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Regular Press Conference of Ministry of Commerce (June 21, 2018)

Gao Feng: Friends from the media, good morning, welcome to the regular press conference of Ministry of Commerce.Firstly, I have one pieces of information to inform you.

I. Situation about the 7th China-EU High Level Economic and Trade Dialogue

Decided by China and the EU, the 7th China-EU High Level Economic and Trade Dialogue will be held on June 25 in Beijing. Liu He, Member of the political bureau of the CPC central committee and Vice Premier of the State Council, and the Vice President of the European Union Jyrki Katainen co-chaired the dialogue. The dialogue conducted in-depth discussion on “Supporting and promoting globalization, deepening and expanding China-EU cooperation.”

2018 is the 40th anniversary of China’s reform and opening up, and also the 15th anniversary of the establishment of China-EU comprehensive strategic partnership, as well as the 20th anniversary of the establishment of the mechanism of China-EU Leaders’ meeting. It is of great significance to hold China-EU High Level Economic and Trade Dialogue at the important time when China-EU economic and trade cooperation is facing new historical opportunities.China-EU High Level Economic and Trade Dialogue is the highest level economic and trade dialogue mechanism between China and EU, and is an important platform for the two parties to conduct communication and coordination on economic and trade policies. It has been held successfully 6 times since 2007 when it was established, and played an important role in deepening bilateral reciprocal cooperation and promoting the solution of important economic and trade concerns. The high level dialogue this time will continue to have discussions on the common concerns like international economic governance, trade and investment, innovation-driven development and connectivity, so as to promote bilateral economic and trade cooperation to step to a new level, inject new force to China-EU comprehensive strategic partnership, and sending the positive signal that China and EU oppose unilateralism and protectionism, and support multilateral trading system.

The above is the information I want to tell you, and next, I am willing to answer your questions.

China News Service: We have noticed that US President Trump recently directed the US Trade Representative to prepare a list of $200 billion worth of Chinese goods to subject to an additional 10% tariff. Trump says that the new tariff will go into effect if China insists on going forward with the new tariffs that it has recently announced. If China rolls out another wave of tariffs, the US will impose additional tariffs on another $200 billion worth of Chinese goods. What is MOFCOM’s response to that?

Gao Feng: China’s position is consistent and clear. We oppose such practice of holding the stick of trade protectionism, imposing maximum pressure and blackmail. The US abuses the levy of tariff and provokes trade wars around the globe. This will seriously damage the world trade order and hurt the interests of trading partners, US companies and people. Such conduct is unpopular.

The US has many structural problems of its own, but it always regards other countries as a scapegoat for its own problems and makes unwarranted charges. The US accuses China of IP theft and mandatory technology transfer, which is a gross distortion of history and reality. During China’s reform and opening up, many foreign companies conducted sound technical cooperation based on their own interests with Chinese companies, which is typical market contract behavior and foreign companies received substantial returns, as is known to all. The US ignored all those basic facts and placed blame on China, which is a denial of property right, credit awareness, spirit of contract and market rules. Thank you.

Iran Islamic Republic News Agency: First, I want to thank the spokesman for the opportunity to raise a question. As the US withdrew from the Iran nuclear deal, how will the business cooperation between China and Iran develop? Will the Chinese companies in Iran withdraw?

Gao Feng: China and Iran have maintained normal business relations. According to Chinese customs statistics, in the first four months of 2018, the bilateral trade between China and Iran was USD 13.21 billion, up by 9.3% year on year. The government of China has always opposed unilateral sanctions by any country based on its domestic laws against other countries. China will continue to maintain normal economic and trade ties with Iran under the prerequisite of not violating its international obligations.

China Media Group: My question is also about China and the US. We have noticed that China previously announced that it would cut import tariffs on vehicles. While in the list of US products that are subject to additional tariffs announced by China, there are also some automobile products. How will we deal with the conflicting parts? Will there be any conflicts between imposing tariffs on imports from the United States and China’s further opening up?

