[Gao Feng]: Dear friends from the press, good morning. Welcome to today’s special press conference of the Ministry of Commerce. The theme of today’s conference is stabilizing foreign trade, stabilizing foreign investment and promoting consumption. We are glad to invite Director of the Comprehensive Department of MOFCOM Mr. Chu Shijia, Director of the Department of Foreign Investment Administration Mr. Tang Wenhong, Deputy Director of the Department of Market Operation and Consumption Promotion Mr. Wang Bin, Deputy Director of the Department of Foreign Trade Administration Ms. Zhu Yong. I am Gao Feng, the host of today’s press conference, Deputy Director of the General Office and spokesperson. First, Mr. Chu Shijia will introduce the main situation and operation in the commercial field this year. Then the 4 spokespersons would like to answer the questions of your concerns. Now I will give the floor to Mr. Chu Shijia.

[Chu Shijia]: Dear friends from the press, good morning. Since the beginning of this year, facing the complicated domestic and international situation, the Ministry of Commerce followed the guidance of the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implemented the spirit of the Central Economic Work Conference and the deployment of the government work report, ensured the requirements of the “6 stabilities”, and further advanced the stable foreign trade, stable foreign investment and consumption promotion. Main indicators are kept within an appropriate range, showing a good development trend of achieving generally stable growth while making further progress.

First, the consumption of residents grew steadily. From January to May, the total retail sales of consumer goods reached 16.1 trillion yuan, an increase of 8.1%, 0.1 percentage points faster than that of January-April. Urban consumption showed strong momentum. During the May Day holiday, the customer flow and turnover of the first 11 pedestrian streets throughout the country increased by 19% and 28% respectively. Festivals remarkably promoted consumption. The “Online Brand and Quality Shopping Festival” saw the online retail sales of 77 billion yuan in 13 days, up 32%. The national tourism revenue of the Spring Festival, the May Day and the Dragon Boat Festival holidays increased by 8.2%, 16.1% and 8.6% respectively. The proportion of online shopping has increased. The online retail sales of physical goods increased by 21.7%, accounting for 18.9% of the total retail sales of consumer goods, up 2.3 percentage points. The daily consumer goods showed a good growing trend. The growth rate of daily necessities, food and beverage consumption exceeded 10%. In May, car consumption increased by 2.1%, the first growth since April 2018. Rural consumption has grown rapidly. The retail sales of rural consumer goods increased by 8.9%, 0.9 percentage points faster than that of urban consumer goods.

Second, foreign trade achieved stable growth with quality improved. From January to May, the imports and exports of goods reached 12.1 trillion yuan, up 4.1%, of which the exports reached 6.5 trillion yuan, up 6.1% and the imports reached 5.6 trillion yuan, up 1.8%. The surplus was 893.4 billion yuan, up 45%. Diversification achieved remarkable results. The imports and exports to the markets except the US increased by 6.2%, and the imports and exports with the two major trading partners EU and ASEAN increased by 11.7% and 9.4% respectively. The proportion of imports and exports with countries along the “Belt and Road” routes increased to 28.8%. Private enterprises became the driving force. The exports of private enterprises increased by 14%, 7.9 percentage points faster than the overall exports, accounting for 50.5%. The exports of high-tech, high-quality, and high value-added products have grown rapidly. The exports of integrated circuits, metal processing machine tools, blade electric buses and wind turbines increased by 25.1%, 25%, 1.6 times and 2.7 times respectively. The regional structure was more balanced. The exports of the central and western regions increased by 14.7%, accounting for 17.6%, up 1.3 percentage points. The proportion of general trade increased. The exports of general trade increased by 10.3%, accounting for 58.8%, up 2.2 percentage points. Trade in services grew steadily. From January to April, China's imports and exports of trade in services reached 1,744.6 billion yuan, up 4.1%. The export growth was faster than the import growth, and the deficit dropped.

Third, the use of foreign capital remained steady and upward. In January-May, the actual use of foreign capital was 369.1 billion yuan, with an increase of 6.8%. The growth rate was 5.5 percentage points faster than that of the same period last year, 0.3 percentage points faster than the first quarter. Multinational companies were optimistic about the Chinese market. Germany, South Korea, Japan, the UK, and the US increased their investment in China by 100.8%, 88.1%, 18.9%, 9.2%, and 7.5% respectively. The EU's investment in China increased by 29.5%. Large projects grew rapidly. There were 605 big FDI projects above US$50 million, either newly established or additional contractual. . , with an increase of 45.4%. ExxonMobil, BASF, Johnson Controls, ProLogis, Hershey and other companies set up companies in China or expand investment. The structure of foreign capital continued to be optimized, and the use of foreign capital in high-tech manufacturing increased by 23.2%, accounting for 11.3%. The high-tech service industry grew by 68.9%, accounting for 17.2%. The effect of attracting funds through the open platform was obvious. In January-May, the use of foreign capital in the Pilot Free Trade Zone increased by 7.4%, accounting for 11.9%. The proportion of foreign capital utilized by national economic development zones accounts for one-fifth of the national total.

