Gao Feng: Dear friends from the press, good afternoon. Welcome to the regular press conference of the Ministry of Commerce. Firstly, I have three pieces of information to release to you.

I. China’s Absorption of Foreign Investment in January-April 2019

China’s absorption of foreign investment in January-April 2019 mainly showed the following features:

1. The actual use of foreign capital maintained a stable growth. In January-April, 13,039 foreign invested companies were newly established; the actual use of foreign capital reached 305.24 billion yuan, increasing by 6.4% year on year (equivalent to US$45.14 billion, up 3.5% year on year. The statistics in the fields of banking, securities and insurance were not included, and similarly hereinafter). In April, the actual use of foreign capital reached 62.95 billion yuan, increasing by 6.3% year on year (equivalent to US$9.34 billion, up 2.8% year on year).

2. The absorption of foreign investment of high-tech manufacturing industry and high-tech service industry both showed rapid growth. The actually utilized foreign capital of manufacturing industry reached 94.38 billion yuan, up 11.4% year on year, and that of service industry reached 205.1 billion yuan, up 4.1% year on year. The actually utilized foreign capital of hi-tech industry increased by 43.1% year on year, taking up 28.1% of the total amount. The actually utilized foreign capital of the high-tech manufacturing industry was 33.41 billion yuan, up 12.3% year on year. Among these, the actual use of foreign capital in electronic and communication device manufacturing, and computer and office equipment manufacturing increased by 38.7% and 45.8% respectively year on year. The actually utilized FDI in hi-tech service sector reached 52.48 billion yuan, up 73.4% year on year. Among these, that in information service, R&D and design and scientific achievement transformation service increased by 57.4%, 49.1% and 96.3% respectively year on year.

3. The capital absorption in the central region and in the pilot free trade zones increased steadily. The actually utilized foreign capital in the central region was 22.07 billion yuan, up 4.5% year on year, and that in the western region was 21.16 billion yuan, up 9.6% year on year. The actually utilized foreign capital in the pilot free trade zones increased by 11.8% year on year, taking up 11%.

4. The main investment source countries kept growing. Among the main investment sources, the actual input value from China’s Hong Kong, South Korea, Japan, the US, and Germany increased by 3.9%, 114.1%, 3%, 24.3% and 101.1% respectively year on year. The actual investment amount from the EU increased by 17.7% year on year (including the investment from the free ports).

China’s Outward Investment Cooperation in January-April 2019

In January-April 2019, the domestic investors’ non-financial FDI in 2,608 overseas enterprises in 148 countries and regions amounted to 233.41 billion yuan (equivalent to US$34.64 billion), up 3.3% year on year. In January-April, the turnover of the overseas contracted projects amounted to 302.89 billion yuan (equivalent to US$44.95 billion), up 6.4% year on year, and the total value of the newly signed contracts was 449.11 billion yuan (equivalent to US$66.65 billion), up 15.2% year on year. The number of the labor service personnel dispatched overseas reached 153,000, 25,000 more than that of the same period last year over. At the end of April, the labor service personnel dispatched overseas amounted to 977,000, decreasing by 5,000 over the same period last year.

The outward investment cooperation in January-April maintained its stable and sound development, mainly showing the following features:

1. The investment in the countries along the Belt and Road routes and the cooperation with them were promoted steadily. In the first four months, the new investment amount in 50 countries along the Belt and Road routes reached up to US$4.61 billion, accounting for 13.3% of the total amount over the same period of time. The total value of the newly signed contractual projects in countries along the Belt and Road routes amounted to US$40.43 billion, taking up 60.7% of China’s total value of overseas contractual projects over the same period of time, up 40.2% year on year; the turnover was US$25.15 billion, taking up 56% of the total amount in the same period, up 3.9% year on year.

