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Regular Press Conference of the Ministry of Commerce (December 12, 2019)

Gao Feng: Dear friends from the press, good afternoon. Welcome to the regular press conference. Since I don’t have announcements to make today, we can proceed directly to Q&A. The floor is open.

Phoenix TV: We have noticed that the WTO Appellate Body came to a standstill on December 10. It is expected that there would be some time before a consensus is reached. What plan will be adopted by China during that time? Will the WTO follow a new arbitration method in the future? How many WTO cases involve China now and will they be influenced?

Gao Feng: During the meeting of the WTO General Council held on December 9, met with opposition of certain member, the draft proposal on the functioning of the Appellate Body by the General Council failed to be passed. Only one member is left in the Appellate Body now and the dispute settlement mechanism is basically paralyzed, which is the heaviest blow against the multilateral trading system since the establishment of the WTO. China wishes to express its regret.

At present, the WTO has 14 cases on appeal being deliberated by the Appellate Body. Apart from the four cases on which an oral hearing has been held, the remaining ten cases would not been able to complete the full appellate procedure. In addition, about a dozen cases are at the panel stage. China does not have any case at the appellate stage at the moment, but has some cases at the panel stage. If the paralysis of the Appellate Body could not be addressed in time, such cases on appeal and at the panel stage would all be influenced.

The normal and effective functioning of the dispute settlement mechanism is vital for safeguarding the stability, authority and effectiveness of the multilateral trading system and a rule-based world trade order. China will continue to firmly safeguard the rule-based multilateral trading system and the efforts of all to resume the functioning of the Appellate Body. In addition, we are also studying the interim plans to handle WTO disputes during the paralysis of the Appellate Body and would offer China’s suggestions at an appropriate time, so as to strive to resume the effective functioning of the dispute settlement mechanism by working with other members.

China Daily: We have noticed that in the first eleven months of this year, the trade between China and Russia already exceeded USD100 billion. What is MOFCOM’s take of the outcomes of China-Russia business cooperation in 2019?

Gao Feng: In this year, under the strategic guidance and support by the leaders of the two countries, the bilateral business cooperation between China and Russia steadily scaled up to a higher level, with quality continued to be improved and the all-dimensional, in-depth and wide-ranging features highlighted.

First, there is hope that the two-way trade will register a new high. At present, China retains its position as the largest trading partner of Russia, while Russia is the tenth largest trading partner of China. According to Chinese statistics, in the first eleven months of this year, the bilateral trade between China and Russia again exceeded USD100 billion to reach USD 100.32 billion, a year-on-year growth of 3.1%. If such growth continues, the annual bilateral trade could exceed USD110 billion, a new historical high. In addition, the bilateral trade structure continues to improve. In the first ten months of this year, the agricultural import by China from Russia increased by 12.4% year-on-year and the export of automobile to Russia by 66.4%. Agriculture, trade in services, new and high tech products and other new growth areas in trade keep emerge. The two sides are also formulating a roadmap for the high-quality growth of trade in goods and services till 2024, making sure that the target of USD 200 billion in trade would be achieved.

Second, the cooperation with Russia is effective concerning “going global” and the major strategic projects. In the first ten months of this year, China’s FDI in Russia grew by 10.7% year-on-year, with newly-signed contracts of engineering projects worth USD 15.38 billion, five times that of last year. A number of automobile, manufacturing and e-commerce projects invested by Chinese-invested companies in Russia started operations. In terms of major strategic projects, the China-Russia east-route natural gas pipeline was launched early this month; Chinese companies took a stake in the Arctic LNG 2 project; the closures of Tongjiang railway bridge and Heihe highway bridge were completed within the year and the construction of supporting entry and exit ports is on the way. The two sides are setting up a joint science and technology innovation fund and the cooperation on nuclear energy, aviation, aerospace, satellite navigation, information technology and other areas enjoy smooth progress.

Third, local cooperation has been deepened, with practical results. This year is the final year of the years of China-Russia local cooperation and exchange. The two sides are actively implementing the Plan on China-Russia Cooperation and Development in the Russian Far East and a Development Plan for Agriculture in Northeast China and the Russian Far East and Baikal Regions and making full use of major exhibitions, such as the second China International Import Expo, the sixth China-Russia Expo, Russian Eastern Economic Forum and St. Petersburg International Economic Forum, as platforms for deepening cooperation between the localities and companies of the two countries. The demands and potential of bilateral cooperation keep being unleashed. At present, China continues to be a major trading partner and the largest source country of foreign capital for the Russian Far East.

Fourth, keep improving institutional coordination. The Agreement on trade and economic cooperation between the Eurasian Economic Union (EAEU) and the People’s Republic of China (PRC) came into force in October this year. The economic and trade, customs and inspection and quarantine authorities of both countries have been working closely to improve the level of bilateral trade and investment facilitation. The China-Russia business cooperation is shifting towards the dual drivers of projects and institution. The two sides have maintained close communication and coordination within the WTO, BRICS, the SCO and other multilateral frameworks to support and safeguard the multilateral trading system and help build an open world economy.

