[Gao Feng]: Dear friends from the press, good afternoon. Welcome to the regular press conference of MOFCOM. First, I have three messages to release today.

I. China’s Absorption of Foreign Investment in January-October 2018.

China’s absorption of foreign investment in January-October in 2018 mainly showed the following features:

1. The actual use of foreign capital remained steady growth.

In January-September, 49,545 foreign invested companies were newly established, up 89.3% year on year; the actual use of foreign capital reached 701.16 billion yuan, up 3.3% year on year (equaling US$107.66 billion, up 6.5% year on year).

In October, 3,623 foreign invested companies were newly established, up 37.6% year on year; the actual use of foreign capital was 64.46 billion yuan, up 7.2% year on year (equaling US$9.7 billion, up 7.3% year on year).

2.The hi-tech industry, especially the hi-tech manufacturing, continued to grow.

In January-October, the actual use of foreign capital in the manufacturing industry was 220.26 billion yuan, up 12.4% year on year. The actual use of foreign capital in the hi-tech industry increased by 11.4% year on year, taking up 22.4%. The actual use of foreign capital in the high-tech manufacturing industry reached 73.78 billion yuan, up 30.6% year on year. Among these, the actual use of foreign capital in electronic and communication device manufacturing, medical equipment and instruments manufacturing, and computers and office equipment manufacturing increased by 34.3%, 153.4% and 130.1% respectively year on year.

3.The absorption of foreign capital in western regions witnessed high growth and the pilot free trade zones kept the leading role.

In January-October, the actual use of foreign capital in western regions was 49.41 billion yuan, up 16.8% year on year. In the pilot free trade zones, 7,844 companies were newly established and the actual use of foreign capital increased by 10.5% year on year, taking up 12.5% of the total. Among these, the actual use of foreign capital in Tianjin and Fujian pilot free trade zones increased by 29.5% and 136.2% respectively.

4.Among major investment sources, South Korea, Japan, the US, Germany and France did well.

In January-October, among the major investment sources, the actual investment from South Korea, Japan, the US, Germany and France increased by 36%, 24%, 4.1%, 175.9%, 31.2% and 19.3% respectively year on year. The actual foreign investment from countries along the Belt and Road routes, the ASEAN and the EU increased by 11.9%, 13% and 15.3% year on year.

II. China’s Outward Investment Cooperation in January-October 2018

In January-October 2018, China’s outward investment cooperation maintained a steady and healthy growth. In the past ten months, domestic investors made non-financial direct investment in 4,905 overseas enterprises across 155 countries and regions, with a total investment amount of US$89.57 billion, up 3.8% year on year. The contractual value of the newly signed projects overseas reached US$168.2 billion. The turnover of these projects reached US$121.67 billion, up 2.5% year on year. 392,000 laborers have been dispatched for foreign labor service and cooperation. By the end of October, the number of all kinds of laborers dispatched overseas had reached 993,000, 19,000 more than that of the same period last year.

In the first ten months of this year, China’s Outward Investment Cooperation mainly showed the following features:

1. The investment cooperation with the countries along the Belt and Road routes was actively promoted. In January-October, the new investment in 55 countries along the Belt and Road routes reached up to US$11.9 billion, increasing by 6.4% year on year. The total value of the newly signed contractual projects in countries along the Belt and Road routes amounted to US$80.91 billion, taking up 48.1% of the total value of China’s overseas contractual projects over the same period of time; the turnover was US$65.33 billion, taking up 53.7% of the total amount in the same period.

2. The structure of outward investment industries was constantly optimized and the irrational investment was effectively restrained. In January-October, the outward investment mainly flew to lease and commercial service industry, manufacturing, mining industry and wholesale and retail industry, taking up 32.6%, 17%, 9.4% and 9.2% respectively. There is no new project in real estate, sports and entertainment areas.

3. There are many newly signed big contractual foreign projects, obviously pulling up the export. In January-October, the value of 573 overseas contractual projects was over US$50 million, adding up to US$142.8 billion, accounting for 84.9% of the total value of the newly signed contracts. The exported goods pulled up by contractual projects amounted to US$14.34 billion, up 15.9% year on year.