2. The structure of outward investment continued to be optimized and diversified. In the first four months this year, China’s investment in Asia, Europe, North America and Africa increased by 9.5%, 8.1%, 8.3% and 40.2% respectively, of which direct investment in 16 countries in Central and Eastern Europe increased by 88.8%. The outward investment mainly flew to the leasing and commercial service industry, the manufacturing industry, the information transmission/software and information technology service industry, the wholesale and retail industry, and the construction industry, taking up 25.8%, 19.7%, 11.6%, 8.6% and 7.9% respectively. The outward direct investment flowing to the information transmission/software and information technology service industry, the construction industry and the manufacturing industry increased by 74.3%, 44.7% and 18% respectively. There were no new outward investment projects in the real estate industry, and the sports industry and the entertainment industry.

3. There were many large contractual projects overseas, driving the economic and social development of the host countries and realizing win-win benefits. In January-April, there were 243 newly signed contractual projects overseas reaching the contractual value of over US$50 million, increasing by 29 over the same period of time last year and accounting for 83% of the total value of the newly signed contracts. The newly signed projects overseas were mainly concentrated in the power engineering construction, the transportation construction industry and the general construction industry, jointly accounting for 70% and effectively improving the living standards and infrastructure conditions of the host countries.

In January-April 2019, the relevant departments handled 1573 enterprises that are newly established or mergers and acquisitions(M&A) outward investment, with China’s contractual investment reaching US$30.96 billion. Among these, there were 1568 newly established and M&A non-financial outward investment enterprises, and China’s contractual investment reached US$30.42 billion. Five newly established and M&A financial outward investment enterprises were handled and China’s contractual investment reached US$540 million. The relevant departments handled 4 capital increasing financial outward investment enterprises, and China’s contractual investment reached US$430 million.

Gao Feng: III. Consumption in April 2019

According to the National Bureau of Statistics, the total retail sales of consumer goods reached 3.1 trillion yuan in April, up 7.2% year on year. According to the monitor of MOFCOM, the sales of 5,000 key retail enterprises reached 324 billion yuan, up 2.2% year on year.

China’s consumption market remained stable in April 2019, mainly showing the following features:

First, the online retail sales grew faster. The online retail sales of physical commodities in January-April reached 2.4 trillion yuan, up 22.2% year on year, 1.2 percentage points faster than the growth rate in January-March and accounts for 18.6% of the total retail sales of consumer goods, up 2.2 percentage points over the same period of the previous year.

Second, the service consumption was stable. In April, the national catering revenue was 328.1 billion yuan, up 8.5% year on year. According to China Tourism Academy, the national tourism revenue during the Qingming holiday reached 47.89 billion yuan, up 13.7% year on year. Relevant statistics show that the box office in April increased by 20.2% year on year.

Third, the consumption of daily necessities was strong. In April, the retail sales of daily necessities, traditional Chinese and Western medicine, beverages, grain and oil products above the designated size increased by 12.6%, 11.5%, 9.7%, and 9.3% year on year respectively.

Fourth, the price rose moderately. In April, the residents’ general consumption price rose by 2.5% year on year, and the consumption price in January-April rose by 2.0% accumulatively year on year. Affected by seasonal factors and short-term fluctuations, the prices of pork, vegetables and fruits have risen to a certain extent, driving the prices of edible agricultural products to rise. In April, the prices of edible agricultural products in 36 large and medium-sized cities monitored by the Ministry of Commerce increased by 8.0% year on year. Among these, the prices of pork, vegetables and fruits rose by 18.7%, 15.6% and 14.4% respectively.

In April, the total retail sales of consumer goods reached 3.1 trillion yuan in April, up 7.2% year on year, down 1.5 percentage points from last month, mainly influenced by the holiday. In last April, the public holiday lasted 10 days. In April this year, it lasted 8 days, a decrease of 2 days compared with the same period of last year. This has obvious impact on the consumption growth rate in April, such as the decrease of the consumption of petroleum, household appliances and furniture.

That’s all the information I’d like to share with you. Now I’d like to answer your questions.

