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MOFCOM Regular Press Conference (December 10, 2020)

Gao Feng: Members of the press,good afternoon. Welcome to the regular press conference of MOFCOM. I have no announcement to make today and would like to take your questions. The floor is open.

China Business News: With the departure of all members of the Appellate Body of the WTO, what does MOFCOM make of the paralysis of the body?

Gao Feng: Due to the blockage of appointments to the Appellate Body by a certain member, starting from December 11, 2019, the 7-member body, having only one member left, couldn’t hear any cases and broke down. On November 30, 2020, the term of the last member came to an end, making the departure of all the members. The paralysis of the Appellate Body affects the normal functioning of the dispute settlement mechanism of the WTO and the multilateral trading system has taken a heavy blow. China feels sorry about that.

The dispute settlement mechanism is a key pillar of the WTO, playing an important role in maintaining the stability and predictability of the multilateral trading system. China stands firmly by the multilateral trading system and has been working relentlessly to restore the Appellate Body. After it stopped functioning, China joined the EU and other 118 members in tabling a proposal, calling for immediate initiation of the selection of Appellate Body members. At the same time, China submitted a proposal to reform the body with 42 members, including the EU and actively engages in WTO consultations to create conditions for starting the selection process.

China will work with other WTO members to continuously push for early restoration of the Appellate Body to uphold openness, inclusiveness and non-discrimination, among other core values and basic principles of the WTO and defend free trade the rules-based multilateral trading system. Thank you.

21st Century Business Herald: On December 8, China and Singapore announced the launch of follow-up negotiations on the upgrade of the China-Singapore FTA. Could you brief us on China-Singapore trade in recent years? What are the highlights of the upgrade?

Gao Feng: This year marks the 30th anniversary of China-Singapore diplomatic relations. Under the guidance of the leaders of the two countries, China-Singapore economic and trade cooperation has grown fast in recent years. China is Singapore’s largest trading partner. Singapore is China’s biggest source of incremental FDI and key investment destination. Following the outbreak of the pandemic this year, the two sides have carried out in-depth cooperation in healthcare and medical supplies, established a fast-track for the exchange of essential personnel, and jointly kept regional industrial and supply chains steady and open. At present, China-Singapore economic and trade cooperation are recovering steadily on all fronts. This year till October, bilateral trade reached US$ 71.56 billion, up 0.5% year-on-year. China’s direct investment in Singapore grew by nearly 1.3 times, whereas Singapore’s direct investment in China was up 7%. New contractual engineering deals between the two hit US$ 3.75 billion, up 10.6% year-on –year. These speak fully to the great resilience and huge potentials of bilateral cooperation.

The announced follow-up negotiations on FTA upgrade will focus on services and investment and go for the negative list approach to enhance policy transparency of bilateral services and investment, further raise bilateral services and investment liberalization and facilitation to create a better business environment for companies of the two countries and push for economic recovery and development of the two countries and the region.

National Business Daily: Recently, Liu He, Vice Premier of the State Council and head of the Chinese side of the China-EU High-Level Economic and Trade Dialogue (HED), held video talks with Valdis Dombrovskis, Executive Vice President of the European Commission and head of the EU side of the HED. The two sides had constructive exchanges on pushing forward negotiations of the China-EU investment agreement. As the negotiation is heading towards the homestretch, what’s the progress so far? How will the agreement stimulate China-EU economic and trade cooperation?

Gao Feng: A high-quality China-EU investment agreement will offer more opportunities and sound institutional safeguard for Chinese and European businesses in their two-way investment. It will promote liberalization and facilitation of bilateral trade and investment, bring China-EU economic and trade cooperation to a higher level, and lead to new win-win outcomes.

Following the instructions of both sides’ leaders, this year, the two sides have accelerated negotiations through intensive consultations. This week, the two sides are having the 35th round of negotiation, the tenth round held this year. Both sides will focus on addressing the outstanding issues to work towards the goals agreed by our leaders. Thank you.

Shanghai Securities News: China’s consumption figures are rebounding, but the cumulative total retail sale of consumer goods still suffers negative growth. What measures will MOFCOM introduce to boost consumption, particularly in terms of commodity consumption and of service consumption such as catering?

Gao Feng: To further sustain the recovery of consumption, from the end of 2020 to early 2021, MOFCOM will work with relevant authorities and local governments to take a series of consumption-boosting measures regarding developing market system, holding consumption promotion events, and creating a sound environment for consumption.

In boosting commodity consumption, we will focus on increasing the consumption of key items. For instance, we will encourage relevant local governments to optimize automobile purchase restrictions and start new projects to bring automobiles to the countryside and trade in old cars for new ones. We will completely remove limitations on the importation of second-hand vehicles and improve the recycling and reuse of scrap cars. We will also cultivate automobile post-markets for maintenance, repair, insurance, and leasing to complete the circulation of new, used and scrap automobiles. Moreover, we will encourage well-equipped local governments to subsidize the replacement of old household appliances with green, smart, and environment-friendly models. We will also foster a new, “internet plus” model of scrap materials recycling to accelerate the upgrading of domestic appliances and furniture.