In January-October 2018, the relevant administrative departments filed and checked 7,119 overseas investment enterprises, and the amount of China’s contracted foreign investment reached US$107.94 billion. Among these, 7,082 non-financial foreign investment enterprises were filed or checked, and China’s contracted foreign investment reached US$100.7 billion; 37 financial foreign investment enterprises were filed or checked, and China’s contracted foreign investment reached US$7.24 billion.

III. China’s Operation Situation of Consumption Market in October 2018

China’s operation situation of consumption market in October this year remained stable. According to the statistics of the State Statistics Bureau, the total retail sales amount of consumer goods amounted to 3.55 trillion yuan, up 8.6% year on year, slowing down 0.6 percentage points compared with that in September. That from January to October was up 9.2% year on year. The retail sales of 5,000 key enterprises monitored by MOFCOM increased by 4.5% in October year on year, 0.3 percentage points lower than in September, and that from January to October was up 4.5% year on year. China’s consumption market mainly presented the following features:

1. The festive consumption became an obvious driver. During the “Golden Week” of national holiday, the sales of national retail and catering enterprises reached about 1.4 trillion yuan, and average daily sales increased by 9.5% year on year. The Shanghai Shopping Festival started on September 28 and lasted 45 days, with sales up 15.6% year on year. Among these, the growth rate of retail, catering and other services consumption reached 10.7%, 20.6% and 21.6%, respectively, and the sales of mobile phones, home appliances, cosmetics and apparel increased by 34.5%, 23.2%, 17.6% and 12.3% respectively.

2. There were more highlights in services consumption. In October, the revenue of national catering industry reached 400.6 billion yuan, up 8.8% year on year, with its growth rate 0.2 percentage points higher than the goods retails. There were over 730 million tourists during the “Golden Week”, with an increase of 9.4% year on year, and the revenue of domestic tourism reached 599.1 billion yuan, up 9% year on year.

3. The online consumption kept sound growth. According to the National Bureau of Statistics, the online sales of national entity reached 5.4 trillion yuan, up 26.7% year on year from January to October, accounting for 17.5% of the total retailing of social consuming goods, 3.5 percentage points higher than that of the same period last year.

4. The consumption price remained stable in general. The CPI increased by 2.5% year on year in October, the same as that of the last month, up 0.2% month on month. The prices of edible agricultural products from 36 large and medium cities monitored by the MOFCOM were up 0.8% month on month in October. From January to October, the prices of edible agricultural products increased by 1.8% year on year.

Global Times: President Xi Jinping will attend the 26th APEC Economic Leaders’ Meeting, pay a state visit to Papua New Guinea, Brunei and the Philippines and meet with leaders of Pacific island countries that have diplomatic relations with China in Papua New Guinea. Could you brief on China’s business cooperation with these countries?

Gao Feng: President Xi Jinping will pay a state visit to Papua New Guinea, Brunei Darussalam and the Republic of the Philippines from November 15 to 21 and meet with leaders of Pacific island countries that have diplomatic relations with China in Papua New Guinea.

Papua New Guinea is one of China’s key trading partners among Pacific Island countries. In recent years, China’s bilateral economic and trade relations with Papua New Guinea has developed well, as bilateral trade keeps increasing and areas of cooperation gradually expand. In the past five years, the annual average growth of our bilateral trade exceeded 17%. In 2017, the bilateral trade between China and Papua New Guinea reached USD 2.84 billion, a new historical high, with a year-on-year growth of 24.4%. In the first nine months of this year, the bilateral trade reached USD 2.56 billion, up by 31.8%. By the end of September this year, investment of all types by China to Papua New Guinea totaled USD 3.04 billion and the accumulative investment from Papua New Guinea to China was USD 8.33 million. The value of engineering project contracts signed by Chinese companies in Papua New Guinea totaled USD 10.4 billion and the realized turnover was USD 6.27 billion.