Reuters: First, what measures will China take to protect its interests as it cannot retaliate in kind in terms of quantity when the US threatens to increase tariffs on US$300 billion of Chinese goods because China imports less from the US? Second, is there any planned trade negotiation between China and the US in the coming weeks after President Trump suggested he planned to meet President Xi next month? Third, as regards Huawei, what’s China’s response to US banning Huawei from acquiring component and technologies from US firms without government approval?

Gao Feng: With respect to your first question, we’ve noticed that the Office of the USTR issued a notice on May 13 announcing the initiation of procedures to raise tariffs on US$300 billion of Chinese goods. Applying bullyism and maximum pressure runs counter to multilateral trading rules. China strongly opposes such practices. If the US insists on getting its way, China will have to take necessary measures to respond. China never believes that increasing tariffs contributes to solving trade issues. China has never feared any pressure and has confidence, determination and capacity to deal with any risk and challenge.

As for the second question, China has no idea of the US plan to visit to China for a consultation. The two sides had candid and constructive exchanges at the 11th high-level trade talks. However, to our deep regret, the China-US trade talks suffer a serious setback due to unilateral escalation of trade frictions on the US side.

If my understanding is correct, your third question refers the two measures by the US government, right? (Yes.) US President signed an executive order banning US firms from using telecommunications equipment made by companies posing a national security risk. As China has repeatedly stressed, the concept of “national security” should not be abused or used as a tool for trade protectionism. We hope some country respects market principles and creates a fair, transparent and predictable business environment for companies from across the world, including China.

We’ve noticed that on May 15, US Department of Commerce added Huawei along with 70 of its affiliates to the Entity List which is subject to export control in view of national security. Also on May 13, DOC added some Chinese entities on the list of export control. China has always required Chinese firms to strictly abide by laws and regulations relating to export control, fulfill international obligations of export control, respect laws in host countries and commit to compliance in their international business. We firmly oppose unilateral sanctions against Chinese entities by any country according to its domestic law. We stand against generalizing the concept of national security and abusing export control policies. We urge the US to stop making mistakes, create conditions for normal trade and cooperation between Chinese and US companies, and avoid further hurting the bilateral trade ties. China will leave no stone unturned to protect legitimate rights of Chinese enterprises. Thank you.

Phoenix Satellite TV: With respect to the additional tariffs, some analysts point out that there are 20 shipment dates from the announcement to customs enforcement. Do you think the situation will take a turn for the better? Are you optimistic about it?

Gao Feng: China noted that the Office of the USTR and US Customs and Border Protection announced in a notice that tariffs on Chinese goods that left China before zero o’clock on May 10 and enter the US before June 1 will remain at 10%. However, this does not change the fact that US additional tariffs on Chinese goods took effect on May 10.

China always opposes unilateral tariff measures. Raising tariffs only makes consultations more difficult. We urge the US to right the wrongs as early as possible to prevent Chinese and US companies and consumers from greater loss and the world economy from recession. Thank you.

CNR: We noted that after the 11th round of China-US trade consultation, the Chinese side proposed three core concerns: removal of all the additional tariffs, realistic import target and more balanced text of the agreement, which is quite rare. Are these issues the main sticking points for the consultations to continue?

Gao Feng: An agreement will not be reached unless the three key concerns are properly handled. First, all the additional tariffs must be removed. The trade tensions started with the imposition of tariffs, and should be ended with the removal of all the additional tariffs. Second, the import target should be realistic. This was agreed by the two sides in Argentina and should not be subject to arbitrary changes. Third, the text of the agreement must be balanced. Every country has its dignity and the agreement must be balanced to be accepted. China will not make any concession on major issues and will uphold our principles firmly. Thank you.

Hong Kong Commercial Broadcasting: You indicated that the consultation is suffering some setbacks due to the unilateralist measures of the US. How will the Chinese side stay in touch with the US side going forward? It was reported that Vice Premier Liu He walked away from the working dinner in the last round, and made reference to the possibility of leaders’ talk for the future consultation. Is China now planning for the meeting and consultation between the two leaders?

