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Regular Press Conference of the Ministry of Commerce (February 28, 2019)

Gao Feng: Friends from the media, good afternoon. Welcome to the regular press conference of Ministry of Commerce. I have no announcement to make today and am ready to take your questions.

CCTV: What are the specific results of the just concluded seventh round of China-US trade talks and what are the arrangements going forward?

Gao Feng: From February 21st to 24th, Vice Premier Liu He and US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had the seventh round of high-level consultations on China-U.S. trade. Substantial progress has made with respects to technology transfer, IPR protection, non-tariff barriers, service industry, agriculture and foreign exchange rates as parts of the agreement reached by both presidents in Argentina after negotiations conducted on the text of the agreement. I have no more information to disclose on other details of the consultations.

Both sides will follow the instructions of the two leaders to take the next step based on the seventh round of consultations. Thank you.

China Daily: According to China Business Climate Survey Report of AmCham China, against the context of the trade friction, challenges remain for long-term business environment, however, 62% of the survey respondents still see China as a crucial destination of global investment. How does MOFCOM look at such a research result? What measures will be taken to keep improving business environment to attract global investment?

Gao Feng: We noted that AmCham China issued 2019 China Business Climate Survey Report on Feb 26th. “Bright prospects for domestic consumption and a modestly improved investment environment have helped China remain a top investment destination globally”, pointed out by Timothy Stratford, Chairman of AmCham China.

We noted that this survey was conducted between November 13 and December 16, 2018, and was sent to 771 member company representatives, of which 314 completed a significant portion. According to the report, the trend of increased revenue growth that companies have reported since 2015 continued. 69% of the companies surveyed were profitable, another 21% were reportedly breakeven. Service sector companies reported the greatest increase in revenues; the technology sector reported higher China EBIT margins compared with global operations. Members are clear that China remains a top priority for all sectors’ near-term global investment plans as future prospects for at least moderate market growth in priority sectors and the “rise of an increasingly sizeable and affluent middle class” continue to generate optimism for business opportunities. Members also expressed optimism that China’s investment environment will continue to improve. Furthermore, confidence in China’s commitment to further open its markets is at the highest level since members were first asked about it in late 2016. The report also pointed out some challenges confronting some US businesses in China, including a lack of regulatory transparency, higher manufacturing costs, market access restrictions and insufficient protection of IPR.

Foreign chambers of commerce in China including AmCham China are welcome to propose suggestions on upgrading China’s investment environment. China will remain committed to building a more attractive investment environment for foreign investors by unswervingly opening up wider, lifting restrictions on market access, enhancing regulatory transparency, protecting legitimate rights and interests of foreign businesses, addressing legitimate concerns of foreign investors with a better complaints system in place for foreign-funded enterprises.

Economic Information Daily: The State Council agreed to advance the comprehensive pilot program of further opening up the service sector of Beijing municipality and released the plan. What are the features and priority of the plan?

Gao Feng: On January 31st, the State Council issued the Plan for Implementing the Comprehensive Pilot Program of Further Opening up the Service Sector of Beijing Municipality. The priority is to gradually build an inclusive modern services pilot zone aligned with international practices in Beijing. The main features are as follows:

First, in line of Beijing’s strategic position. The plan clarified 9 pilot projects including position Beijing as a political, cultural, international exchange and R&D center, advance Beijing-Tianjin-Hebei integrated growth and the sub-center of Beijing serving as a pilot zone of comprehensive pilot program of further opening up the service sector.

Second, relatively high level of opening up. The plan benchmarked with advanced international rules to promote high-level trade investment liberalization and facilitation policies in service industry and came up with 14 specific measures to open wider in 6 industries including business service, telecommunications and culture.

Third, extensive coverage. The plan drafted nearly 180 pilot projects, relevant arrangements have been made regarding industry openness, development of new business formats, regional coordination and institutional reforms.

Fourth, innovative opening up models. The plan stressed the coordination of domestic and overseas opening up by promoting “open industry + open park”.

Going forward, MOFCOM and the Beijing municipality will step up coordination to implement each and every measure. These pilot projects are ensured to be implemented with accommodating laws and regulations, policy interpretations and enterprise services. Meanwhile we will timely summarize experience and promote the best practices. Thank you.

CNR: The regulation of the European Parliament and of the Council establishing a framework for screening of foreign direct investments into the European Union was passed with landslide support to tighten screening of overseas companies’ acquisitions of telecommunications, AI and others, how does MOFCOM comment on it? Do you think it may dent Chinese investors’ confidence in the European market? How do you project Chinese investment to Europe in 2019?

Gao Feng: We noted that the progress on the FDI screening mechanism introduced by the European Union. On international business and trade, Europe has been a staunch supporter of free trade. We hope the Europe could keep liberalizing and facilitating trade and investment with open and inclusive attitudes to foster an open, transparent and convenient business environment for all investors, including Chinese enterprises. An open environment is not only conducive to the economic growth within the European Union, but also a recipe for global prosperity.

According to Chinese statistics, in 2018, direct investment from Chinese enterprises to the EU reached US$7.82 billion, up 3.3% year on year. We will keep encouraging competitive and well-recognized Chinese enterprises to invest in Europe following market principles and international practices to create more jobs, generate more tax income for host countries and achieve win-win while self-growing. Thank you.

China Business Herald: We noticed that the logistics system building of agricultural products and rural areas jointly promoted by MOFCOM and Agricultural Development Bank has made some progress, could you brief us on the specific existing difficulties in achieving the targets? Are there success stories in the pilot program for standardized cold chain logistics benefiting agricultural produce to be shared with us?