Fourth, the foreign investment cooperation developed orderly. In January-May, FDI reached US$47.2 billion with the scale slightly reduced and the structure continuously optimized. It grew faster in Africa and Europe, and increased by 19.6% and 19.8% respectively. It mainly flew to the rental and business services, manufacturing, wholesale and retail industries, and the total accounted for 52%. Among these the flow to the manufacturing industry was US$8.3 billion, with an increase of 16.1%. The overseas contracted projects were basically stable, with a turnover of US$55.5 billion, concentrating in industries such as transportation, construction, and electric power.

In general, China's business development was stable and structurally optimized this year. This fully proves that the judgment for economic situation of the CPC Central Committee with Comrade Xi Jinping as the core is completely correct. The CPC Central Committee's leadership over economic work is strong. In particular, since the beginning of this year, China’s reforms have continued to be deepened, the door to opening up has become wider and the business environment has become more perfect. China promulgated the Foreign Investment Law, further reduced the negative list of foreign investment access in the national version and the pilot free trade zone version, continued to improve the level of trade and investment facilitation, and introduced a series of tax reduction and fee reduction policy measures. All of these have provided strong support for stabilizing foreign trade and investment and promoting consumption. Next, guided by President Xi Jinping’ Thought on Socialism with Chinese Characteristics for a New Era, in accordance with the requirements of the "6 stabilities", MOFCOM will do everything possible to stabilize foreign trade and investment, push forward consumption, advance the formation of a strong domestic market, and promote all-round opening up. We will promote the building of a strong economic and trade country, accelerate the development of high-quality business, and greet the 70th anniversary of the founding of the People’s Republic of China with outstanding results. Thank you all.

[Gao Feng]: Thank you for the introduction of Director-general Chu Shijia. Next, we will come to the Q&A session. Please ask the questions regarding the theme of today’s press conference. As always, please notify us the of the name of your agency before asking the questions.

CNR: What are the impacts of the year-long China-US trade friction on China’s foreign trade and foreign investment? What’s MOFCOM’s comment on the opinion that the industrial chain is shifted out of China due to such friction? Thank you.

Chu Shijia: Since last year, the world economy has slowed down and protectionism and unilateralism has been on the rise. In the face of complex international trade and economic climate and the daunting task of domestic reform and development, the CPC Central Committee has asked us to make a good effort to maintain stability in six areas. In accordance with the arrangement by the CPC Central Committee and the State Council, MOFCOM spares no efforts to stabilize foreign trade and foreign investment. It is worth mentioning that we do so not just to respond to China-US trade friction. Trade friction between China and the US is not a basket which every problem and challenge should be put in. We should look beyond the challenges posed by the trade dispute for auspicious factors and opportunities in domestic and global economic contexts. Stabilizing foreign trade and foreign investment is about taking full account of international trade and economic context and domestic realistic conditions and seeking stable development in foreign trade and foreign investment in a bid to make more contributions to the sustained and sound growth of Chinese economy.

Although the China-US trade friction has affected to some extent China’s foreign trade and FDI, the impacts are generally controllable. In 2018, China’s foreign trade withstood the pressure and hit a new record high, and its FDI inflow bucked the trend despite international investment flow sliding notably. It is fair to say that our mission last year was accomplished. Since the beginning of this year, China’s foreign trade and FDI have maintained s steady growth on last year’s large base. In May, export and inward FDI grew still faster than the previous four months, which means a stable momentum in trade and investment and speaks volume about the great resilience of China’s economy. Overall speaking, the basis and conditions for sustained and stable growth in foreign trade and foreign investment are in place. We are able to maintain steady growth in the present and future as always. First, as a series of policy measures to maintain stable foreign trade and foreign investment gradually bear fruits, companies have seen better conditions for development and stronger competitiveness. This year witnesses growth instead of decrease in the number of foreign trade companies. In the first five months this year, 33 companies have reported import and export activities, up by 6.6% year-on-year. Second, new progress has been made in market diversification. China does trade with 232 countries and regions. Since the beginning of this year, China’s trade with the EU, Japan, Brazil, Russia, South Africa and other major economies has grown. Third, companies have become more resilient. In the early stage of trade friction, some companies had certain worries and concerns. After a year-long effort to cope with the situation actively, they have found more solutions to and confidence in responding to the situation by lowering cost, increasing R&D input, and diversifying market. They are confident in minimizing the adverse impacts.