Brunei is an important country along the Belt and Road. Economic cooperation and trade are key pillars for the healthy development of our bilateral relations. In recent years, our bilateral mutually-beneficial cooperation has been very effective. In 2017, the bilateral trade between China and Brunei reached USD 1 billion, up by 36.5% year on year. In the first nine months of this year, the bilateral trade reached USD 1.31 billion, up by 88.7%. By the end of September this year, the accumulative paid-in investment from Brunei to China was USD 2.81 billion and investment of all types by China to Brunei totaled USD 2.7 billion. The value of engineering project contracts signed by Chinese companies in Brunei totaled USD 3.12 billion and the realized turnover was USD 2.85 billion.

As for China’s business cooperation with the Philippines, in recent years, under the guidance of the leaders of the two countries, the intergovernmental cooperation mechanism between the two countries has resumed. The cooperation on major projects is making sound progress, with steady and rapid progress for bilateral business ties. At present, China is the largest trading partner of the Philippines. In 2017, the bilateral trade reached USD 51.28 billion, up by 8.5% year on year. In the first nine months of 2018, the bilateral trade reached USD 41.5 billion, up by 12.4% year on year. The two sides have extensive cooperation in transportation infrastructure, industrial park, energy and people’s livelihood. By the end of September 2018, the accumulative paid-in investment from the Philippines to China was USD 3.33 billion and investment of all types by China to the Philippines totaled USD 1.25 billion. The value of engineering project contracts signed by Chinese companies in the Philippines totaled USD 22.87 billion and the realized turnover was USD 16.47 billion. Thank you.

Bloomberg: Recently, there is much coverage stating that Vice-premier Liu He had a call with US Treasury Secretary Mnuchin. Could you confirm that? Could you confirm whether Vice-premier Liu He has told Secretary Mnuchin China’s conditions for resuming the negotiation? There is also some coverage saying that Vice-premier Liu He will pay a visit to the US soon. Could you also confirm that?

Gao Feng: After the leaders of China and the US had a call on November 1, the bilateral high-level contacts on economic and trade issues have resumed. In addition, the teams at the working level are keeping in close touch to earnestly implement the consensus reached by the two leaders. Thank you.

Shanghai Securities News: On November 5, President Xi Jinping stated in his remarks at the opening ceremony of the CIIE that China will expand the China (Shanghai) Pilot Free Trade Zone to include a new section. How about the plan on the new section for Shanghai FTZ formulated by MOFCOM? When will it be published? An executive meeting of the State Council earlier decided that we will complete the Catalogue for the Guidance of Industries for Foreign Investment and Catalogue of Priority Industries for Foreign Investment in Central and Western China. What guidance will MOFCOM offer to the attraction of FDI in Central and Western China?

Gao Feng: As for your first question, President Xi Jinping announced at the first CIIE that China will expand the China (Shanghai) Pilot Free Trade Zone to include a new section. At present, MOFCOM is working with Shanghai on its implementation and studying the specific plans. We are stepping up relevant work and will publish it at an appropriate time.

Regarding your second question, the NDRC and MOFCOM are moving faster with the revision of the two catalogues. We will also invite opinions and suggestions through local governments from foreign invested enterprises, foreign investors and relevant chambers of commerce and associations. Foreign investment will be encouraged to flow into the central and western China in such areas as modern agriculture, ecological progress, advanced manufacturing, smart manufacturing, high and new technologies, and modern services. On top of that, we will leverage the resource and labor advantages of the central and western region to undertake transfer of foreign invested industries, strengthening investment cooperation with BRI countries, and clustering export-oriented industries. We will also encourage border cities to cultivate their own featured industries. Thank you.

Economic Daily: Premier Li Keqiang will start his state visit to Singapore from 12th, sending a message of China further promoting economic integration of East Asia. What specific measures does MOFCOM have in this regard?

Gao Feng: China is committed to promoting economic globalization and regional economic integration. The big trend of economic globalization remains unchanged despite the challenges posed by unilateralism and protectionism to international trade and economic cooperation. China will work together with relevant East Asian countries and economies in the spirit of consultations and contributions for shared benefits to push forward infrastructure connectivity along the Belt and Road, promote trade and investment liberalization and facilitation in the region via plurilateral and bilateral free trade arrangements, further optimize regional industrial chains and value chains. In doing so, we will move economic integration in East Asia forward to achieve opening up, prosperity and development for all in the region. Thank you.

