Gao Feng: Good afternoon, friends from the press. Welcome to the Ministry of Commerce’s regular press conference. Since I don’t have anything in particular to release today, I would like to take your questions instead.
Imastv: Last week, the Mainland held the first meeting of the Economic and Trade Cooperation Committee with Macao and Hong Kong, and signed with them CEPA Agreements on Trade in Goods. Could you talk about this?
Gao Feng: From December 12 to 14, with the Ministry of Commerce as the lead ministry, the Mainland held with the Macao SAR and Hong Kong SAR governments respectively the first meeting of the Economic and Trade Cooperation Committee.
The Economic and Trade Cooperation Committee was established to optimize and upgrade the previous economic and trade mechanisms between the Mainland and Hong Kong and Mainland and Macao. It expands the areas of cooperation between the two sides and enriches the content of the cooperation. It will provide coordination in order to resolve key issues with Hong Kong and Macao on the trade and economic front. In particular, task forces were set up for such aspects as jointly building the Belt and Road, building the Greater Bay Area of Guangdong, Hong Kong and Macao, Hong Kong’s participation in regional economic cooperation, and supporting Macao being the platform for cooperation between China and the Portuguese-speaking countries.
At the meeting, the Mainland agreed with Hong Kong and Macao respectively on 13 and 19 policy measures for mutually-beneficial cooperation. These measures will effectively raise the level of trade and economic cooperation between the two sides and further benefit the industries on both sides.
After the meeting, the Mainland signed with Hong Kong and Macao respectively the CEPA Agreement on Trade in Goods, which, together with the previously signed Agreement on Trade in Services, Agreement on Investment and Agreement on Economic and Technical Cooperation, marked the achievement of the target to upgrade the CEPA as set out in the Thirteenth Five-Year plan. CEPA has become a high quality free trade agreement that is characterized by “one country, two systems”, consistent with the WTO rules and fully covering the trade and economic cooperation between the two sides.
Today is the 19th anniversary of Macao’s return to the motherland. We believe that the aforesaid measures will help advance the moderately diversified and sustainable development of Macao's economy, and promote economic and trade exchanges and cooperation between the two sides in broader areas and at higher levels.
Going forward, we will, as always, support the Hong Kong and Macao SAR governments, give full play to the greatest advantage of “one country, two systems”, seize such major development opportunities as building the Belt and Road and the construction of the Greater Bay Area of Guangdong, Hong Kong and Macao, and play a greater role and achieve greater development in the new journey of China’s reform. Thank you.
CRI: The US side said that China and the United States planned to hold talks in January next year, and that the two sides would have a truce and hold negotiations in broader areas. Is this true? Who will preside over the negotiations on the Chinese side? Is it going to be in Beijing or Washington DC? In addition, what objectives does China want to achieve in this negotiation?
Gao Feng: Indeed there is a plan. Since the meeting between the two Heads of State, the teams on the two sides have maintained very close communication and have held detailed discussions on the topics and arrangements for the negotiations. On the basis of the progress of the negotiations, the two sides will arrange consultations, including meetings and calls, at any time in order to implement the consensus of the Heads of State. Thank you.
Global Times: We understand that China and the United States conducted a call at vice-ministerial level on the trade and economic issues on the December 19. Can the Ministry of Commerce tell us what was specifically discussed?
Gao Feng: During the December 19 phone call, the two sides held earnest discussions on trade balance, IP protection and other issues that are in the common interest and need of both sides. They also exchanged views on the arrangement for negotiations going forward. Thank you.
CNR: US President Trump welcomed China’s suspension of the additional tariffs on US-made cars and said there would be a larger and more comprehensive trade deal to be reached soon. What does the Ministry of Commerce say about this? How is the current consultation between China and the United States going?
Gao Feng: Intensive consultations are under way at the working level between the two sides. We believe that as long as we take care of each other’s concerns, work together and move toward the same direction, we will be able to implement the consensus reached at the meeting of the Heads of State. Thank you.
21st Century Business Herald: The Customs Tariff Commission of the State Council has decided to suspend the additional tariff on automobiles and auto parts from the US under 211 tariff lines for three months from 1 January to 31 March 2019. The USTR has officially postponed the increase of tariff from 10% to 25% on $200 billion-worth of Chinese goods to 2 March 2019. What does it mean for the ongoing China-US trade consultation? Does that signal that the consultation is moving toward a positive direction? Are the two sides able to end the trade war?
Gao Feng: China noted that the USTR has announced that the tariff increase on $200 billion of Chinese imports will be pushed to March 2, 2019. This is welcomed by the Chinese side. China has lowered the tariff on car imports from the US, as a step to implement the agreement of the two sides.
Both sides have taken proactive measures to send positive signals, laying important groundwork for the smooth progress of the consultation. The two sides aim to properly resolve the trade frictions through consultations. Thank you.
Economic Daily: December 16 marks the 40th anniversary of the Sino-US Joint Communiqué of the Establishment of Diplomatic Relations. In the past four decades, trade and economic relations has long been the anchor to the bilateral relations, but some now doubt if that is still true. What is your comment?