With respect to the industrial chain, it is shifting and evolving along with the changes in international division of labor and global industrial landscape. Therefore, it is a normal phenomenon to see industrial chain coming and going in the market economy. On the one hand, the scientific and technological advance and greater opening up in China have driven the shaping of new domestic industrial chains such as 5G industry and the integration of foreign industrial chains like Tesla. On the other hand, companies choose to go global or move to regions with a lower comprehensive cost in order to seek greater development. Indeed, a small number of companies have to move out of China because of the trade row between China and the US. However, it is an exaggeration to directly link moving out with the trade dispute since there are many other contributing factors. The complete industrial sectors, fully-fledged infrastructure, 170 million highly-educated or skilled talents, and a gigantic market with 1.4 billion consumers, among which 400 million are middle class, have given China a comprehensive advantage in the industrial chain. Therefore, no country can replace China. On top of that, China’s industrial chain keeps improving thanks to the emergence of new industries. The recent survey by Amcham Shanghai showed that over 80% of US companies have a positive view of their business in China in the next five years. China’s position in the global industrial chain also reflects its comparative advantages, a natural result of global division of labor and economic law. Only by respecting the development law of the international industrial chain can we achieve win-win development.

Going forward, we will follow through the decision and arrangement by the CPC Central Committee on further opening up to keep improving the business environment, create enabling conditions for foreign investors in China and scale new heights. Thank you.

CNR: Just now DG Chu introduced a lot of measures to stabilize foreign investment including foreign investment law and opening up wider. Could you introduce the concrete measures and the effects? Thank you.

Tang Wenhong: Over the past few years, global FDI flow has been quite weak. According to the recent UNCTAD report, cross-border FDI slid to 1.3 trillion dollars in 2018, the lowest point since the financial crisis, from 1.9 trillion dollars in 2015, registering a third consecutive decline. The big challenge in attracting foreign investment confronts all countries in the world. Attaching great importance to FDI utilization, the CPC Central Committee and the State Council have made a series of big moves in recent years. The 19th CPC National Congress charters the course for using foreign investment in the new era by shaping a new landscape of opening up in all respect and adopting high-level investment liberalization and facilitation policies. Since 2017, the State Council has successively promulgated three documents on facilitating FDI growth, putting in place a policy system for FDI utilization in the new era. MOFCOM firmly follows through the decision and arrangement of the CPC Central Committee. We have put forth and advanced the action plan on promoting FDI growth. Since the beginning of this year, we have been working on six aspects. First, we have continued to promote investment liberalization. In the past six years, we revised the foreign investment negative list five times. The day before yesterday, we published the latest national and FTZ negative lists on access of foreign investment, further liberalizing agriculture, mining, manufacturing and services and downsizing restrictive measures from 190 items six years ago to 40 items for national list and 37 for FTZ list. We are taking stock of measures restricting the access of foreign investment outside of the negative list in a bid to ensure access of foreign investment that is not prohibited. Second, we have promoted investment facilitation. Efforts have been made to narrow down the scope of review and approval for FIEs and delegate review authority. In the first six months, over 30 FIEs were established through review and approval, accounting for only 0.16%. Two years ago, the review and approval system for the establishment and change of FIEs was shifted to record filing. On the basis of that and according to the Foreign Investment Law, MOFCOM will set up an information report system and provide greater facilitation for investment. The system will enter into force on January 1 next year.

Third, we have strengthened investment protection. The newly-adopted Foreign Investment Law lends stronger legal support to foreign investment. MOFCOM is implementing the opening-up measures announced by President Xi Jinping at the G20 Summit in real earnest, and working on the implementing rules and regulations of the Foreign Investment Law. We have improved the mechanism for FIEs to lodge complaints, and built efficient platforms to safeguard their legitimate interests. We are also overhauling the existing laws, regulations, and normative documents by abolishing and revising those that are not compliant with the Foreign Investment Law, so that the Law will be successfully implemented on January 1st 2020.

Fourth, we have kept on promoting investment. The 2019 version of the Catalogue of Encouraged Foreign Investment Industries was published just the day before, promoting more foreign investment into modern agriculture, advanced manufacturing, high technologies, energy conservation and environmental protection, and modern services, etc. We have worked to enhance service system for foreign investors and the investment promotion system, and guided the mentality shift of subnational governments to better attract foreign investment. The 2 trillion yuan tax and fee cuts nationwide are also a boon to FIEs. We have continued to follow and serve major foreign-invested projects. In the first six months of this year, major projects above USD50 million of contractual value grew by 45.4%, with sound quality and concentrated in advanced manufacturing and modern services.