As determined by the leaders of the two countries, the China-Russia year of scientific and technological innovation would take place from 2020 to 2021. Taking this opportunity, while focusing on the target of USD 200 billion in trade, we will keep advancing practical cooperation in all areas between China and Russia, build closer China-Russia business ties at higher levels and constantly enrich the China-Russia comprehensive strategic partnership of coordination for a new era. Thank you.

Bloomberg: When does China expect to reach the phase one deal? Does China hope the US will postpone the tariffs to be imposed on December 15th? Does China aim to reduce tariff rates or eliminate tariffs in phases in the negotiations? How will China respond if the additional tariffs take effect on December 15th?

Gao Feng: The two economic teams are engaged in close communication. So far I have no more details on the trade negotiations to share with you. Thank you.

Global Times: On December 11th 18 years ago, China joined the WTO. What are the impacts of China’s accession to the WTO on Chinese economy and the world economy at large?

Gao Feng: This year marks 18th anniversary of China’s accession to the WTO. China’s membership has benefited both the country and the world. 18 years on, Chinese economy moved fast forward and increasingly integrated with the world economy driven by opening up. Meanwhile, a developing China brings more opportunities for the world economy and serves as a major driver and stabilizer of global economy. China is the largest contributor to global growth. Since China joined the WTO, global trade has rose from USD 12.6 trillion in 2001 to USD 39.34 trillion in 2018, to which China has made tremendous contributions.

Today, the multilateral trading system is at a critical juncture. China stands ready to work with other members to continue to uphold the rules-based multilateral trading system and its core values, play a constructive role, and support the WTO in necessary reform. China will make new contributions to the stability and growth of the world economy. Thank you.

South China Morning Post: Last week, China announced tariff exemption of US soybeans, pork and other products. Is there any new progress in this regard?

Gao Feng: As far as I know, the customs tariff commission of the State Council is working in an orderly manner on the exemption based on the applications of relevant companies. Thank you.

Shanghai Securities News: In the foreign trade statistics released in November, we’ve noted a year-on-year increase in import for the first time in eight months. Mr. Spokesman, what has contributed to the import growth?

Gao Feng: In general, China’s import demand has been stable since the beginning of this year. From January to November, China’s import value totaled RMB 12.95 trillion, the same as last year. Import in November reached RMB 1.29 trillion, up by 2.5% year on year. Domestic demand is the driver of such growth. First, domestic demand for imported consumer goods remains strong. In the first eleven months, imports of cosmetics and skin care products increased by 38.4%, electric cars up by 109%, apparel 12.1%, and pharmaceuticals 26%. Second, the PMI returned to the expansion zone in November. Demand for such goods as raw materials has rebounded. Some commodities imports have gone up. Imports of iron ore, crude oil, coal, natural gas and cooper have increased by 5.2%, 6.7%, 5.4%, 3.8% and 5.8% year on year respectively.

We will continue to expand import, open the market further wider, enhance the level of trade facilitation, and provide more and better choices for producers and consumers. Thank you.

Xinhua News Agency: The Guideline on Promoting High-Quality Development of Trade noted that China will gradually increase the proportion of trade with FTA partners, emerging markets and fellow developing countries and expand trade with neighboring countries. How will MOFCOM implement the requirements?

Gao Feng: Market diversification is always a direction of China’s foreign trade development. According to Chinese customs, trade with emerging markets accounted for 57.7% of China’s total imports and exports in 2018, up by six percentage points from 51.7% in 2009.

Emerging markets and developing countries including BRI-related ones boast tremendous growth space and market potential. We will let market and business play the key role in expanding trade with those markets and countries. We will focus on the following work related to facilitation.

First, we will create a more favorable and convenient rules-based environment for businesses. We will bring down the overall tariff level and further promote trade and investment liberalization and facilitation through expediting the development of free trade zones and negotiating high-standard free trade agreements with more countries. Second, we will better protect trade and investment of business. We will strengthen the role of inter-governmental commercial cooperation mechanisms and establish trade-related working groups with more countries that are interested to enhance communication and cooperation and create an enabling trade environment. Third, we will improve public services including trade promotion. We will update market information such as country-specific investment climate and guidelines on outbound investment cooperation in a timely manner. We will support industry organizations and trade promoting agencies in setting up platforms to help businesses participate in trade promoting events at home and abroad. Fourth, we will encourage development of new forms and models of trade. We will leverage cross-border e-commerce and market purchasing, among others, to boost imports and exports and encourage companies to reinforce their international market networks. Thank you.

Gao Feng: Any other question? If not, this is the end of today’s press conference. Thank you.



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