Reuters: I have two questions. Firstly, what does Chinese government make of the upcoming summit between President Trump and President Xi at G20, a platform for cutting a concrete trade deal or a chance paving the way for future discussions to address trade frictions? Is there a possibility that China and the US will not slap new tariffs on each other’s goods early next year? Secondly, recent months has witnessed a slowdown in China’s economy. What impacts does it have on growth in imports? Which kind of imports will suffer the most? Given the possibility of higher tariffs to be imposed next January, has MOFCOM noticed any Chinese companies start stockpiling US goods?

Gao Feng: With respect to your first question about the Trump-Xi summit, I’d like to refer you to Ministry of Foreign Affairs.

As for your second question, Chinese economy has maintained a stable momentum on the whole with positive progress made since the beginning of this year. Main indices remain within a reasonable range. The fundamentals have not changed.

In the first ten months of this year, China’s imports increased by 15.5% year-on-year. Imports grew by 26.3% year-on-year in October alone and by 8.8 percentage points from the previous month. This can be ascribed to the rise in commodities’ price on the international market as well as the increasing domestic demands, especially for high quality goods. The just-concluded first CIIE fully proves the tremendous potential in China’s import market. China sincerely opens up its market to the rest of the world through further facilitating trade so as to share the cake with all countries.

With respect to the impacts of trade frictions between China and the US, as of now, both Chinese and American businesses have fallen under impacts of different degrees. Cooperation brings mutual benefits while conflicts lead to damage to both sides. We still hope to properly handle differences through dialogues and consultations. In doing so, we can create a stable and predictable trading environment for the business communities. Thank you.

Phoenix TV: Mr. Spokesman, recently the US Department of Commerce has decided to impose anti-dumping and countervailing duties on imports of common alloy aluminum sheet from China. It is the first time since 1985 for the US to impose tariffs after self-initiated AD/CVD investigations. What does China make of it?

Gao Feng: On November 28th, 2017, the USDOC initiated AD/CVD investigations over imports of common alloy aluminum sheet from China. It is the first time in 25 years that the US initiated the investigations without applications from the industry. On November 7th, 2018, the USDOC announced its decision. Since the Chinese responding companies have been cooperative, the determined rate is lower than the result of preliminary determination. However, the US neglected the fact of market-oriented operation of Chinese companies in the investigations, and decided to impose duties higher than 45% based on unreasonable practices such as using surrogate country approach.

China has stressed for many times that all WTO members should conscientiously honored their WTO obligations and stop using surrogate country while refrain from using trade remedy measures as a trade protectionism tool. Thank you.

CNR: Have the Singles’ Day online and offline figures come out? Could you brief on the transactions in this year’s e-commerce shopping festival? What are the new features of Chinese consumer markets?

Gao Feng: Let me brief you on the online retailing figures for this year’s Singles’ Day.

According to our big data monitor, China’s online retail sales on the Singles’ Day hit a new high surpassing 300 billion yuan, up by 27% year-on-year,. There are several features of the online retail market this year.

First, more international players have joined in the shopping festival. From November 1st to 11th, the sales of cross-border imports exceeded 30 billion yuan. Japan, the US, Korea, Australia and Germany are the five largest sources of imports. A well-known Chinese e-commerce platform attracts close to 19,000 foreign brands from 75 countries and regions to join in the sales promotions. Meanwhile, more than two million consumers overseas bought nearly three billion yuan worth of goods on Chinese e-commerce platforms.

Second, young consumers and consumers from three and four-tier cities have expanded. New online shoppers are mainly youngsters and residents from the third or fourth tier cities. Young consumers born in the 1980s and 90s account for over 70% of the total, the main driving force behind consumption.

Third, branded goods sales have increased. Consumers tend to buy famous brands. Chinese brands have gained popularity. During the Singles’ Day, among the top ten best-selling brands in terms of sales value, six are from China. In terms of sales volume, eight out of top 10 brands are Chinese. The sales of China Time-honored Brands exceeded 2.8 billion yuan.

