Gao Feng: Friends from the press, good morning. Welcome to the MOFCOM regular press conference. Since I don’t have any announcement to make today, we can proceed directly to the Q&A. The floor is open.
CRI: German Chancellor Angela Merkel will pay an official visit to China from September 6 to September 7. Could you please talk about China-Germany economic and trade cooperation, particularly in recent years?
Gao Feng: Germany is China’s biggest trading partner in Europe. During President Xi Jinping's successful state visit to Germany in 2014, the two countries announced the establishment of a comprehensive strategic partnership, ushering in a new phase for the development of our economic and trade cooperation. Over the past five years, our bilateral trade has grown steadily with our trade volume in 2018 standing at a record US$183.9 billion, up 9.4% year-on-year. China has been Germany’s largest trading partner for three years in a row and an investment destination most favored by German businesses.
Since the beginning of this year, our economic and trade cooperation has gained steady momentum as shown in our growing two-way trade and investment. From January to July this year, our two-way trade, new German investment in China and new Chinese investment in Germany hit US$106.93 billion, US$1.17 billion and US$1.01 billion, up 2.4%, 62.7% and 27.6% year-on-year respectively. China-Germany cooperation on the Belt and Road Initiative (BRI) has made huge strides. German businesses, such as Siemens and Voith, have started cooperation with Chinese companies in third-party markets. German enterprises also pay great attention to participating in the Second China International Import Expo. By far, over 200 German businesses have signed up for the Expo, topping all European countries in terms of the number of companies and the exhibition area.
Important participants of China’s reform and opening-up, German businesses are engaging in China’s new round of opening-up. For instance, BASF will invest US$10 billion in Guangdong to build a wholly-owned Verbund chemical production complex; Allianz will set up China’s first insurance company to be fully owned by foreign investment; Volkswagen, BMW and other German automobile companies have been increasing their investment in China for stronger cooperation in research and development.
Both China and Germany support economic globalization and an open world economy and firmly uphold multilateralism and free trade. We share vast common interest in multiple areas including governing global economy, safeguarding the multilateral trading system and addressing climate change. We also enjoy huge potential for cooperation in fields such as digital economy, industrial internet, new energy vehicles, artificial intelligence, environmental protection and third-party market cooperation.
During Chancellor Merkel’s visit to China, MOFCOM and the Ministry of Economy and Energy of Germany will hold the roundtable of the China-Germany economic advisory committee with the two heads of government. The committee will soon hold its sixth CEO roundtable. These two roundtables will offer suggestions and insights for deepening China-Germany cooperation in the new era. We are willing to work with Germany to build platforms of exchanges and cooperation for our businesses so as to pursue the steady and sustained development of our practical cooperation in economy and trade. Thank you.
Economic Daily: MOFCOM recently released the list of counties for the comprehensive demonstration of e-commerce in rural areas for the year 2019, which includes 215 counties to be supported. What progress has been achieved since the implementation of the project? What are the features of this year’s work?
Gao Feng: Since the beginning of this year, the comprehensive demonstration of e-commerce in rural areas has focused on the critical battle of poverty alleviation and rural rejuvenation, and progress for this phase has been attained, featured by “one full coverage” and “three first times”.
“One full coverage” means the policies cover all 832 state-level poor counties. As for “three first times”, first, region-wide implementation is introduced for the first time. We support Tibet Autonomous Region to carry out the comprehensive demonstration at the regional level, and MOFCOM, together with relevant authorities, will better allocate resources in terms of marketing, expert consultation and business assistance.
Second, an updated version of comprehensive demonstration is proposed for the first time. We include state-level poor counties that have been supported into the project once again to consolidate the outcomes of previous poverty alleviation effort and to upgrade channels, industries, services, entities and mechanisms.
Third, county examples inspected and motivated by the State Council are covered by the supportive measures for the first time. Ten county examples are directly named as demonstration counties because they have been motivated and commended by the State Council for their remarkable achievements in rural e-commerce, poverty alleviation and production-sales matching.
Starting from 2014, MOFCOM, in collaboration with the Ministry of Finance and the Poverty Reduction Office of the State Council, launched a demonstration program of rural e-commerce， aiming to support the demonstration areas in improving rural e-commerce public services, logistics delivery, and talent training, and building a sound market environment. Up to now, the support has been extended to 1,231 counties, enabling e-commerce to grow from scratch and flourish in rural areas, especially poor areas. In the first half of 2019, the online retail sales in national-level poor counties reached 110.99 billion yuan, up by 29.5%, or 7.1 percentage points higher than the average growth in rural areas. The online retail sales of agri-products stood at 11.64 billion yuan, up by 33.1% year on year. Up to now, there are close to 12 million rural e-commerce operators in China, creating over 30 million jobs.
Going forward, MOFCOM will work with related departments to optimize the top-level design, push for improvement in logistics infrastructure and e-commerce public services in the demonstration areas, promote sharing and connectivity of equipment, facilities and information, and enhance common delivery in rural areas with greater resource integration and more efficient circulation. We will step up cultivation of professionals and market players, and develop a succinct and professional team of rural e-commerce operators; we will move forward in poverty reduction, supply-demand matchmaking and convenient consumption, so as to realize high-quality development of rural e-commerce. Thank you.
