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MOFCOM Regular Press Conference (December 9, 2021)

Gao Feng: Friends from the press, good afternoon. Welcome to the MOFCOM regular press conference. Since I have no announcement to make today, we can proceed directly to the Q&A session.

The floor is open.

The Paper: Recently, 67 WTO members, including China, the European Union and the United States, successfully completed the negotiations on the Joint Statement Initiative (JSI) on domestic regulation for services, and the relevant negotiation outcomes will be incorporated into the existing multilateral commitments of the parties. In MOFCOM’s view, what is the significance of this negotiation? How will the schedule of specific commitments be formulated in the next step? How to complete the relevant approval procedures?

Gao Feng: The domestic regulation for services is the first issue to achieve major breakthrough under the negotiation model of Joint Statement Initiative since the establishment of the WTO. The achievement of the negotiation outcomes will help revitalize the negotiation function of the WTO and promote further liberalization and facilitation of global service trade.

The relevant rules of domestic regulation for services aim at streamlining the approval process of relevant service licenses, enhancing the transparency and convenience of government regulation, reducing the operating costs of companies and improving the global service trade business environment. At present, there are 67 participants to the negotiation, including China, the United States and the European Union. Their service trade accounts for more than 90% of the global total. According to the joint research report of WTO and OECD, the entry into force of the negotiation outcomes will save about USD150 billion of costs per year for global companies, especially small and medium-sized ones, in participating in international service trade. In addition, the relevant rules can also bridge the differences among relevant parties in the regulation system of service trade, reduce the barriers of service trade and promote the faster growth of global service trade.

China will, according to relevant requirements, speed up the domestic approval procedures, submit the schedule of specific commitments on time, and work with relevant parties to promote the early entry into force of the negotiation outcomes. Thank you.

Phoenix TV: On December 8 EST, the U.S. House of Representatives deliberated on and passed the "Uyghur Forced Labor Prevention Act”, which prohibits the import of Chinese products related to Xinjiang. What is the comment of the Ministry of Commerce?

Gao Feng: We have taken note of this. The United States intends to pass legislation to prohibit the import of Chinese products related to Xinjiang in disregard of the facts. This is a practice of unilateralism, protectionism and bullying using the so-called "human rights" as a cover, which completely violates WTO principles, and seriously disrupts the international economic and trade order and free trade rules. It will seriously damage the vital interests of companies and consumers of the two countries, the basic human rights such as the rights to subsistence and development of people of all ethnic groups in Xinjiang, China, and will also aggravate the global supply chain tension and affect global economic recovery. China firmly opposes that. The US should immediately stop its ill-advised measures. We will take the necessary measures to resolutely safeguard China's legitimate rights and interests. Thank you.

CNR: On December 11, 2001, China officially joined the WTO. What achievements have China made in trade facilitation since China's WTO accession?

Gao Feng: This year marks the 20th anniversary of China’s accession to the World Trade Organization (WTO). In the past twenty years, China has been a firm supporter of, an active participant in and an important contributor to the multilateral trading system. China has fully delivered on its accession commitments. By 2010, China had fulfilled all of its tariff reduction commitments, reducing the average tariff level from 15.3% in 2001 to 9.8%. China’s further voluntary moves to cut tariffs brought its overall tariff level further down to the current 7.4% in 2021.

China has focused trade facilitation on the following areas:

First, China fully implements the WTO Trade Facilitation Agreement. Since the Trade Facilitation Agreement came into effect in February 2017, the Chinese government has actively implemented various trade facilitation measures required by the Agreement. In January 2020, China notified the WTO that it implemented measures in the Agreement ahead of schedule, such as the establishment and publication of average release times. China has 100% implemented various measures under the Trade Facilitation Agreement.

Second, China continues to reduce the time to clear import and export through customs. In June this year, the time to clear import through customs was 36.7 hours, 62.3% lower than that of 2017. The time to clear export through customs was 1.8 hours, 85.2% shorter than that of 2017.

Third, China continues to reduce the number of documents required by regulation during import and export. Relevant departments have reduced the items for approval during import and export and improved regulatory requirements in accordance with law. In July this year, the number of documents to be verified during import and export required by regulation was reduced from 86 in 2018 to 41, a decrease of 52.3%.

Fourth, FTAs and PFTZs have effectively promoted trade facilitation. To date, China has signed 19 FTAs with 26 countries and regions, covering transparency, release of goods, customs cooperation and other provisions, playing a positive role in streamlining customs procedures, improving clearance efficiency and facilitating cross-border movement of goods. PFTZs have actively explored trade facilitation and have replicated and promoted 79 institutional innovations of trade facilitation across China.

Fifth, enhancing and expanding the “single window” for international trade. Currently, many import and export certificates, including automatic import licenses and export licenses, go 100% paperless in application.

