Gao Feng: Dear members of the press, good morning. Welcome to MOFCOM’s routine press conference. Since I don’t have announcements to make today, we can proceed directly to Q&A. The floor is open.

People's Daily Overseas Edition: The latest version of Special Administrative Measures for the Access of Foreign Investment (Negative List) was published last week. We have already noticed that the number of measures in the national version was reduced from the original 63 to 48. What are the highlights of this version? What impact will it have on the scale of FDI in China? How will MOFCOM implement this list and how was the previous lists implemented? Thank you.

Gao Feng: I have the following observations on the latest version of Special Administrative Measures for the Access of Foreign Investment (Negative List) published this time:

First, more areas have been opened up. The national negative list introduced opening up measures in finance, infrastructure, transportation, culture, automobile, shipping, aircraft, agriculture, energy and resources, reducing restrictive measures by one-fourth. The negative list for FTZs is further conducting stress tests in opening up culture, resources, seed, telecommunications and other areas.

Second, the lists are more transparent and well-regulated. The two negative lists outlined special administrative measures, such as requirements for equity and senior management. As for areas beyond the negative lists, the localities and authorities should not impose restrictions on the access of foreign investment and should create a level-playing field for domestic and foreign investment.

Third, the lists have become more international. The national negative list has been separated from the Catalogue for the Guidance of Industries for Foreign Investment. It is consistent with the expression and style of the negative list for FTZs, making it easier for foreign investors to understand and compare.

Many of the areas being opened up under this negative list are being closely followed by foreign investors for a long time. For example, in manufacturing, the automobile sector will be opened up in phases; in services, foreign equity restrictions on the financial sector will be removed. We believe that the latest negative list will further arouse the enthusiasm of investors around the world to invest in China. We will also increase investment facilitation, improve business environment and implement opening up measures to keep foreign-invested companies an important force driving China’s economic growth and benefiting people of China and the world. Thank you.

China Media Group: My question is about China-US economic relations and trade, which is a key component of the global value chain. Some believe that the US tariff measures not only influence Chinese companies, but will also be a huge blow to foreign companies in China. What is your view on this?

Gao Feng: We have taken note of the relevant voices. China is an important supporter of and participant in economic globalization and global value chain. Many of China’s exports are produced by foreign companies in China. Analysis show that, on the US's so-called list of USD 34 billion in taxable products, about USD 20 billion or 59% are made by foreign-invested enterprises, with American companies representing a significant portion. We can see that the US tariffs are in nature tariffs on companies from China and around the world, including US companies. The US's measures are essentially attacking the global industrial and value chain. Simply put, the US is opening fire on the whole world, and also firing at itself. Thank you.

TASS: In the past two months, the Renminbi exchange rates against the US Dollar continue to drop. Is it related to China’s foreign trade? The US will impose tariffs on some goods on July 6. Is it one of the reasons?

Gao Feng: Regarding the exchange rate of RMB, the People’s Bank of China and other relevant authorities have already given a comprehensive response. Thank you.

Xinhua News Agency: We have noticed that there is some news coverage saying that if China and the US could not reach a trade agreement soon, the US may impose tariffs on USD 500 billion worth of Chinese imports. What is China’s response to that?

Gao Feng: We have noticed that the US have recently threatened to impose tariffs on more than USD 500 billion of goods, or roughly the total amount that the United States imported from China. Not only that, the US also issued similar threats to trade partners from other countries and regions. Such trade bullying, by raising the big stick of tariffs to blackmail others around the world, is against the trend of the times.

China will not bow in the face of threats and blackmail, nor will it waver in its determination of safeguarding global free trade and the multilateral trading system. China will work with countries around the world to firmly oppose backward, obsolete and inefficient protectionism and unilateralism which run against the trend of the times and is committed to safeguarding a stable and predictable global business environment. Thank you.

CBN: Influenced by the current international business environment, will MOFCOM adjust its expectations for the growth of foreign trade this year? What measures will be taken to ensure the stable growth of export in the second half of this year?

Gao Feng: At present, influenced by unilateral and trade protectionist measures of certain country, the stable growth trend of global trade is indeed being challenged to some extent. Although WTO and other international organizations generally predict that global trade will grow by more than 4% this year, they also expressed concerns that the trading environment may worsen.

In this year, China’s foreign trade achieved a stable performance while at the same time securing progress, with structure further optimized, shift of drivers sped up and quality and efficiency further enhanced. In the second half of this year, we will continue to focus on high quality export, striving to improve the quality and facilitate transformation and upgrading. First, we will increase quality and efficiency. We will promote quality export by upgrading export industries and products. Second, we will cultivate new business types and models for the development of foreign trade and step up efforts for the sound development of such models in cross-border e-commerce and market purchasing. Third, we will make the market more diversified, help companies to explore traditional export market and give them more support in exploring the emerging markets. Fourth, we will improve the trade environment, particularly improve trade facilitation.