Fifth, we have kept on optimizing investment configuration. We have pushed for greater autonomy of the PFTZs in exploring reforms, submitted to the State Council for approval and published the fifth group of 18 reform practices in the pilot zones to be replicated nationwide, bringing the number of replicable practices to 171 and driving investment improvement nationwide. The comprehensive pilot program of service sector opening-up in Beijing has entered into a new stage on all fronts. Central and western parts of China are better positioned to take over some industries. In the first five months, western China utilized more foreign investment than other regions, up by 25.2%; central and eastern China also kept the sound momentum of foreign investment utilization, up by 5.2% and 5.5%.

Sixth, we have kept on upgrading investment platforms. We have submitted to the State Council and published, upon approval, the opinions on advancing innovation in national-level economic development zones and building new highland for reform and opening-up, with the focus on innovation in opening-up, in science and technology, and in institutional-building, and on improved external cooperation and economic quality. MOFCOM will continue studies into the industrial clusters in national-level economic development zones, facilitate commercialization of research findings, carry out performance evaluation, step up category-specific guidance, deepen international cooperation, foster regional co-development, and guide the construction of international industrial parks.

Thanks to efforts of all, China has bucked the downward trend in cross-border investment and maintained sound momentum for foreign investment utilization. Such momentum was continued in the first five months, up by 6.8% year on year. Going forward, MOFCOM will implement the opening-up measures announced by President Xi Jinping at the G20 Summit, act on the plan to promote foreign investment, as required by the central government, and build a world-class business environment for foreign investors. Thank you.

Xinhua News Agency: DG Zhu, the measures to stabilize foreign trade have worked well amid external uncertainties. But this year the external environment may have a greater and deeper impact on foreign trade. What measures will be taken to further stabilize foreign trade? Thank you.

Zhu Yong: Just now DG Chu noted that the external environment will have greater and deeper impact on foreign trade. Many people are interested in the measures MOFCOM will take to stabilize foreign trade. This year, external environment has changed profoundly, with growing risks and uncertainties to global trade and economy. We noted that the WTO has revised downward its projection for global trade growth 2019 from 3.7% to 2.6%, the lowest in the past three years.

Amid such severe and complex external environment, we are fully committed to a rules-based, world-class and convenient business environment, and foreign trade in the first five months kept a sound momentum, with steady growth and improved quality. I’d like to add to what DG Chu has said that by horizontal comparison, China has outperformed most of the other 66 major economies in the first quarter according to WTO statistics. I’d like to stress that China has always been alert to risks and good at identifying opportunities from risks when it comes to foreign trade. We will resolutely run our affairs well regardless of external changes. Our own affairs are to pursue greater opening-up, to advance supply-side structural reforms, and to promote high-quality development of foreign trade.

Our market entities are highly vibrant. In the first five months, the number of companies with real import and export grew. In 2018, we had a total of 470,000 importers and exporters, old and new. In the past four decades, they have withstood rains and storms and managed to emerge stronger in foreign trade. In our research, we learned that many of them are accelerating innovation and transformation, and the pace to build industrial chains globally. They have always stayed at the forefront and pursued survival and development through fostering comprehensive advantages. There are many highlights in the export of high-tech, high-quality and high value-added products. In the first five months, the export of new energy vehicles grew by 78.5%, and its average price grew by 50.4%, over five times that of traditional vehicles. The export of medical equipment grew by 18%, and machine bed, by 24.3%.

Businesses are the main players on the market, while the role of the government is to introduce policy measures to create a sound business environment for innovation and business growth. You noted that lots of measures have been developed, and asked what other measures will be taken. I think we have introduced many effective policy measures, we are drafting many practical measures, and we will continue to adopt targeted measures, such as tax and fee cuts on a large scale, which will help lower cost for importers and exporters and other market entities; we will push for the conclusion of FTAs with more countries and regions, enhance trade facilitation, and create a sound business environment. As you know, we have signed 17 FTAs with 25 trading partners. In 2018, they took up 35.5% of our total export, and 36.2% in the first five months of this year. In 2018, they took up 37.7% of China’s total import and export, and 37.9% in the first five months of this year. This fully speaks to the effect of the policies.

Our efforts to make improvements in the above-mentioned five areas aim to support companies in innovation-driven development with higher quality. We have fostered 375 national bases for foreign trade transformation and upgrading and a new batch of bases will be developed this year to support corporate innovation-driven development by leveraging the strengths of industrial clusters. We will be committed to facilitating companies to attend and organize exhibitions overseas. We have initiated the export of second-hand vehicles this year. Moving forward, we will improve the supportive policy system for new business forms in foreign trade, certify the national level public platform for international marketing services, support companies engaged in processing trade to move to central and western parts of China, and carry out new business forms including bonded repair and maintenance business and remanufacturing of processing trade.