Gao Feng: Further reducing import tariffs on some goods, including automobile, is an important move of China to further open up. Some goods are included in China’s tariff list of products as a response to the unilateral tariff measures taken by the US, to which China has no other alternative but to do so. It is consistent with relevant Chinese laws and the basic principles of the international law and does not conflict with our efforts to actively expand imports. China will continue to open its market and will host the first China International Import Expo this November so that countries around the world will share the opportunities brought by China and achieve common development. It is hoped that the US will conform to the wishes of Chinese and US businesses for enhancing cooperation and will not miss China’s rapid development. Thank you.

Phoenix Satellite TV: We’ve noted the announcement by US Commerce Secretary Wilbur Ross of imposing anti-dumping duties of up to 167.16% on common alloy aluminum sheets imported from China. What is China’s response?

Gao Feng: We have taken note that the US sticks to the wrong way of using the surrogate country approach in preliminary investigations and assigns a ridiculously high dumping margin of 167.16% for all Chinese companies involved in the case. Meanwhile, the US investigators abused the adverse facts in the process. Accusing Chinese companies of submitting the third questionnaire near the deadline of preliminary determination, the US investigating authority determined that Chinese companies failed to fully cooperate in the probe despite that all the Chinese responding companies had submitted the questionnaires on time.

What the US has done hurts Chinese companies’ interests badly and, even worse, undermines the solemnity and authority of multilateral rules. It is hoped the US investigating authority can uphold justice in its determinations, allow Chinese companies full rights to defend themselves, and fulfill their international obligation in earnest. China will take necessary measures to safeguard the rights and interests of Chinese businesses. Thank you.

CGTN: We’ve noted that quite a lot of American companies and scholars have vocally opposed tariff measures by the US, arguing this is not in the interest of China-US trade and economic cooperation. The US business communities and industrial associations are also disgruntled, including the American Soybean Association, Farmers for Free Trade and Association of Equipment Manufacturers. What is MOFCOM’s comment?

Gao Feng: We’ve noted the deep concern in the United States over unilateral tariff measures by the US. The number of opponents is growing and the scale is spreading. First speaking out are chambers and associations whose interests are directly at stake, then joined by financial, agricultural and manufacturing associations. Some experts and scholars on international trade have voiced opposition too. In recent years, distinctly different opinions have appeared in the US politics. The international community is also concerned about and against the tariff measures.

The flip-flop on the US side has not only disappointed China and the international community, but also met with strong opposition. At the end of the day, the unilateral and protectionist measures taken by the US will undermine the interests of American companies, workers and farmers, and the interest of the world economy, and face mounting opposition. The US is hoped to take note of the opinions of all sides and come back to the right track. Thank you.

Reuters: My first question is that when MOFCOM said if the United States loses its rationality and unveils another list, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones, what measures do you mean? Is there a limit to China’s patience with US’ provocation and under what circumstances will China stop negotiating with the US?

Gao Feng: If the US publishes the so-called tariff list, distorts international trade and adopts unfair trade practices, China is fully prepared to use all measures including quantitative and qualitative tools to strike back and firmly protect the interest of the country and people.

When it comes to the trade dispute, with the overall trade and economic relations in mind, China has always actively pushed for consultations in a positive and pragmatic manner. At one point, the two sides set up a clear negotiation roadmap and timetable. Based on the agreement achieved on May 19th in Washington D.C., the two countries held concrete consultations on agriculture and energy in early June, which was applauded by all sides. China and the US were supposed to discuss manufacturing and services, as well as structural issues of common interest these days according to the agreed schedule. China believes that previous consultations which are positive and constructive serve the interest of both peoples, follow the agenda of reform and opening up and observe WTO rules. To our deep regret, the US flip-flopped again and went even further to start a trade war. That leaves China with no choice but to strike back. The US has a habit of negotiating with a big stick, but it’s not working on China. Such irrational behaviors are not helpful to solve problems. Thank you.

Xinhua News Agency: You said the trade war started by the Trump administration was strongly opposed by many US companies, while the government internally also has diverging voices. Do you believe this is the reason for the flip-flop of the US? How do you view the future development of the trade dispute between China and the US?

Gao Feng It is evident that the US is flip-flopping. I’d like to stress that China will make well-prepared response no matter how the US may change its attitude. In accordance with our own agenda, we will firmly pursue reform and opening-up and high-quality economic development with a people-centered approach, and build a modern economic system at a faster pace. We will take good care of our own business. We are confident that the Chinese economy has bright prospect and huge potential. Thank you.

