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MOFCOM Regular Press Conference (December 3, 2020)

Gao Feng: Friends from the press, good afternoon. Welcome to today’s regular press conference of MOFCOM. First of all, I have an announcement to make.

Gao Feng: The announcement is about China’s services trade from January to October 2020.

China’s trade in services declined since the beginning of this year due to the coronavirus pandemic and other factors, but has already stabilized. Export of services far outweighs import, leading to a smaller trade deficit. Knowledge-intensive services trade accounts for a larger share. From January to October, China’ total service imports and exports reached RMB 3.72578 trillion, down by 16.1%. The features are as follows.'

First, the services trade deficit further decreased. From January to October, China’s service exports amounted to RMB 1,548.95 billion, down 1.8%; imports RMB 2,176.83 billion, down 23.9%. Service exports fell by 22.1 percentage points less than imports, leading to a 51.1% decline in the trade deficit in services to RMB 627.88 billion, a decrease of RMB 656.94 billion.

Second, knowledge-intensive services trade bucked the trend. From January to October, China’s import and export of knowledge-intensive services reached RMB 1.639 trillion, up 8.3%, accounting for 44.0% of the total import and export of services, up 9.9 percentage points. Among them, the export of knowledge-intensive services amounted to RMB 860.94 billion, up 8.2%, accounting for 55.6% of the total export of services, up 5.1 percentage points. The fast-growing areas of exports were intellectual property royalties, insurance services, telecommunications, and computer and information services, with increases of 27.2%, 18.4% and 14.4% respectively. Imports of knowledge-intensive services amounted to RMB 778.09 billion, up 8.4% accounting for 35.7% of total service imports, up 10.7 percentage points. The fast-growing areas of import are financial services, telecommunications, computer and information services, and insurance services, with increases of 35%, 23.4% and 18.6%, respectively.

Third, the import and export of travel services declined significantly. The COVID-19 epidemic caused a serious impact on the worldwide travel services import and export. From January to October, China’s travel services import and export totaled RMB 873.28 billion, down 47.1%, of which exports fell 48.5%, and imports fell 46.9%. Excluding the travel services, in the first ten months, China’s service import and export grew by 2.3%, of which exports grew 4.8%, and imports remained basically unchanged from the same period last year.

Gao Feng: That’s all for the announcement. Now I’d like to take your questions. The floor is open.

Phoenix TV: The Ministry of Commerce announced last Friday that it would impose temporary anti-dumping duties on Australian wine exported to China from November 28. Australia's Trade Minister Birmingham said that this is against the China-Australia FTA and WTO rules. Earlier, Canberra also said that it might seek arbitration at the WTO. What is China's response to this?

Gao Feng: On August 18, 2020, MOFCOM initiated an anti-dumping investigation into the import of wine originating from Australia based on the application of relevant domestic industries, and made a preliminary ruling on November 27, 2020, deciding to implement temporary anti-dumping measures. According to China’s Regulations on Anti-Dumping, under normal circumstances, the implementation period of temporary anti-dumping measures shall not exceed four months from the date of implementation, and can be extended to nine months under special circumstances. The Chinese investigating authority will continue to investigate the case in accordance with legal procedures and make a final determination on the basis of the investigation results to determine the final anti-dumping measures.

In this case, the Ministry of Commerce filed a case and investigated in strict accordance with relevant laws, and took relevant measures to fully protect the legitimate rights of all interested parties. We welcome all stakeholders, including Australia, to continue to participate in the follow-up investigation procedures according to law. Thank you!

South China Morning Post: The Australian Trade Minister said recently that the Australian government still to plan to file a complaint with the WTO over the Chinese government's tariffs on Australian barley, and that it is "up to the Chinese side" to withdraw the anti-dumping measures in the end. What is the response of the Ministry of Commerce on that?

Gao Feng: The antidumping and countervailing case on imported barley originating from Australia was initiated by the Ministry of Commerce of China in accordance with law after receiving applications from relevant domestic industries. In the process of investigation, the investigators have given full protection to the rights of all parties, listened to a wide range of opinions, given all parties adequate opportunities to participate in the investigation, drawn investigation conclusions objectively, fairly and impartially, and taken trade remedy measures accordingly. The case was filed, investigated and decided in accordance with relevant Chinese laws. Thank you!

Nikkei: Regarding the Export Control Law of the People’s Republic of China, some foreign companies producing in China are worried whether they may be required to submit additional information including their intellectual property or trade secrets to the Chinese government when applying for the export of controlled goods as exporters. What is the view of the Ministry of Commerce on the concerns of such foreign enterprises?

Gao Feng: At present, we are actively promoting the legislation of relevant supporting regulations of the Export Control Law, and further improving the control list, which will be released in due course. The previous control list attached to relevant regulations concerning export control is still in effect.

We will carry out export control in strict accordance with laws, based on internationally recognized practices, and effectively protect the legitimate rights and interests of exporters, including the IPR of their products. There is no need for foreign-funded enterprises to worry at all. Thank you!

21st Century China Business Herald: On November 27, China Container Industry Association said that since July, due to the sharp increase in China's export freight volume and export container demand, the shortage of container and soaring freight rates are not uncommon for foreign trade logistics, thus it called on the container enterprises serving the entire industry chain to help keep foreign trade stable. How does the Ministry of Commerce view foreign trade at present? How long can the momentum of foreign trade recovery last? What are the considerations in solving the problems in foreign trade logistics?