Just now DDG Chu mentioned inward and outward industrial transfer. I’d like to add one point. We may see a few labor-intensive industries transferred outward. In fact, at the same time our companies are improving their industrial structures globally, as a number of new tech-intensive and high value-added industries in areas of processing, manufacturing, production and services are transferring into China, such as aviation maintenance, ship maintenance, medical equipment maintenance, and wind power facilities maintenance. This would facilitate the highly integrated development of manufacturing and service industry. Maintenance and remanufacturing are both high value-added and tech-intensive that would boost the quality development of foreign trade. There are also such new business forms familiar to us as cross-border e-commerce, market procurement, and comprehensive services of foreign trade. For these new business forms, including bonded repair and maintenance business and remanufacturing, the job of our government is to unleash corporate vitality, identify their development bottlenecks, and strengthen innovation-based administration and regulation, so as to better play the role as a major market player.

We will work conscientiously to explore diversified markets and optimize the structure of international markets with enterprises as the core. We will also take the initiative to expand imports, further cut tariffs and lower the institutional costs of importation. We will make utmost efforts to hold the second China International Import Expo. We will establish another group of national level innovation demonstration zones for import promotion, and enhance regulatory and service innovation.

With strong resilience and a robust engine for long-term development, our large volume of foreign trade is supported by the well-established domestic industrial chain, the massive domestic market, the diversified international markets, the sufficient capacity for self-driven development of market players, and the continuous optimization of structure. We are convinced that our joint efforts in stabilizing scale, improving quality and shifting drivers would be paid off this year. Thank you.

China Daily: A series of measures to promote consumption have been introduced this year. How does MOFCOM comment on the current state of consumption? What measures will MOFCOM take to further advance the steady growth of consumption?

We have a general observation on the current state of consumption. Since the beginning of this year, faced by complex domestic and international environments, our consumption market has been operating steadily thanks to the measures and policies put forward by the government. The “stability” of the consumption market is reflected in the following five aspects.

First, steady growth. The total retail sales of consumer goods in May grew by 8.6%, 1.4 percentage points higher than April. The first five months of this year registered a year-on-year increase of 8.1%, and such trend is expected to continue into June. Our optimistic forecast is a growth rate of 8.2% for total retail sales in the first half of this year, which will remain in the medium-high growth range. Such growth rate is achieved amidst the increasingly complex international environment of economy and trade, and based on the already high volume base of RMB40 trillion. China’s consumption still outgrows most countries in the world.

Second, steady online consumption. The total online retail sales of physical commodities grew by 21.7% year-on-year in the first five months of this year, accounting for 18.9% of the total retail sales of consumer goods, which is 2.3 percentage points higher than the same period of the previous year.

Third, steady basic consumption. In the first five months, the total retail sales of basic consumer goods such as daily necessities, food, and drinks by units above the designated size have all registered double-digit growth. Daily necessities increased by 14.5%, food 10.5%, and drinks 10.1%, up by 2.7, 1.3, 1.2 percentage points respectively from the same period of the previous year. Rigid consumption demand of residents has kept rising fast, which reflects the general solid fundamentals of the consumption market.

Fourth, steady service consumption. The revenues of the catering industry increased by 9.3% in the first five months of this year, which is 1.3 percentage points higher than the growth rate of total retail sales. The revenues of tourism grew relatively fast during holidays like the Spring Festival, the May Day holiday, and the Dragon Boat Festival, rising by 8.2%, 16.1% and 8.6% respectively.

Fifth, steady consumption prices. From January to May, CPI increased by 2.2% year-on-year. Prices of fruits, vegetables went up, but now have fallen steadily as seasonal fruits and vegetables have come to the market. The rise of prices has been generally modest.

Meanwhile, there’s been a decline in the consumption market as a whole. The total retail sales slid by 1.4 percentage points compared to the same period of last year, whereas car retail sales by units above the designated size were down by 2%, dragging down the growth of total retail sales by around 1 percentage point. The retail sales of fuels dropped by 7.9% compared to the same period of last year. Home appliances, furniture, and building materials fell by 3.2, 3.8 and 4.1 percentage points respectively.

To respond to the changes of the consumption market, China has put in place a number of measures to cut fees and tax, and expand opening up. NDRC, MOFCOM and other relevant departments have promulgated the “Implementation Plan of Optimizing Supply for Steady Growth of Consumption and a Strong Domestic Market” and the “Implementation Plan of Promoting Renewal and Upgrading of Key Consumer Goods and Facilitating Recycling of Resources”. A series of policies and measures of consumption promotion targeting cars, home appliances, among other key products have been carried out across the country. With these policies starting to pay off, car sales turned around in June, as reflected by markets.