Fourth, business models have become more flexible. Aside from traditional e-commerce platforms, social media e-commerce emerged as the new growth area and served customized and diverse consumer demands better.
Fifth, delivery services have further improved. Thanks to broad application of new technologies including big data, smart warehouses, logistics robots and others, logistics efficiency has been further lifted this year. Delivery can be made within hours instead of days with more efficient and precise logistics services.

Sixth, online and offline integration has moved faster. While millions of brick-and-mortar shops have participated in the sales promotions, e-commerce platforms have also expanded their offline business, integrating the online and offline channels of shopping. Thank you.

China Business News: I have two questions about China’s FTA negotiations. First, in interpreting the Protocol to Upgrade China-Singapore Free Trade Agreement (CSFTA), an official from Department of International Trade and Economic Affairs, MOFCOM, mentioned that Singapore would issue a QFB license to a Chinese bank. Could you please tell us which bank will receive the license? Is this the first time for China to incorporate a comprehensive investor-state dispute settlement mechanism into its international negotiations? Does the Upgrade Protocol represent the highest standard for bilateral investment? Second, in his speech at the CIIE which has just been closed, President Xi Jinping said that China would strive for the early conclusion of the Regional Comprehensive Economic Partnership (RCEP) and speed up negotiations on a China-EU investment agreement and a China-Japan-ROK free trade area. Does this mean that these three agreements will be given higher priority and be concluded as soon as possible? Based on current progress, which of the three agreements will be concluded sooner?

Gao Feng: First, about the CSFTA upgrade. After the QFB license is issued as agreed in the Upgrade Protocol, China will become the country with the largest number of QFB licenses in Singapore. Chinese-invested banks with QFB licenses can carry out retail business and are entitled to set up more business venues and to access the ATM network in Singapore. As for which Chinese bank will get the license, we do not know for sure now because we need to wait for Chinese banks to apply to the financial regulatory authority in Singapore.

China and Singapore incorporate a comprehensive investor-state dispute settlement mechanism into the investment section of the Upgrade Protocol to provide adequate channels for rights protection and remedy. The investment section of the CSFTA Upgrade Protocol demonstrates the latest development of China’s international investment treaty practices.

Second, about the talks on the FTAs and the investment agreement. RCEP, China-Japan-ROK FTA and China-EU investment agreements are important components of China’s high-level FTA network.

Since RCEP talks were initiated, two leaders’ summits, 14 ministerial meetings and 24 rounds of talks have been held. We are now speeding up the talks. As for market access for goods, services and investment, we are now negotiating on offers and requests, which is the finishing stretch of the negotiation. Talks on seven sections on rules have been concluded, and talks on three other sections are also nearing conclusion.

Yesterday, a joint statement was passed at the second RCEP leaders’ summit held in Singapore. The statement welcomes the substantive progress made in 2018 and instructs all parties to redouble their efforts to reach a modern, comprehensive, high-quality and mutually-beneficial RCEP agreement at an early date by the end of 2019.

The economic aggregates covered by the RCEP and China-Japan-ROK FTA agreements are the largest among China’s ongoing FTA negotiations. These talks also represent China’s important actions to voluntarily open up its market to the outside world and promote higher-level opening-up. We stand ready to work with relevant countries to speed up negotiations, keep expanding consensus, bridge differences and push for conclusion at an early date.

As for the China-EU investment agreement, the issues covered go far beyond traditional investment agreements because both sides are committed to providing future two-way investment with fair, transparent, predictable and comprehensive institutional guarantee. So far, 19 rounds of formal sessions and 12 inter-sessional meetings have been held. During the 20th China-EU Summit held in July this year, the two sides formally exchanged list offers, ushering the talks into a new stage. After intensive talks, the two sides have reached consensus on many important clauses related to investment liberalization and investment protection and are about to have substantive negotiations on list offers of investment market access. Following the leaders’ instructions, we are confident that we will reach a high-level agreement to the benefit of businesses and people on both sides through working with the EU side to further increase input into the talks and to meet each other hallway on our divergences. Thank you.

This is the end of today’s conference. Thank you.

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