The Chinese government will continue to promote trade liberalization and facilitation, unswervingly advance high-level opening-up, and boost high-quality development of trade to share its own development opportunities with the world, realizing win-win and common development for a community with a shared future for mankind. Thank you.

CMG: This year marks the 20th anniversary of China’s accession to the WTO. What has China achieved in attracting FDI in the past 20 years? What are the highlights?

Gao Feng: Since its accession to the WTO, China has actively fulfilled its WTO accession commitments, and continuously expanded opening up, and fully participated in global economic cooperation with remarkable results achieved in FDI attraction.

First, FDI inflow has continued to expand. China’s paid-in FDI increased from RMB388 billion in 2001 (excluding banking, securities and insurance sectors, the same below) to RMB999.98 billion in 2020, up by 157.7%. It reached RMB943.15 billion in the first 10 months of this year and is expected to exceed RMB1 trillion for the whole year.

Second, FDI quality has continued to improve. The paid-in FDI in high-tech industries increased more than four times from RMB55.4 billion in 2001 to RMB296.29 billion in 2020. From January to October this year, it reached RMB297.38 billion, already exceeding last year’s total, and accounting for 31.5% of the actual use of FDI nationwide, up from 14.3% in 2001.

Third, market access has been significantly widened. China has lifted all foreign investment restrictions in the manufacturing sector, relaxed restrictions on foreign investment in the agricultural sector such as the seed industry, and continuously expanded the opening up of service sectors such as finance, telecommunications, construction, distribution, tourism and transportation. Nearly 120 of the 160 services sub-sectors under the WTO classification have been opened up. China is actively promoting opening up at the institutional level by adopting a pre-establishment national treatment plus negative list management system, under which restrictions for foreign investors are included in a comprehensive and well-regulated negative list. In 2013, the negative list for the China (Shanghai) Pilot Free Trade Zone included 190 items. By 2020, there had been only 33 items on the national negative list, 30 on the PFTZs list, and 27 on the Hainan Free Trade Port list.

Fourth, the investment environment has continued to improve. The Foreign Investment Law and its implementing regulations have been promulgated. The foreign investment information reporting system has replaced the existing system of approval and filing by the commerce department for the establishment and change of foreign-invested enterprises. Investment liberalization and facilitation has been greatly enhanced. A sound complaint mechanism for foreign-invested enterprises has been set up. China has stepped up efforts to protect the legitimate rights and interests of foreign investors. A sound foreign investment service system has been established to strengthen the services for foreign-invested enterprises and key projects.

Fifth, platforms for opening up have become more diverse. China has by far set up 21 Pilot Free Trade Zones, which account for 18.6% of the country’s total paid-in foreign investment in the first 10 months of this year. The Hainan Free Trade Port has been up and running and registered a rapid growth in FDI inflow in recent years. The “1+4” pilot model of Beijing plus Tianjin, Shanghai, Hainan and Chongqing was created for comprehensively expanding opening up of the service sector. The 230 national economic and technological development zones have achieved significant results in terms of innovation and upgrading, with their import and export volume and foreign investment absorption accounting for about one-fifth of the country’s total respectively, making them the major pacesetter for stabilizing foreign trade and investment.

China will continue to promote opening up at a higher level and share market opportunities with the world. We will make the negative list of foreign investment access still shorter, step up services for foreign enterprises and projects, and continue to maintain a law-based, international and convenient business environment so that foreign investors can share development dividends in China’s development. Thank you.

China Business News: December 11 marks the 20th anniversary of China's accession to the WTO. How does the Ministry of Commerce evaluate China's full implementation of its WTO commitments? How will China continue to support the multilateral trading system in the future?

Gao Feng: Since China's accession to the WTO, China has further aligned with multilateral trade rules in all areas, honored its commitments on opening trade in goods and services, and strengthened intellectual property rights (IPR) protection. Remarkable improvements have been made in enhancing the stability, transparency, and predictability of its opening-up policies. The government of China keeps its words, and faithfully and comprehensively fulfills its WTO accession commitments, which has won recognition by the Director-General and members of the WTO.

In terms of strengthening alignment with WTO rules, China’s central government has reviewed and revised over 2,300 pieces of laws and regulations, and local governments over 190,000 pieces. The legal and policy frameworks that conform to WTO rules have been established. China continues to open up its markets and reduces tariffs by a large margin: the overall tariff rate has been cut from 15.3% to 7.4%, lower than the 9.8% accession commitment. China has extensively opening up the services market. By 2007, China had honored all of its commitments on opening up 100 sub-sectors under 9 service sectors. Nearly 120 service sub-sectors are opened now. China has continuously strengthened law enforcement on IPR protection, actively fulfilled commitments on transparency, always respected and faithfully implemented the rulings of the dispute settlement mechanism.