Moving forward, we will closely follow and assess the effects of our policies according to the changes of the consumption market, and if needed, work with relevant departments to devise polices and measures to further promote consumption.

In general, China is a huge market with 1.4 billion people and 400 million middle-income citizens. We still have space to further upgrade consumption. With various new forms and models of consumption and business emerging, our consumption market enjoys a huge potential, strong resilience and vitality. In spite of certain risks and challenges facing the development of the consumption market, under the firm leadership of the Central Committee of the CPC and the State Council, policies and measures are put in place in a timely manner and are playing positive roles. We believe that the fundamentals of the sound development of the consumption market will not change, the general momentum of improving and upgrading consumption will not change, and the long-term positive trend of consumption growth will not change.

As for the policy measures moving forward, this is the 2nd year of MOFCOM’s implementation of the action plan of the CPC Central and the State Council to cultivate a robust domestic market and upgrade consumption. In May, MOFCOM held an off-site meeting in Shanghai on promoting consumption upgrade to deploy for the priorities of 2019. For the next steps, we’ll focus on four areas.

First, to improve urban- rural market system. In cities, we’ll address commercial facility upgrade, make over pedestrian streets, foster hub cities as international consumption centers and promote branded, franchised and smart convenience stores. In the countryside, we’ll deepen the comprehensive demonstration for the introduction of e-commerce for greater coverage and utility. The postal service and banks will be guided to co-build and share rural networks with e-commerce operators. Agricultural cold storage chain and logistics will be promoted to continually strengthen the rural-urban circulation system for farm produce for the two-way movement of industrial goods to the countryside and agricultural products to cities.

Second, to smooth circulation channels for agricultural products. We’ll promote circulation innovation, optimize and upgrade 100-billion-yuan commodities trading markets, run special operations for efficient rural-urban delivery, cultivate a batch of online + offline digital business companies and modern supply chain service providers to guide digital, networked and smart business development and further enhance logistics efficiency.

Third, to better the quality of goods and services. We’ll upgrade goods supplies and foster new growth spots of consumption. No effort will be spared to ensure the success of the 2nd CIIE to enrich domestic supplies. We’ll expand the sales of emerging electronics like 5G and 4K resolution, smart home appliances and quality living, and green food; stabilize car consumption, encourage the scrap of old cars, and invigorate the trading of used cars; speed up the creation of urban-rural convenience service centers, and follow through on the opinion to expand and upgrade domestic service to fill in the gaps of service supply.

Fourth, to optimize the business environment. We’ll perfect the supporting regulations of the E-commerce Law and put in place a norm for credit record assessment of e-commerce companies. Centered on credit management, the blacklist system and linked incentive-penalty mechanism will be improved. The traceability system for key products will be further promoted to better meet people’s aspirations for a better life. Thank you.

China News Service: The Executive Meeting of the State Council set forth to diversify imports and exports and give businesses the lead to explore diversified international markets. What measures will MOFCOM take to help the businesses advance the cause?

Zhu Yong: Looking back on the history of China’s foreign trade development, the market diversification drive started in the 1990s has come a long way. At present, China has 232 trading partners in goods, many of which are important trading partners to China and also the other way round. The percentage of Chinese exports to emerging markets rose from 40.1% in 2000 to 57.7% last year. In a short space of five years, the share of Belt and Road countries increased by 2.4 percentage points to 27.4% and further to 28.8% from Jan. to May this year.

Recently, the Executive Meeting of the State Council points out that to diversify international markets with the businesses in the lead can help stabilize trade while improving its quality and steadying the economy. In the new historical period, a new dimension to market diversification is to push for open-up of a higher level and optimize international layout for development of better quality with business playing a leading role. MOFCOM will work with related departments and localities on three areas:

First, to unleash initiative by creating a better international environment for businesses. We’ll firmly uphold the multilateral trading system and accelerate the development of FTZs. So far, we’ve concluded 17 FTAs with 25 countries and regions and are pushing for more high-standard FTAs and RTAs with more countries while guiding businesses to take advantage of preferential policies. For example, the 3% MFN tariff on soybean imports is exempted for FTA partners like ASEAN, Chile, Peru and Pakistan to further diversify imports. In addition, we have set up working groups on unimpeded trade with Thailand, Saudi Arabia, Romania, Hungary and Kenya to be followed by more. A rapid response mechanism will be established to concretely address issues in bilateral trade, tap economic and trade potentials and seek cooperation opportunities. For instance, the China-Thailand Working Group has set up platforms for industry cooperation and help companies from Shandong engage with Thailand in agricultural trade and agricultural machinery cooperation.