Gao Feng: Regarding the first question, the trade consultation is derailed by the bullyism and maximum pressure from the US. Imposition of tariff will not solve the problem and is firmly opposed by China. We will have to take countermeasures. As for the 11th round of consultation, the report you mentioned is completely inconsistent with the facts. As for other matters, I suggest that you inquire the Ministry of Foreign Affairs. Thank you.

Shenzhen Satellite TV: After the US announced the tariff hike from 10% to 25% on 200 billion dollars worth of Chinese goods starting from May 10th, China announced countermeasures that hike tariffs on some US goods starting from June 1st. Is this date meant to keep a few weeks as a cushion period? It is noted that China didn’t set 25% tariff on all 60 billion dollars of US imports, but classified them into tariffs of 5%, 10%, 20%, and 25%. What is the consideration for that?

Gao Feng: I’d like to stress that China does not want to fight a trade war, but is not afraid of one. In response to the wrong practice of the US side, China will have to take necessary countermeasures. Thank you.

Economic Daily: The executive meeting of the State Council recently made new planning for the improvement and innovation of national-level economic development zones, and set the goal to build them into new commanding height for reform and opening-up. How is the situation of economic development zones in China? How will MOFCOM further advance their development?

Gao Feng: Currently, China has 219 national economic development zones in 31 provinces and municipalities:107 in the east, 63 in Central China, and 49 in the west.

In the past 30 years, the national economic development zones are committed to developing advanced manufacturing and producer services, institutional reform and innovation, internationalization, industrialization, and urbanization, and have become the pacesetter for China’s reform and opening-up and an important driver for regional economic growth. They play a significant role in national economy and social development. In 2018, the 219 zones registered an output of 10.2 trillion yuan, up by 13.9% and taking up 11.3% of the national GDP. Their fiscal revenue was 1.9 trillion yuan, up by 7.7% and taking up 10.6% of the national total. The import and export reached 6.2 trillion yuan, up by 10.8% and taking up 20.3% of the national total. The paid-in investment and reinvestment by FIEs reached USD51.3 billion, up by 5.5% and taking up 20.4% of the national total.

Going forward, following the guidance of the new philosophies on development, MOFCOM will continue to improve business environment, promote innovation, enhance the level of opening-up and industrial upgrading, accelerate innovation in opening-up, technology, and institutions in the national economic development zones, expand opening-up and improve the quality of economic development, and strive to build them into new commanding heights for reform and opening-up. Thank you.

China News Agency: We noted that a lot of research institutes and scholars are calculating the economic losses incurred by the trade war. Does China have concrete evaluation or statistics for the economic and trade losses incurred by the current tariffs? How will China respond to the impact of the tariff hike this time? We noted there are a lot of consumer goods in the list of US goods that will be subject to higher tariffs. Will such countermeasures push up the price of consumer goods on the domestic market?

Gao Feng: The escalated trade tensions between China and the US will have some impact on the two economies and the world economy as well. The impact on the Chinese economy is fully under control. In the second half of last year, we introduced measures to stabilize employment, finance, foreign trade, foreign investment, outbound investment, and expectation, and they are working quite well. We will continue to implement the stabilizing measures to help the businesses overcome difficulties. Currently, domestic consumer price remains stable. We will closely watch the trend and take timely measures when necessary. Thank you.

【Xinhua News Agency】We have noted that some US institutions such as American Soybean Association and USCBC have called to stop further escalation of tariffs. The Association of Equipment Manufacturers also warned that increasing tariffs on Chinese exports would have terrible consequences on manufacturers of the industry, even including cutting over 400,000 jobs in next 10 years. What is China’s comment on that?

We have noted the calls from American industry against tariff increase. Now more and more people have felt the impacts of the tariff hike, which has victimized both American businesses and consumers. This also amply demonstrates that there is no winner in a trade war, and the trade war will jeopardize the interests of China, the US and the world. Thank you.

