese market keeps growing. This November, China will hold the first International Import Expo. Competitive products from all countries are welcome to enter the Chinese market. We will build an international and law-based business environment and develop convenient, transparent and predictable trade terms that benefit businesses from around the world, including those from the US. Thank you.

Voice of China: We noted that at the beginning of this month, the US removed the exemption for steel and aluminum products from the EU, Canada and Mexico and started to apply 25% and 10% punitive tariff. The EU responded with tit-for-tat measures. The latest development is EU announcement that it will impose up to 25% tariff on 2.8 billion euro worth of US imports starting from next month. Canada and Mexico also announced reciprocal measures. In this context, there has been growing concerns over a global trade war. What are your comments?

Gao Feng: We have taken note of US measures and the responses from countries and economies concerned, as well as concerns from some international organizations. The world economy is stepping out of the shadow of the financial crisis and getting onto the track of recovery. China does not believe the trade frictions should be escalated. We do not want to see unilateralism, trade protectionism and the resulting restrictive measures that will disrupt the free trade order, destroy the multilateral trade rules and establish new barriers to world economic recovery. We hope the parties concerned will intensify dialogue and cooperation on the principle of mutual benefit, and jointly contribute to global economic prosperity and development. Thank you.

Xinhua News Agency: We noted that Vice Premier Liu He spoke to Vice President Katainen on the phone and agreed to hold the 7th China-EU High-level Economic Dialogue as soon as possible. What are the considerations for this HED in the current context? Is it related to the trade frictions between China and the US and the uncertainties that were created? What will be discussed at the HED? What outcomes does China expect?

Gao Feng: This year marks the 15th anniversary of China-EU comprehensive strategic partnership and 20th anniversary of the establishment of the leaders’ meeting mechanism. China, as always, is committed to trade and economic relations with the EU. Recently, Vice Premier Liu He spoke to Vice President Katainen on the phone and agreed to hold the 7th HED at an early date. This is a normal and regular exchange between Chinese and European leaders in the trade and economic area. The two working teams are making concrete arrangement for the dialogue.

Against the backdrop of global economic recovery and uncertainties and instabilities it faces, China is willing to step up results-oriented trade and economic cooperation with the EU, jointly stand up for the multilateral trading system and contribute to steady and healthy global economic growth.

21st century economic report: Since the special preferential policy for foreign investment was removed, how will China attract foreign investment in the new round? How will China attract foreign investments to central and western China and prevent them from going to other countries?

Gao Feng: I think you were referring to some traditional supportive policies by “special preferential policies”. As the economic globalization develops further, multiple factors, such as market access and investment environment may be the determinants for trans-nationals and FIEs to invest overseas

The latest executive meeting of the State Council set out the measure to utilize foreign investment in a proactive and effective manner. We will work on investment liberalization, market access, and the protection of interests and rights, and build a fair, transparent, and convenient investment environment for foreign investors, so as to foster new bright spots and engines to attract foreign investment. We will let the national development zones lead by example, and turn them into the new commanding ground for foreign investment utilization.

As for attracting more foreign investment to central and western China, we will work on the following four aspects:

First, we will enhance investment facilitation, support central and western regions in replicating successful experience of pilot free trade zones and reduce institutional cost of doing business.

Second, we will improve support policies, such as implementing tax, land use, credit preferences, and channel more FDI into central and western China.

Third, we will build cross-border multi-mode transport corridor, promote connectivity with neighboring countries and reduce logistics cost in central and western China.

Fourth, we will strengthen the role of central and western regions as platforms of building open economy, support border provinces and regions to actively integrate with Belt and Road cooperation and promote the development of border and cross-border economic cooperation zones. Thank you.

Shanghai Securities Daily: In the first three months this year, establishment of businesses with foreign investment increased by 100% year on year. But we’ve noticed the value of FDI only registered a YOY growth of 0.5%. The first quarter only sees a YOY growth of 0.1%. What’s the status and outlook of China’s FDI inflow?

Gao Feng: In the first four months this year, paid-in FDI in RMB registered a YOY growth of 0.1% in China and 2% in USD. However, the number of new FIEs grew by 95.4% YOY. Overall speaking, China’s inward FDI flow is at a critical juncture of transformation and upgrading. Regarding the structure of utilized FDI, the share of investment in the high end of industrial chain continues to rise. From January to April, FDI in high-tech industry increased by 20.2% YOY, accounting for 20.8% of total FDI inflow. Foreign investment in high-tech manufacturing soared by 79.5%, taking up 34.9% of total investment in manufacturing.

As the world economy recovers, so does international investment. Countries have stepped up efforts to make them more attractive to investment. Entering a stage of quality-oriented development, despite the intense international competition for investment, China boasts industrial support capacity that continues to grow stronger, highly skilled human resources, a business environment that keeps getting better and tremendous market potential. We are confident in achieving high quality growth in utilizing foreign investment and make China remain a hot spot for FDI. Thank you.

Phoenix Satellite TV: There has been concern about intellectual property infringement in China among foreign investors, which is also a trigger point for frictions between China and its major trading partners like the US. What efforts has China made recently to remove such worries?

Gao Feng: The Chinese government takes IPR protection very seriously and has strengthened legislation, jurisdiction and enforcement in this regard. We know only with effective IPR protection can we foster a favorable environment of innovation and entrepreneurship and bring inexhaustible driving force for national development. We will continue to enhance efforts to combat IP infringements, raise the cost of violating IP laws and provide better protection for FIEs’ IP. When a foreign company has an IP-related issue, it can lodge a complaint through legal channels and procedures. The Chinese government will protect the rights and interests of FIEs in accordance with law. Thank you.

Global Times: Reports have been saying that the Belt and Road projects have increased the debts of countries along the routes. What’s MOFCOM’s comment?

Gao Feng: The Belt and Road initiative has been highly commended and positively responded by the international community and relevant countries since its inception. We have always stuck to the principle of extensive consultation, joint contribution and shared benefits and never forced others to do business with us. The projects are jointly conducted with host nations on the basis of equal negotiations with a view to win-win results and mutual benefits. Enterprises play a leading role in the projects according to market rules while governments work to create a good investment and business environment. Since the beginning of these projects, Chinese enterprises have built 75 trade and economic cooperation zones in BRI countries with a total investment of USD 25.5 billion. They have paid up to USD 1.7 billion taxes to host nations and created nearly 220,000 jobs for the local communities. It is not a burden but hope and growth that comes along with the BRI projects into these countries. China is ready to work with relevant countries to press ahead with BRI development so as to realize mutual benefit, win-win results, and common development and benefit all the peoples in the region. Thank you.

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