Gao Feng: China believes the two major countries have far greater common interests than differences in trade and economic areas. The role of commercial cooperation as an anchor to China-US relations will not change, the win-win nature of our economic ties will not change. In 2017, China and the US had over $580 billion trade in goods and over $120 billion trade in services. The stock of two-way investment was over $230 billion. This year, for all the trade frictions, the demand and potential for bilateral commercial cooperation remains huge. An increasing number of people come to that the China-US economic ties should be brought back to the right track as soon as possible, that its role as the anchor should not be weakened, but strengthened. Thank you.
Xinhua News Agency: Judging from the utilization of FDI this year, we noted that Western China has taken the lead and overtook the PFTZs for many times. What is the reason for that? What measure will MOFCOM take to further open up the western region and foster a new architecture for opening-up across the board?
Gao Feng: The rapid growth of FDI to Western China reflects the greater openness of the region. As the BRI and other national strategies are implemented, Western China is moving from the hinterland to the forefront of opening-up. The western region has implemented the policies of the State Council to attract FDI in real earnest and built up sound momentum. In the first 11 months of this year, the paid-in FDI to Western China grew by 19.9% year on year in dollar terms. By sector, FDI to the high-tech industry grew by 32.1% and FDI to the high-tech manufacturing grew by 86%.
In the next step, we will step up efforts to open up Western China, upgrade the level of openness, support it in integrating into the BRI and building the PFTZs into new high ground for reform and opening up, and encourage FDI to flow to the west, so that we put in place a new architecture of opening-up across the board where the coastal and inland areas are coordinated and the eastern and western regions are connected.
CNR: We’ve noted a drop in both inward FDI and outward FDI of China in November. Could you please brief us on Chinese outbound investment in November? Is the drop attributed to the high level of last year’s baseline? What’s your forecast for the trend of outbound investment this year?
Gao Feng: Monthly investment data fluctuate from time to time. In November last year, China invested USD 21.24 billion in non-financial sectors overseas, some of which were worth a large sum. In November this year, Chinese outbound investment in non-financial sectors reached USD 14.91 billion, down by 29.8% year-on-year but still higher than the previous months since the beginning of this year.
Overall speaking, Chinese outbound investment maintains a stable and orderly development. The volume of the whole year is expected to remains similar to that of last year with a sustained and sound growth. Thank you.
Economic Daily: Recently the Director General for Circulation Industry Development of MOFCOM publicly said that reform and opening up in circulation industry will be moved forward with focus on law-based business environment towards market-oriented reform direction. What will MOFCOM plan to do to build a law-based business environment and circulation reform?
Gao Feng: Deepening circulation industry reform and building a law-based business environment are reform tasks set out by the 19th CPC National Congress. MOFCOM has worked with pertinent departments to push reform and innovation forward by creating new development mechanism of circulation industry, improving the development model of circulation facilities, building law-based business environment, and perfecting circulation management regime, among others.
Going forward, we will collaborate with relevant agencies to move the work further from multiple perspectives. In terms of consumption, we will create a batch of walking streets that boast great environment, high quality goods, good experience, and cultural traditions. In terms of circulation system, we will further optimize the circulation network to enhance efficiency and reduce cost. We hope to promote innovation and high quality development of circulation industry with our efforts and better serve the needs of industrial development and people’s life.
Economic Information Daily: We’ve seen that in November, total retail sales of consumer goods increased by 8.1% year on year, down by 0.5 percentage points from October. What do you make of the consumption data against the backdrop of a series of policies aiming to boost consumption? Going forward, what measures will be taken to further unleash the potential of consumption market?
Gao Feng: I think we can make sense of the fluctuations of consumption stats from several perspectives.
To start with, since the beginning of this year, consumption market has registered steady and relatively fast growth. From January to November, total retail sales of consumer goods grew by 9.1% year on year. In the meantime, the momentum of consumption upgrade is building up and consumption structure is improving. In the first three quarters of this year, services accounted for 50.2% of consumption expenditure, up by 0.5 percentage points from the same period last year.
Second, the growth rate you just mentioned should be nominal growth. The inflation-adjusted real growth in total sales of consumer goods in November is 0.2 percentage points higher than the previous month.
Third, the slowdown in nominal growth is mainly ascribed to declines in auto sales and petroleum products prices. According to the statistics of NBS, these two factors contribute more than 0.7 percentage points to the slowdown.
Generally speaking, after high speed growth for many years, Chinese consumption market has entered a new stage featured in diverse demands and ever-upgrading structure on the basis of an expanding scale. The consumption market maintains a steady momentum and plays a more important role in underpinning economic growth. The trend remains unchanged.
Going forward, we will promote sustained and sound growth in consumption and bring more substantial benefits to consumers by optimizing supply of goods and services, facilitating consumption in urban and rural communities, and improving consumption environment so that consumers have a greater sense of fulfillment.
That’s all for today’s press conference. Thank you.