【CCTV】There have been concerns that American companies in China might become the target of China’s countermeasures to the US tariff hike. How do you comment on that？

Over the past few decades, China has remained one of the most popular markets for foreign investment. The legitimate rights and interests of all companies operating in China will be protected by the Chinese government. China will continue to take forceful measures to create a more stable, fair, transparent and predictable business environment for companies from across the world.

【Bloomberg】The first question, in answering the question from Reuters, you said that if the US continues to impose additional tariffs on remaining Chinese exports, China will have to take countermeasures. What exactly will these measures be? The second question, will China bring the US restrictions on Chinese companies to the WTO? If not, will there be other countermeasures?

I have responded just now that if the US continues to act willfully, China will have to make necessary response. Constantly increasing tariffs does little to solve trade and economic issues. China is never afraid of pressure. We are confident, determined and capable to safeguard China’s core interests and deal with any risks and challenges. With regard to your second question, I have stated China’s stance that we will take any necessary measures to resolutely protect the lawful rights and interests of Chinese companies. Thank you.

【Beijing TV】My question is related to consumption. What is the sales performance of the first Online Shopping Day? What are the good practice and models that have been experimented?

To speed up consumption upgrade and foster a strong domestic market, from April 28 to May 10, MOFCOM, the State Post Bureau, and China Consumers Association held the event of Online Shopping Day with the participation of 10 e-commerce platforms and express delivery companies.

According to relevant data, over 100,000 brands participated in the event, with a sales volume of RMB77 billion. Driven by it, the nationwide online sales of physical products for the same period reached RMB285 billion, a year-on-year increase of 28%. On average, 97.3% of brand products received good comments from consumers. 2.012 billion parcels were delivered during the event period, a year-on-year increase of 28.04%.

In general, there were two highlights of the first Online Shopping Day. First，domestic brands showed outstanding performance. Chinese brands accounted for nearly 70% of the total sales and occupied top three in sales of home appliances, daily consumer goods and food and oil products. Old Chinese brands were extraordinary as some registered over tens of millions of RMB sales. Second, there was a strong demand of quality products. Smart, healthy and green products were most favored by consumers. Smart products accounted for 18.5% of the total sales, whereas healthy products’ total sales amounted to RMB3.2 billion, and green products RMB800 million. Packages of products were more environmentally friendly. Nearly 95% of shipping orders were digital. Efforts have been made to promote the use of recyclable packages.

We have explored some good practice through the event. First, we have unleashed consumption potential by innovating consumption patterns. Through community and friends circle-based group buying and word-of-mouth marketing, a number of e-commerce platforms have increased brands’ influence among young consumers. Second, we have boosted consumption growth by improving consumption experience. E-commerce platforms have strengthened communication, cooperation and interaction with consumers, thus improving their experience of consumption. Some companies adapted relevant products to better cater to the needs of consumers after listening to their opinions. During the event, the sales of 50 kinds of products increased by over tenfold compared with their whole-year average sales. Third, we have enhanced quality control and protection of consumers’ rights and interests. Taking the “Online Shopping Day” as an opportunity, e-commerce platforms have introduced third-party inspection agencies and built a whole-chain tracking system from purchase to sales, conducted on-site and unannounced inspection, so as to further improve the quality control procedures. With more confidence in the quality of the products, many platforms have extended the period of refund and exchange of goods. Fourth, we have offered effective delivery services. Nearly 3 million staff, 270,000 operation sites, 320,000 vehicles and 116 airplanes were mobilized in the postal industry during the Online Shopping Day. Over 90% of orders were successfully delivered to customers at all platforms. The number of complaints in the postal industry dropped by 11% year-on-year, thanks to faster and better postal and delivery services. Thank you.

National Business Daily: We have noticed that recently China submitted the China's Proposal on WTO Reform to the WTO. Could you brief on the background of this document and China’s proposal and position on WTO reform?