Gao Feng: Recent years have seen an increasingly improving logistics system for agricultural products with a major network taken shape enabling higher logistical efficiency. Meanwhile, difficulties do exist with outstanding problems like unmatched supply and demand information, high attrition rate during transportation, “the first mile” transportation issues, among others.

The pilot project you mentioned is to raise logistical efficiency, reduce attrition and costs. After over two years of explorations, some replicable models have been identified by relevant regions and enterprises. For example, with respect to community delivered whole-journey cold chain logistics, some enterprises set up agricultural product low-temperature cold storage at the location of origin, then delivered to community cold chain working stations by refrigerator wagon after precooling storage. The community working station is equipped with professional commercial cold chain systems to monitor temperature at real time to ensure a whole-journey protection from farm to table.

Going forward, through modernizing cold chain logistics, build and perfect post-produce of agricultural produce service system, we aim to turn agricultural produce into high value-added products right in the fields to benefit farmers by retaining more added value of the value chain.

CBN: Since the dispute settlement body (DSB) of WTO face pending incapacitation due to block on appointments of new members to the Appellate Body, is China ready to take it? What measures will be taken to deal with the stalled disputes?

Gao Feng: Regarding the WTO Appellate Body crisis, last November China and over 40 WTO members including EU jointly submitted two proposals for improving the procedures for conducting appellate reviews of dispute panel findings to address issues including the appointments of new members. Under joint efforts, the General Council of the WTO has initiated informal negotiation procedures.

China will keep engaging in the negotiations constructively with the majority of the WTO members to push for a solution to the Appellate Body crisis, securing its normal operation and the authority and effectiveness of the multilateral trade regime. Meanwhile, China will take stock of the progress in time to respond accordingly. Thank you.

BTV Finance Channel: We noticed the rapid development of E-commerce in rural areas. What is the status quo of the building of a logistics system of agricultural products and rural areas? What is the goal down the road?

Gao Feng: With respects to logistics system building for agricultural products, we focused on streamlining production, supply, and marketing links. Besides stepping up the building of a cold chain logistics system for agricultural products, work on the following areas are prioritized: first, platforms are set up to facilitate connection between producing and marketing. In 2018, MOFCOM, together with local commerce authorities jointly held over 200 activities to make it happen. E-commerce platforms are encouraged to release produce supply and demand information in time to guide the market. Second, connectivity between farmers and businesses is promoted by establishing a long-term mechanism to connect farming and marketing via various ways such as made-to-order agriculture, integrated farming and marketing, equity cooperation between “corporation+ cooperative + rural households” and others. Third, sales channels are expanded for poverty-stricken areas through supply-demand match making meetings, agricultural exhibitions, physical collection of primary produce from fields, setting up specific zones at commonweal agricultural product markets, etc.

As for rural logistics system building you mentioned is a broader concept, which covers optimization of the logistic system between urban and rural areas and within the rural areas. The priority is on bringing industrial goods to the countryside and agricultural goods to urban areas. Comprehensive demonstrative project of e-commerce accessible to the countryside have been promoted as main measures. Till today, over 1,000 county-level E-commerce service centers and logistics distribution centers and over 80,000 village service stations have been put in place, forming a logistics distribution system covering county, township and village levels with over 90% of villages and towns accessible to express deliveries.

In 2019, we will take multiple measures to revitalize urban and rural markets by further optimizing the logistics system of rural areas and agriculture produce, bringing industrial goods to the countryside and agricultural goods to urban areas. Logistics infrastructure of rural business and trade will be further upgraded by restructuring traditional retail sales network, expand functions of rural E-commerce service stations, diversify rural goods and services supply for and raise consumption qualities of rural residents. Logistics efficiency is encouraged to be enhanced by developing chain business and joint distribution with lower costs. Meanwhile, we strive to enable infrastructure for cold chain logistics, enhance standardization level of agricultural goods and accelerate the building of logistics distribution system covering counties, towns and villages responding to the “the first mile” issue and channel industrial goods to the countryside and agricultural goods to urban areas. Thank you.

Sputnik: It’s reportedly that on 25th January 2019, 76 WTO members including China and Russia signed a Joint Statement on Electronic Commerce, confirming the intention to commence WTO negotiations on trade-related aspects of electronic commerce, building on existing WTO agreements and frameworks. What stage has been reached? What roles did China and Russia played during the negotiations? Please brief us on the Sino-Russia E-commerce cooperation climate in 2018.

Gao Feng: Like you said, on 25th January 2019, following an informal meeting of ministers on electronic commerce held in Davos of Switzerland, China, together with 75 other WTO members issued a Joint Statement on Electronic Commerce, confirming the intention to commence WTO negotiations on trade-related aspects of electronic commerce, building on existing WTO agreements and frameworks. As far as I know, parties concerned are discussing relevant arrangements.

As active participants of E-commerce subject under WTO, China and Russia have constructively engaged in relevant discussions and submitted E-commerce related business proposals for multiple times.

China is ready to work with all other WTO members including Russia to push for open, transparent and inclusive negotiations on trade-related E-commerce subjects. We adhere to a development-oriented direction, respect legitimate demands of supervision rights and developing economies and aim to strike a balance between technological advances, business growth and rational public policies. Hopefully results acceptable to all parties will be achieved, adding momentum to multilateral trade regime.

As for Sino-Russia E-commerce cooperation, according to initial Russian statistics, from January to September last year, cross border E-commerce trade volume between China and Russia hit US$3.7 billion, up 23% year on year.

In general, China and Russia have great business cooperation potential to be tapped with a promising future. Going forward, we will exchange more often to better play e-commerce’s role, promote related cooperation by offering more choices for consumers while renew the impetus for improving the economic and trade relations between China and Russia.

Any other questions? If not, this is the end of today’s press conference. Thank you.

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