The government of China will continue to firmly support the multilateral trading system with the WTO at its core and uphold the multilateral trading system as the main channel for international rules-making. China has been active in WTO reform, upholds the legitimate rights and interests of developing members, and supports the WTO in playing a greater role and the inclusive development of the multilateral trading system.

Shanghai Securities News: The Department of Foreign Trade of the Ministry of Commerce has identified 2021 as “the year of innovative development of foreign trade”, and will implement three major plans--focusing on optimized import and export, trade and industry integration, and smooth trade flow. How is the progress so far? What measures will be taken to promote innovative foreign trade development?

Gao Feng: This yea is the year of innovative development of foreign trade. The Ministry of Commerce, in conjunction with all relevant departments and local governments, has actively implemented three major plans on optimized import and export, trade and industry integration, and smooth trade flow, to promote the innovative development of foreign trade, and contribute to the rapid formation of the new development paradigm.

In terms of optimized import and export, first, the trade structure is further optimized. Emerging markets have become China’s main trading partners, accounting for 49.5% of export. The role of private enterprises as the main players is more prominent, accounting for 57.4% of export. Second, the quality of export continued to improve. The proportion of electrical and mechanical products export rose to 59%. China provided more than 1.85 billion doses of Covid-19 vaccines to more than 120 countries and international organizations. Third, the import of high-quality products continues to increase. In RMB terms, imports of consumer goods grew 22.3% from January to October, which can better meet consumer demand for high-quality and personalized goods. Imports of advanced technology, important equipment and key components helped to keep the supply chain and industrial chain stable and smooth. Fourth, new forms of foreign trade emerged more rapidly. Cross-border e-commerce import and export, market procurement grew rapidly. There are now more than 1,500 foreign trade integrated services enterprises, more than 16 million square meters of overseas warehouse, and about 130 bonded maintenance program.

In terms of trade and industry integration: First, we have further promoted the high-quality development of foreign trade transformation and upgrading bases. We identified an additional 105 national foreign trade transformation and upgrading bases, built public service platforms, and optimized and improved support policies. Second, we guided the gradual transfer of processing trade to the central, western and northeastern regions. We support industrial cooperation between the central and western regions, the northeast and the eastern region, cultivated and identified the first batch of 13 national processing trade industrial parks. In the first 10 months of this year, processing trade exports in the central and western regions rose by 1.3 percentage points to 26.7%. Third, enhance the industrial development capacity in border areas. We trialed the first batch of border trade imports processing in 13 counties and cities. Under the A hundred Companies into the Border Area initiative, nearly 80 companies have started processing in border areas.

On trade facilitation: First, we have improved trade flows. We have newly established smooth trade working groups with Indonesia and other countries, and leveraged existing working groups to seek practical solutions to difficulties and problems in bilateral trade. Second, we have encouraged the formation of international marketing systems by supporting key sectors in developing international marketing regimes and stepping up promotion of state-level public service platforms. Third, we have enhanced ease of trade by continuously expanding functions of the “dingle window” for international trade. Fourth, we have supported companies to expand domestic and international markets through such trading platforms as Canton Fair and the CIIE, in a bid to better connect the domestic and international circulations. Fifth, we have pushed for foreign trade integration by supporting domestic sales of products made for export, and ensuring that good for domestic and overseas sale are made on the same production lines, meet the same standards, and be of the same quality.

In the next step, MOFCOM will follow the instructions of the CPC Central Committee and the State Council on innovation-driven development to grow new institutions, business models and business types for foreign trade and pursue high-quality development of trade. First, we will work faster to cultivate new trade types. We will expand the scope of new comprehensive pilot zone for cross-border e-commerce, improve the pilot adjustment mechanism for market procurement trade, support the sound development of general foreign trade services providers, optimize the overseas warehouse network, enhance repair services in bonded zones, and push for steady progress in offshore trade. Second, we will actively explore green trade. Championing the concept of green development, we will accelerate the green and low-carbon transformation of foreign trade, explore green trade standards and certification regimes, build platforms for the development of green trade, create a favorable policy environment, and strengthen international cooperation. Third, we will advance digital trade. We will design and establish a policy system facilitating trade digitization and bolster relevant rules and standards. We will move ahead with international cooperation, stay focused on encouraging digital transformation of foreign trade companies to enable digital empowerment along the whole trade chains, and improve public services. We will also encourage local authorities in taking the initiative, by setting up a group of pacesetter zones for digitization in the Guangdong-Hong Kong-Macao Greater Bay Area and other areas. Thank you.

Gao Feng: Do you have any more questions? If not, this is the end of today’s press conference. Thank you.

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