Second, to continue institutional and management innovation for companies’ high quality development. Let me give an old example and a new one. Exhibitions are an effective way to explore markets, enabling many companies to grow from zero to big. We’ll guide industries and localities to better serve businesses at international premium and brand shows for their stronger growth. We’ll also work from the supply side to continuously improve the policy system for new business types, such as cross-border e-commerce, and facilitate business effort to improve international marketing networks. By far, companies from 35 CBEC comprehensive pilot zones have set up thousands of overseas warehouses. We’ve also established e-commerce cooperation mechanisms with Italy and other 17 countries.

Third, to provide better and easier public services to companies for mutual benefit and win win. There’s huge room for more intensive work in this area, such as greater publicity overseas and timely release of market and policy information. For example, easier customs clearance, further cuts in tariffs, accelerated market access and expanded imports of quality specialties cannot only meet domestic demand for consumption upgrade, but also promote trade balance. The China-Europe Freight Train connecting 108 cities of 16 countries saw return service more than double in 2018, which now accounts for 42% and offers fast access for quality specialties of Belt and Road countries to the Chinese market. Las year, Kazakh rapeseed meal, alfalfa, corn, barley, beef and lamb, Uzbek cherries, mung beans and Kyrgyz sweet melons were exported to China for the first time to a warm welcome from Chinese business.

CBN: What are the key features of China’s economic and trade cooperation with Belt and Road countries this year? How have they changed? What’s the future direction? Thank you.

Chu Shijia: Economic and trade cooperation is a key component of the Belt and Road. This year, we’ve conscientiously followed the spirit of President Xi Jinping’s major speeches at the meeting marking the 5th anniversary of BRI development and the 2nd Belt and Forum for International Cooperation and pursued the principle of wide consultation, joint development and shared benefits to push BRI economic and trade cooperation to go deeper and wider with six characteristics.

First, improved cooperation mechanisms. The BRI circle of friends keeps growing. As of the end of Jun, over 160 countries and international organizations had signed more than 190 cooperation documents. We have continuously improved economic and trade cooperation mechanisms. This year saw the creation of yet more working groups on unimpeded trade and investment cooperation, which are effective mechanisms for the targeted addressing of bilateral trade and economic issues between China and related countries. So far, 11 such working groups have been established. We’ve also set up bilateral e-commerce cooperation mechanisms with 18 countries to provide institutional assurances for Silk Road e-commerce.

Second, significant roles played as cooperation platforms. MOFCOM held two successful breakout sessions for trade connectivity and overseas trade and economic cooperation zones during the second Belt and Road Forum for International Cooperation. At the two breakout sessions, MOFCOM and relevant foreign authorities introduced measures to push for trade connectivity and jointly build overseas trade and economic cooperation zones, which people responded with great enthusiasm. The second China International Import Expo attracted businesses with a broad participation. Built on the foundation of China-ASEAN Exposition, China-Arab States Expo, we have successfully held the first China-Africa Economic and Trade Expo in 2019. China-CEEC Expo & International Consumer Goods Fair has been elevated to state-level in 2019, which vigorously facilitated relevant “Belt and Road” countries to further tap into the Chinese market. By the end of May, the number of China-Europe block train exceeded 16,000, reaching a great number of cities in 16 foreign countries. I would like to inform you that in the beginning of running China-Europe block train, we had more outbound than inbound demands. Now, we have seen a significant change, as the inbound block train grows rapidly, it has basically reached a balance. For some routes, take the Yu’Xin’Ou Railway (Chongqing-Xinjiang-Europe Railway) for example, the inbound outperforms the outbound. The New International Land-Sea Trade Corridor has gathered more momentum this year—Chongqing and other 8 provinces and regions have signed an agreement to jointly build the Land-Sea corridor.

Third, the commercial activities keep expanding. From January to May, the import and export of trade in goods between China and the countries along “Belt and Road” exceeded US$ 500 billion, up 3.2% year on year. Among these, China’s export to the countries along the routes grew 2.9% year on year; the import from the countries alongside grew 3.5% year on year. The growth rate of imports grew faster than that of the exports. Cargo trade volume with countries along “Belt and Road” accounts for 28.8% of the total amount over the same period, up 1.4 percentage points compared with the end of last year.

Fourth, bilateral investment goes deeper. From January to May, China’s direct investment to “Belt and Road” countries hit US$5.74 billion, or 12.2% of the total volume in the same period. The complete turnover of foreign contractual projects in the countries along the routes was US$30.57 billion, or 55.1% of the total volume in the same period. Nearly 2,000 enterprises are newly built by countries along the “Belt and Road” in China, an increase of 35.8% year on year with an investment of US$2.7 billion.