South China Morning Post: It was reported that the principals of China-US negotiations had a phone call this morning, confirming that the working teams will hold consultations in real earnest in mid-September and make full preparations for the high-level consultations in early October. Does that indicate any concessions from the two sides to reach a deal? What does China expect of the October consultations in Washington? Have the working teams made any progress or breakthroughs that led the principals to agree to a new round in October? Who will join the Chinese delegation and what will be the agenda?
Gao Feng: The working teams will discuss the details of the arrangement for the 13th round. As for members of the delegation and the agenda, we will keep you updated.
Building on the full preparations of the working teams, the two sides will strive for substantive progress out of the 13th round in October. As for other details, I do not have any more information to share with you. Thank you.
Bloomberg: Is there a clear date for the negotiation in October? Is it likely that the US will postpone the tariffs that were planned to kick in on October 1st, given that the two sides have decided to meet?
Gao Feng: China is firmly opposed to escalating the trade war, as it works against China, against the US, against the whole world. As you have noted, the two sides agreed in the phone call to make joint efforts and take concrete actions to pave the way for the next step.
As for the details of the consultations, we will keep you updated. Thank you.
CNBC: It is reported that President Trump doesn’t want to discuss Huawei with China. Will it have a negative impact on the potential deal? According to people familiar with the situation, President Trump was outraged when China retaliated with tariffs and wanted to double the tariffs, but didn’t go ahead with it in the end. What’s your comment?
Gao Feng: Regarding the first question, we noted the report. China holds a clear position on Huawei being put on the export control entity list, that we hope the US will stop the attempt to cripple Chinese companies with national force and in the name of national security.
As for the second question, I’m not sure about the source of this news and whether it’s accurate. I want to emphasize that the trade war is harmful to China, to the US, and to the entire world, and is thus firmly opposed by China. Thank you.
Phoenix Satellite TV: We’ve noted China’s statement that it calls on the US to eliminate new additional tariffs. The principals of China-US trade negotiation have held a phone call and hoped to create enabling conditions for the consultation. Will the elimination of the additional tariffs become a prerequisite for the next round negotiations?
Gao Feng: The two economic teams have been engaged in close communication. This morning the Principals had a very good conference call and decided on when to hold the next round of negotiation. Both sides agreed that they should join efforts to take concrete actions in order to create enabling conditions for the negotiation.
RTHK: We’ve noticed the report saying preparations will be made for achieving substantive progress in the high-level consultations. Does it include China withdrawing its complaint from the WTO?
Gao Feng: The first additional tariffs of 15% on USD 300 billion worth of Chinese exports to the US took effect on September 1. On September 2, China lodged a complaint to the WTO dispute settlement mechanism. China has not considered withdrawing the case so far.
Let me be clear the US imposing additional tariffs violates free trade rules and undermines the multilateral trading system. Bringing the case to the WTO against the US is a step to uphold China’s legitimate rights and interests and safeguard the multilateral trading system. Thank you.
HKCB: US President Donald Trump linked the China-US trade spat with Hong Kong for many times. In this morning’s telephone call, did the two sides discuss Hong Kong-related issues?
Gao Feng: I have no other information for you about the conversation. Thank you.
Hong Kong News Agency: As the pork price keeps climbing in China, the market expectation is that the price may not fall until next year. Will the purchase of American pork be discussed in the trade talks? Will China consider reducing the tariffs on imported pork?
Gao Feng: We will release detailed information in a timely manner if there is more to come. Thank you.
AFP: It is reported that China will investment USD 280 billion in Iran’s oil, gas and petrochemical sectors. Can you confirm it?
Gao Feng: It’s the first time I’ve heard of it. I’ve noticed that the MFA Spokesman responded to the report yesterday. If you know which companies are involved, I suggest you check with them. Thank you.
NBD: An official in charge of the Department of Foreign Trade of MOFCOM said in a public speech that MOFCOM will work with relevant agencies to develop policies to promote high quality development of auto industry, which will be the first of its kind focusing on a major sector. Can you introduce how the formulation is going and what may be covered by the policies?
Gao Feng: We are doing research and seeking comments from the auto industry and auto companies together with relevant departments. We aim to formulate well-targeted policies and release them in an appropriate time with a view to supporting high quality development of auto trade. Thank you.
Shanghai Securities News: A US company called on the US International Trade Commission to initiate two 337 investigations. It accused Chinese businesses of exporting, importing and selling semiconductor equipment and downstream products that infringe upon its patents. What’s MOFCOM’s comments?
Gao Feng: We’ve noticed the cases. As far as we know, the complaining party makes infringement accusation against 21 businesses and related companies in the world, including four from the mainland of China, four from Taiwan and 13 from the US. Now the cases are under review for initiation. We hope relevant US authorities can conduct the review in accordance with law and treat all parties in a fair and just way so as to properly address the patent dispute among businesses. Thank you.
RTHK: The high-level trade talks were supposed to be held in September. Could you explain why postpone it to October?
Gao Feng: As I introduced, the two teams are engaged in good communication. In mid-September, the working teams will begin serious negotiations to pave the way for making substantive progress in the high-level negotiations. Thank you.
Gao Feng: Any other questions?
If there is no other question, this is the end of the press conference. Thank you.