In boosting catering consumption, we will urge businesses to introduce high-quality and distinct products that combine both tradition and creativity while following containment protocols. We will instruct businesses to improvise new business models, such as online ordering and contactless delivery, that merges online and offline operations. Meanwhile, we will introduce policies that prohibit food waste, complement the system of standards for thrift and green development, and improve guidelines for the operation and service of this sector, to create a sound environment for catering consumption. Thank you.

Phoenix TV: Rumors have been that a large number of Japanese enterprises are leaving China. Some media, after investigation, revealed recently that this is not true. What’s your comment?

Gao Feng: We have noticed the investigative report you mentioned. A survey on Japanese businesses in China, done by Japan External Trade Organization (JETRO) shows the claim that “a large number of Japanese enterprises are leaving China” is ungrounded.

According to the JETRO survey, from 2015 to 2019, the proportions of Japanese enterprises expanding, maintaining and decreasing their business in China was largely unchanged. The proportion for enterprises decreasing their operations had been relatively small: aside from 2015, when the number reached 8.8%, the digit landed between 5% and 5.4% in 2016-2019. In April this year, JETRO surveyed nearly 3,500 Japanese enterprises in southern China. 91.7% of the participants said they didn’t plan to relocate their business in China, up 6.9 percentage points from February.

The fact is that the majority of Japanese businesses in China have no plan of exiting or evacuating the Chinese market. The new investment of some Japanese enterprises in Japan and Southeast Asian countries are mostly non-homogenous. According to Chinese statistics, of the 29,500 newly established foreign-invested enterprises (FIEs) in China from January to October, 604 were from Japan, with a total paid-in investment of 20.26 billion yuan. Enterprises make market-oriented decisions. China has a massive domestic market, a complete industrial system, abundant human resources, and effective infrastructure. The proposal to “reduce dependency on China” does not conform to market rules, and will not become the basis for enterprises’ investment decisions.

China will further expand opening-up. We will intensify services for FIEs in terms of industrial chain support as well as industrial transformation and upgrading, come up with targeted solutions to real issues faced by FIEs, and create a market-oriented, world-class business environment underpinned by a sound legal framework, under which FIEs can be well-established in China and enjoy win-win outcomes. Thank you.

CRI: This year marks the 50th anniversary of diplomatic relations between China and Chile. Chile was the first South American country to establish diplomatic ties with China and the first Latin American country to sign a free trade agreement with China. What has China-Chile trade and economic cooperation achieved in recent years? What are the potential areas of cooperation between the two countries in the future?

Gao Feng: This year is the 50th anniversary of the establishment of diplomatic relations between China and Chile. Since the establishment of the diplomatic ties, Chile has created many “firsts” among Latin American countries in terms of relationship with China. Chile was the first South American country to establish diplomatic relations with the new China, to sign a bilateral agreement with China on its accession to the WTO, to announce the recognition of China’s full market economy status, and to sign and upgrade the FTA with China.  

In recent years, under the leadership of the two heads of state, China and Chile have given full play to the role of the “Belt and Road” cooperation platform and the engine of the China-Chile FTA, and bilateral economic and trade cooperation has delivered fruitful results. The two sides have actively promoted connectivity and common development. The value of bilateral trade of goods has increased nearly five times compared with the time when the FTA came into effect. Especially since the FTA was upgraded in March 2019, the number of products with mutual tariff exemptions between the two sides has reached 54. The China-Chile FTA represents the highest level of liberalization in China’s trade in goods so far.

China has become Chile's largest trading partner, largest source of imports, largest export destination and largest agricultural export market. Trade between China and Chile exceeded USD 40 billion for two consecutive years in 2018 and 2019. Since the beginning of this year, the two countries have worked together to tackle the epidemic. From January to October, bilateral trade volume increased by 5.1% year-on-year, of which China's imports from Chile grew by 10% against the trend. At the 3rd China International Import Expo, which just ended last month, three Chilean exhibitors reached an intended turnover of $286 million, up 16% year-on-year. In addition, the cooperation between the two sides in the fields of infrastructure, medical care, agriculture, energy and mining has borne rich fruit. So far, Chinese enterprises have signed more than USD 2.5 billion worth of contracted projects in Chile.

China and Chile enjoy strong economic complementarity, good cooperation foundation and great development potential. As it enters a new stage of development, China is actively promoting the formation of a new development paradigm and enhancing the level of opening up to the outside world across the board. China-Chile commercial cooperation faces greater opportunities and broader prospects. China is willing to work with the Chilean side to implement the important consensus reached by the two heads of state, strengthen strategic planning and synergy, and promote all-round practical cooperation so that the mutually beneficial commercial relations between China and Chile can go higher, broader and deeper. Thank you.

Gao Feng: That’s all for today’s press conference. Thank you!

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