Gao Feng: With the rise of unilateralism and protectionism, the authority and efficacy of the multilateral trading system are facing severe challenges. In addition, progress has been slow on some of the WTO negotiations. The operational efficiency of the WTO stands in need of improvement and the transparency of trade policies of its Members awaits to be enhanced. It is against this backdrop that China supports necessary reform of the WTO so as to overcome its current crisis, respond to the developments of the times and uphold the multilateral trading system along with other members.

Based on its position paper on WTO reform in November 2018, China submitted the China's Proposal on WTO Reform to the WTO on May 13, identifying four priorities for concrete actions: First, resolving the crucial and urgent issues threatening the existence of the WTO; Second, increasing WTO's relevance in global economic governance; Third, improving the operational efficiency of the WTO; and Fourth, enhancing the inclusiveness of the multilateral trading system.

China stands ready to further exchange views with other members on the proposal to jointly advance the WTO reform, enhance its authority and efficacy, and increase its relevance in terms of global economic governance. Thank you.

Shanghai Securities News: Apart from trade, has China felt the increasing pressure from the US in other areas? Will China be able to cope with higher US tariffs and other economic pressure? Is China more worried about the recent economic pressure or the long-term influence of China-US trade frictions?

Gao Feng: I want to stress once again that China is firmly against US tariff hike. It is not beneficial for China, the US, nor the entire world. No winner will emerge from a trade war. There is still ample room for China’s macro policies, with many policy tools. We have the confidence and ability to handle any difficulties and challenges. China has a complete economic industrial system and a large market, with strong resilience and huge room for maneuver. The outlook is very bright. Thank you.

International Business Daily: We have noticed that the Brazilian Vice President Mourão is going to visit China and co-chair the fifth meeting of the China-Brazil High Level Coordination and Cooperation Committee with Vice President Wang Qishan. Could you brief on the preparation of the China-Brazil High Level Coordination and Cooperation Committee and the potential outcomes?

Gao Feng: The meeting of China-Brazil High Level Coordination and Cooperation Committee (COSBAN) will be held in Beijing on May 23, 2019, co-chaired by Vice President Wang Qishan, the Chinese chair and Brazilian Vice President Mourão, the Brazilian chair. Both sides will hear the briefings of the sub-committees and exchange views on key issues in their bilateral cooperation.

The China-Brazil High Level Coordination and Cooperation Committee is a dialogue and cooperation mechanism currently at the highest level between Chinese and Brazilian governments, with the key task to coordinate bilateral practical cooperation in different areas. Since its initiation in May 2004, four meetings have been held under COSBAN, which currently has 12 sub-committees, covering politics, economics and trade, finance and economics, science and technologies, agriculture, energy and minerals, aerospace, industry and information, inspection and quarantine, culture, education, health, etc. With the joint efforts of both sides, the preparation for the COSBAN enjoys smooth progress.

China and Brazil enjoy strong economic complementarity and broad prospects for trade and economic cooperation. In recent years, with the joint efforts of both sides, the bilateral trade and economic cooperation has made great strides. In 2018, their bilateral trade exceeded US$ 100 billion for the first time and investment cooperation in different areas keeps expanding. In this context, the visit of Vice President Mourão to China and the COSBAN meeting will be the first major high-level exchange between the two countries since the new Brazilian administration. They will surely play important and positive roles in further deepening practical cooperation between China and Brazil. Thank you.

CNBC: President Trump announced that he will meet with President Xi Jinping during the June G20. Could you confirm that? Is there a specific time when the US Treasury secretary will come to China? Could you confirm what will be discussed?

Gao Feng: As for the first question, I suggest asking the Ministry of Foreign Affairs. As for the second question, China is not informed of the US plan to come to China for negotiations. In the 11th round of China-US economic and trade consultations, as I have already mentioned, the two sides conducted candid and constructive exchanges. However, it is very unfortunate that the US unilaterally escalate the trade frictions, causing serious setbacks to the China-US economic and trade consultations. Thank you.

Gao Feng: Do you have any other questions?

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