[21st century economic report]: When it released the statistics on outbound investment, MOFCOM indicated that the businesses in the three northeaster provinces of China are increasingly active. What are the reasons for it? What are the characteristics and evidence?

Gao Feng: Indeed, the three northeastern provinces have witnessed significant growth of outbound investment for three months in a row. This is mainly due to their active participation in the Belt and Road development and engagement in international production capacity cooperation, such as the China-Belarus Industrial Park, and other major projects. A rather low base from last year is also a factor.

In the next step, MOFCOM will continue to encourage and support the able and creditworthy companies in the three northeastern provinces in taking their business international. Under the framework of Belt and Road, they could carry out outbound investment and cooperation with a focus on international production capacity and equipment manufacturing. We will provide the right conditions, environment and services so as to cultivate new competitive advantages of the businesses, promote industrial transformation and upgrading, and increase the level of openness in northeast China. Thank you.

Economic Daily: According to some e-commerce firms, during the promotion of June this year, their platforms saw an increase of over 37% in terms of the cumulative value of the orders. What’s your comment on the development stage of the e-commerce industry? What are the new dynamics that are playing out?

Gao Feng: After decades of growth, e-commerce in China has evolved from a follower into a competitor. In some areas, such as the market size and technology application, we have become a pace setter. In quantitative terms, online retail sales registered over 40% annual growth in recent years. Starting from 2013, China has been the world’s largest online retail market for five years in a row. In qualitative terms, new business types and models keep emerging, the quality and service keep improving, online and offline business are increasingly integrated, and market order is increasingly regulated.

The recent development of the e-commerce industry has taken on some new characteristics: first, online retail becomes increasingly quality-oriented, and consumers have rapid-growing demand for high quality goods. For example, on some platforms, the sales of big-screen hi-fi TV grew by ten times year on year, high-end vacuum cleaner, by three times, imported sea food, by 2.5 times. Second, logistics and delivery have become much more efficient. Thanks to broad application of big data, cloud computing, smart logistics, and AI, delay of shipment and pileup of parcels have become less of a problem. The third characteristic is the integrated development of online and offline business. The e-commerce platforms and brick and mortar stores, complementary to each other and interconnected in development, are transitioning from competition to win-win cooperation. China’s retail industry is becoming digitalized at a faster rate, and the signs for high-quality development in e-commerce have emerged.

China Daily: According to the business confidence survey released by the European Chamber on the 20th, the surveyed European businesses had sound finance performance in 2017 but some complained about the inconvenience of the internet blockade in China. Around 60% of the companies expected further opening up of the market in China. How do you view the complaints from the European businesses? You said earlier that China will release the new negative list for foreign investment recently. Do you have a time table for implementation? Can the negative list solve the problems of the businesses?

Gao Feng: We noted the survey report of the European Chamber. It is based on the survey of 523 European companies in China, and contained some bright spots. For example, in 2017, European businesses had improved operation in China. 66% of the respondents reported higher revenue than 2016, among which over 80% medical equipment producers and pharmaceutical companies delivered revenue growth. 93% of the companies delivered PBT growth, a record high since 2015. 61% of the respondents remained optimistic about their growth, up by 6 percentage points. The report attributed the better business performance to maturing Chinese market and expanding demand for high-quality products and services. It recognized that China has stepped up IPR protection, and the number of companies that believed China has proper and sound enforcement more than doubled the number in 2013. The R&D environment becomes more attractive, and is regarded as better than global average by 30% of the respondents, twice the number of 2016. 61% of the members to the chamber still view China as one of the top three investment destinations for now and the future.

Surely, there are some concerns from the European businesses in China, such as the transparency of laws and regulations, consistency of law enforcement, market access, and investment restrictions. We will continue to make efforts in investment liberalization and building a world-class stable, transparent, and predictable business environment for foreign investors, including European investors.

As for the new negative list that is coming out soon, it will significantly cut restrictive measures on market access and lift the level of opening-up. The list will be released on the 1st of July as scheduled. Thank you.

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

(All information published in this website is authentic in Chinese. English is provided for reference only. )