Fifth, major projects get steady promotion. China-Laos, China-Thail and Mombasa-Nairobi railways exhibit stronger demonstration effects by helping relevant countries bolster areas of weakness, improve development conditions and accelerate their industrialization process, which won acclaim of local governments and residents. In the Overseas Economic and Trade Cooperation Zones along the countries of the Belt and Road, an accumulated over US$30 billion had been invested, roughly US$2.7 billion tax paid to host countries and over 300,000 jobs created for local people.

Sixth, accelerate the building of Free Trade Zones. China and Pakistan have concluded the FTA phase-Ⅱ negotiations and signed the protocol, entering a critical stage for the negotiations of a Regional Comprehensive Economic Partnership. Currently, both parties are having close consultations to push for an early conclusion of the negotiation. China, Japan and Republic of Korea agree to accelerate negotiations on regional free trade deals. In addition, China is actively promoting free trade agreements with “Belt and Road” countries including Israel, Palestine and Moldova and started joint feasibility research on FTA with Mongolia and other countries.

Going forward, we will work tirelessly to fulfill what we have achieved in economic and trade fields during the second Belt and Road Forum for International Cooperation and implement new measures of reform and opening up. We aim to realize win-win by promoting high-quality development of Belt and Road economic and trade cooperation. Thank you.

Gao Feng: In the interest of time, last two questions please.

Shanghai Securities News: Since the beginning of 2019, the price of pork, fruits and vegetables has seen rises. How is the market supply for now? Next, what measures would be taken to assure the supply of daily necessities?

Wang Bin: For a while, we have seen price rises for pork, fruits, vegetables and other daily necessities, which has drawn wide attention. Recently, rising temperatures bring an abundance of seasonal vegetables and fruits to the market, as a result, the prices of fruits and vegetables are going down and the price of pork has slowed its growth rate. According to MOFCOM monitoring, last week, the average wholesale price of 30 kinds of vegetables of 36 large and medium-sized cities nationwide down by 3.7%, 11.9% respectively compared with the beginning of June and May. The average wholesale price of 6 monitored fruits shrank 0.2% compared with last week and the range of price increase of pork down by 3.3 percentage points compared with last week.

Compared with industrial goods, the production and circulation of agricultural products more subject to production cycles, epidemic, weather, natural disasters and other factors with challenges of multiple risks. The price rise in the past couple of days was partly contributed by normal market fluctuations, for example, significant production drop for main producing areas of apples and pears due to bad weather, sustained rainy days in spring affected vegetable production in the south. There are also non-market factors, for example, the African Swine Flu epidemic contributed to a dropped production of live pig.

Given such conditions, governments at all levels have attached great importance by firmly holding the market principles and applying targeted measures. What I want to stress is that though we have seen a round of price rise of fruits, vegetables and pork, the market supply is assured. You know, the price rise of agricultural products, on the one hand, affects urban dwellers, in particular the low-income group’s consumption, adding anxiety to some consumers; on the other hand, we should also see that a proper price rise could motivate people to improve agricultural production, and play a positive role in increasing market supply and stabilizing market prices.

Next, firmly upholding the people-centered philosophy of development, MOFCOM will continue to enhance market monitoring, guide the localities to better match production and sales, open up circulation channels for agricultural products, improve cold chain logistics and promote the building of community vegetable markets, convenience stores and other retail outlets. MOFCOM will cooperate with agricultural departments to contain the African Swine Flu epidemic, fully use domestic and international markets and resources to balance the domestic market. All these measures are to effectively guarantee the market supply of daily necessities, such as pork, fruits and vegetables. Thank you.

Economic Daily: I would like to know how is the preparation going on for the new batch of free trade pilot zones? How is the progress for the plan on the exploration of building a free trade port in Hainan?

Tang Wenhong: I can give you a brief answer. Last Friday, at the G20 summit, president Xi Jinping announced a series of opening up measures by declaring that six new free trade pilot zones will be set up, and a new area of the Shanghai Free Trade Zone will be added. Related works are getting vigorously promoted and I will get back to you soon with further update.

As for the exploration of building a free trade port in Hainan, in accordance with the requirements of Guiding Opinions of the CPC Central Committee and the State Council on Supporting Hainan in Comprehensively Deepening Reform and Opening Up, MOFCOM is drawing strength from international free trade ports in terms of business practices and management approaches and exploring more flexible policy system, supervision models and management regime on domestic and foreign trade, investment and financing, finance and taxation, financial innovation, exit and entry, among others. Other related works are also undergoing progress. The Hainan free trade port, as a new high ground of reform and opening up, will feature Chinese characteristics and serve Hainan’s development position. As a result, Hainan will open up to the world at a higher level. It will be more business-friendly. Its experience will have a stronger and more extensive influence throughout the country. The policy framework is under studies and is worth expecting. Thank you.

Gao Feng: That’s all for today’s press conference. I want to thank the four speakers and all journalists here today. Thank you!

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