We believe that, as the supply-side structural reform deepens, China’s foreign trade will maintain a stable and improved momentum all this year. Thank you.

Phoenix Satellite TV: The Trump administration is drafting a bill which, if approved, will allow the White House to raise tariffs at will without the Congress’ permission. Many believe that this is the United States de facto abandoning the WTO rules. What’s China’s comment? Are you worried that such a bill will exacerbate the trade frictions between China and the United States?

Gao Feng: We’ve noted related reports, but we don’t know the exact source of the news. That said, I believe all WTO members and people in the world will stand against any action that runs counter to the MFN and bound tariff principles, that puts domestic law above international law, and that jeopardizes the world economic and trade order. Thank you.

CRI: We know that the United States plans to impose tariffs on USD 34 billion worth goods on July 6th. If that happens, will China levy tariffs on the goods it published before? Once these measures take effect, does it mean the start of the China-US trade war?

Gao Feng: It is the US that starts the trade war. We don’t want a trade war but have to fight if it is necessary for upholding the interest of the country and people. China will absolutely not fire the first shot. However, we have no choice but to strike back if the US imposes tariffs.

What the US is doing is total backpedalling. We believe that people in the world understand and support China, just as the Chinese saying goes, “A just cause enjoys abundant support while an unjust cause finds little support.” We call on all countries to take collective actions in order to firmly oppose trade protectionism and unilateralism and protect the common interest of all people in the world.

China News Service: As you mentioned before, China will take comprehensive quantitative and qualitative measures to strike back. If the China-US trade war breaks out, will the American businesses in China take a hit?

Gao Feng: For decades, China has been one of the most popular destinations of foreign investment in the world thanks to not just the enormous size of the market, but also the stable, rational and rule-based features that China’s market represents. The Chinese government protects the legitimate rights and interests of all companies in China. We will continue to assess potential implications on businesses by the trade war started by the United States and work to cushion the impacts on the business community. Thank you.

Nikkei: One question about the time of tariffs taking effect by the United States and China. The US will start levying tariffs from zero o’clock on July 6th. What is the local time when China implements the tariffs on the same date? If China imposes tariffs at zero o’clock Beijing time, that would mean China moves ahead of the United States in tariff measures. What do you make of it?

Gao Feng: Yesterday our colleague from the national customs tariff committee responded to this question. This trade conflict is stoked by the US. China has repeatedly made solemn statements that China will absolutely not fire the first shot. Having said that, if the United States slaps tariffs on us, China will have to strike back so as to protect the core interest of our country and people. Thank you.

CNR: It is known that China’s trade policy review by the WTO will take place in mid-July. The review is conducted once every two years. What has China done to prepare for the review? How will China respond to the accusations or questions it is likely to face?

Gao Feng: The WTO will examine China’s trade policy for the seventh time from July 11th to 13th. The Chinese delegation will attend relevant TPR meetings. The TPR mechanism is one of the three main functions of the WTO. The review shows that China is deeply committed to implementing its transparency obligations under the WTO.

On June 6th, the WTO Secretariat provided all members with China’s trade policy review report and a policy statement submitted by the Chinese government. The TPR report introduces China’s achievements in macroeconomic and trade/investment policies since the last review in 2016, and fully recognizes the direction of further reform and opening up by China.

By the end of June 28th, we had received more than 1,600 written questions from 33 WTO members over reducing tariffs, expanding access of foreign capital, SOE reform, subsidy policy, excess capacity, IPR protection and others. In accordance with WTO rules, China should respond in writing to these questions before the review meeting commences. We are responding to the questions as scheduled.

At the upcoming meeting, members may raise new concerns, on which the Chinese delegation will exchange opinions with candor. We will fully demonstrate China’s endeavor to honor its accession commitments across the board, its determination to open wider to the world, and its earnest desire to share development opportunities with all WTO members. Thank you.

CCTV: At the recent RCEP Ministerial Meeting in Tokyo, 16 countries including China and Japan issued a joint statement. What’s China’s comment on the progress? What advice and opinions does China have on the progress in the negotiations in the coming months? Is China confident to reach a package outcome before the end of this year?

Gao Feng: RCEP negotiations are moving ahead steadily. Positive progress has been made in market access of goods, services and investment. In terms of rules, parties have wrapped up negotiations on two chapters of economic and technological cooperation and SMEs, and sped up negotiations on other chapters.

According to the statistics of some international agency, by the end of 2017, RCEP represented nearly 48% of global population with over 3.5 billion people, over 31% of global GDP with USD 23.8 trillion, nearly 28% of global trade with the value of USD 10.1 trillion, and 23.6% of global annual investment inflow with USD 800 billion. If concluded, RCEP will greatly spur mutual opening up in the bloc, unleash market potential, promote regional economic integration, and oppose trade protectionism with real actions. China will continue to support the centrality of ASEAN in RCEP negotiations, play a constructive role, and strive for an early conclusion in collaboration with all parties.

That’s all for today’s press conference. Thank you.

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