Gao Feng: Since the beginning of this year, in response to the severe challenges brought by COVID-19 to the development of foreign trade, according to the decisions and arrangements of the CPC Central Committee, the State Council has successively issued a series of policies and measures to keep foreign trade stable, and China's foreign trade has continued to stabilize and head upwards. China's foreign trade has played an important role in ensuring the stability of the global industrial and supply chain and promoting world economic recovery.

According to the data released by the National Bureau of Statistics, the manufacturing new export order index and import index under China's manufacturing PMI in November were 51.5% and 50.9%, increasing by 0.5 and 0.1 percentage point over the previous month respectively, indicating that both domestic and foreign demands have improved. At the same time, we can see that COVID-19 is still spreading all over the world, the international demand is generally weak, the circulation of industrial chain and supply chain is still clogged at some point, trade protectionism is on the rise, and China's foreign trade still faces many uncertain and unstable factors in its development. We will continue to push forward all work in a practical manner and devote every effort to achieve the goal of promoting stability and improving quality of foreign trade throughout the year.

With regard to foreign trade logistics, due to the impact of COVID-19, many countries in the world are facing similar problems now. The mismatch between supply and demand of transport capacity is the direct cause why freight rates increase, and factors such as poor container turnover indirectly push up shipping costs and reduce logistics efficiency. On the basis of preliminary work, we will work with relevant departments to continue to increase transport capacity, support the acceleration of container return, improve operation efficiency, support container manufacturers to expand production capacity, strengthen market supervision, strive to keep market prices stable, and provide strong logistics support for the steady development of foreign trade. Thank you!

China Business News: Apart from security screening, the EU is also developing legislative measures on foreign subsidies and specific movements on telecommunication, 5G and other sectors, all of which are expected to add to uncertainties to China’s investment in the EU. How would MOFCOM comment on that?

Gao Feng: We have noted the EU and its relevant member states are planning to introduce restrictions on foreign investment.

China holds the belief that maintaining markets open and fostering a sound business environment is necessary for the steady development of global economy. This is particularly true when we are facing the common enemy of COVID-19. Countries should, more than ever, work together to tide over difficulties, avoid creating new barriers for trade and investment or imposing discriminating measures on foreign investors on various grounds.

We hope the EU can abide by the WTO rules and pull in the same direction with China to advance the sound and stable development of two-way investment, which serves the common interests of the two sides and the global economic recovery. Thank you!

Economic Daily: In September, MOFCOM expanded the market procurement trade pilot program by adding another 17 marketplaces. Could you brief us on the progress? What regulatory measures will be adopted to facilitate such pilot program?

Gao Feng: The newly selected 17 marketplaces for the market procurement trade pilot program are now developing the working mechanism and implementation plans, and establishing a comprehensive management system encompassing all market entities and the whole procurement process.

From January to September this year, the exports via market procurement trade in China totaled RMB 509.86 billion, up by 35.5% year on year. Going forward, MOFCOM will work with relevant departments to proceed with the following work. First, we will quicken steps to help new pilot marketplaces to fully implement the facilitating policies tailor-made by relevant departments, including simplified customs declaration and value-added tax exemption. Second, we will encourage experience sharing between the new and old marketplaces under the pilot program to replicate and scale up exemplary practices. Third, we will encourage pilot marketplaces to explore new practices based on local conditions, so as to contribute to a higher level of domestic and international circulations. Thank you!

Shanghai Securities News: A number of reform and innovation outcomes have been produced in Fujian, Zhejiang and other pilot FTZs recently. Could you introduce pilot FTZs’ performance in attracting foreign investment and foreign trade in 2020? What will MOFCOM do to regulate and support pilot FTZs’ reform and innovation?

Gao Feng: Since the beginning of this year, pilot Free Trade Zones have pushed forward with reform and innovation despite the difficulties of the pandemic. Thanks to their relentless efforts, the business environment has improved and market has been invigorated, which has helped stabilize foreign trade and investment. In the first ten months of this year, the imports and exports of the first batch of 18 pilot FTZs stood at RMB 3.8 trillion, accounting for 14.8% of the national total. Zhejiang, Henan and Sichuan pilot FTZs outshined others with growth rates of 80.5%, 52.9% and 38.3% respectively. The foreign investment utilized by these 18 pilot FTZs amounted to RMB 131.01 billion, accounting for 16.4% of the national total. In particular, Hainan, Fujian and Shanghai pilot FTZs registered marked growth of 49.8%, 46.5% and 39.4% respectively.

7 years on, our pilot FTZs have pioneered the efforts in deepening reform across the board and expanding opening-up. A total of 260 reform items have been spread nationwide, hence the benefits of reform and opening-up are shared across the country. Moving forward, MOFCOM will work with relevant departments to follow the instructions by the CPC Central Committee and the State Council to give more autonomy to pilot FTZs to carry out reforms, step up stress tests on opening-up, earnestly implement pilot reforms, and foster more replicable outcomes in institutional innovation. We will advance the high-quality development of pilot FTZs and take the lead in building the new development paradigm. Thank you!

That concludes today’s press conference. Thank you!

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