Shu Jueting: Friends from the press, good afternoon. Welcome to today’s regular press conference. I have two pieces of information to brief you.
First, FDI in China from January to November 2021.
From January to November 2021, the paid-in FDI in China was RMB1,042.2 billion, a YoY increase of 15.9% (equivalent to USD157.2 billion, a YoY increase of 21.4%; excluding banking, securities and insurance, same below).
Sector-wise, the paid-in FDI for services was RMB823.94 billion, up 17% YoY. The paid-in FDI for high-tech industries increased by 19.3%, among which high-tech services increased by 20.8% and high-tech manufacturing by 14.3%.
Origin-wise, the paid-in FDI of BRI countries and ASEAN increased by 24.7% and 23.7% YoY respectively (including investment via free ports).
Region-wise, FDI in eastern, central and western China increased by 15.4%, 25.8% and 13.4% respectively.
The second piece of information is on the service outsourcing of China from January to November this year.
In the first eleven months of 2021, Chinese companies undertook service outsourcing contract worth RMB1.5604 trillion, with executive value at RMB1.1016 trillion, up by 20.2% and 19.4% year on year. In breakdown, overseas service outsourcing contract value was RMB876 billion, with executive value at RMB656.9 billion, up by 14.4% and 16.7%. (In dollar terms, Chinese companies undertook service outsourcing contract worth USD235.1 billion, with executive value at USD166.1 billion, up by 25.2% and 24.4% year on year. In breakdown, overseas service outsourcing contract value was USD132.6 billion, with executive value at USD99.2 billion, up by 20.0% and 21.6%.)
In terms of business structure, in the first eleven months, the executive value of ITO, BPO and KPO to Chinese companies were RMB289 billion, 103.8 billion, and 264.1 billion, up by 11.1%, 17.8% and 23.0%. New energy technology research services, IT solution services, industrial design services, pharmaceutical and biological technology research services, among other offshore service outsourcing, grew rapidly, at a rate of 89.4%、78.8%、34.0% and 19.9%.
In terms of regional distribution, in the first eleven months, 37 service outsourcing demonstration cities undertook service outsourcing contract of RMB763.2 billion, with executive value at RMB576 billion, representing 87.1% and 87.7% of the national aggregate. The Yangtze River Delta undertook offshore service outsourcing of RMB416.9 billion, with executive value of RMB329.9 billion, accounting for 47.6% and 50.0% of the national total.
In terms of the international market, in the first eleven months, the executive value of service outsourcing from the US, Hong Kong SAR, and the EU were RMB147.9 billion, 118.7 billion, and 81.1 billion, accounting for 52.9% of the total, up by 17.0%, 22.5% and 11.1%. The contract value of service outsourcing from Belt and Road partner countries was RMB169.1 billion, with executive value at RMB124.1 billion, up by 28.2% and 25.2%.
By business ownership, in the first eleven months, the executive value of service outsourcing to private businesses was RMB179.6 billion, accounting for 27.3% of the national total and up by 30.4%, 13.7 percentage points higher than the national average. The executive value of service outsourcing to FIEs was RMB284.1 billion, accounting for 43.2% of the national total and up by 13.1%.
By job creation, by the end of November 2021, service outsourcing in China created 13.78 million jobs, with 64.1%, or 8.84 million holding college degrees and above. In the first eleven months, service outsourcing created 870,000 jobs, up by 1.6%, with 73.9%, or 640,000 holding college degrees or above.
Shu Jueting: This is my briefing today. Now the floor is open to questions.
Xinhua News Agency: The Chinese and Russian leaders met via video link on December 15, during which they gave a positive review of this year’s bilateral relations and cooperation outcomes in all sectors. In 2021, China-Russia trade has been growing rapidly. What will MOFCOM do to strengthen this sound momentum?
Shu Jueting: This year, under the strategic leadership of the two heads of state, China and Russia have overcome the impact of the pandemic and worked to register positive trade growth. I would like to point out three highlights. First, record-high trade volume. From January to November this year, China-Russia trade in goods reached USD130.43 billion, growing by 33.6% year-on-year, outpacing China’s total foreign trade by 2.3 percentage points. For the whole year, our goods trade is expected to exceed USD140 billion, hitting a record level, and making China Russia’s largest trading partner for 14 years running. Second, optimizing structure. From January to October, China-Russia trade in machinery and electrical products grew by 37.1% to USD33.68 billion, accounting for 29.1% of our total trade, two percentage points higher over last year. China’s export of automobiles and automobile components to Russia scored USD1.6 billion and USD2.1 billion, surging by 206% and 49% respectively. China imported 15,000 tons of beef from Russia – 3.4 times that of last year, thus becoming Russia’s largest export market of beef. Third, booming new business types. Cross-border e-commerce cooperation has been growing rapidly, with steady progress in overseas warehouses and e-commerce platforms in Russia, and ongoing improvement of marketing and distribution networks, giving a boost to bilateral trade growth.
In the next step, China will continue to work closely with Russia to implement the consensus of our leaders and pursue improvement of our bilateral trade in both quantity and quality. First, we will keep up trade of conventional energy, minerals, agriculture, forestry, and other commodities. Second, we will explore new growth drivers such as digital economy, biomedicine, technological innovation, and green and low-carbon development, while boosting machinery and electrical products, cross-border e-commerce and services trade. Third, we will keep deepening cooperation on industrial and supply chains and boost infrastructure and policy connectivity to further facilitate trade. Fourth, we will increase two-way investment and expand cooperation on project contracting to encourage greater trade growth. Thank you.
China Business News: Recently, 112 WTO members including China, the EU, Russia, and Japan jointly issued the Joint Statement on Investment Facilitation for Development. What signal does this move send, especially amid the Covid-19 pandemic and rising unilateralism?
Shu Jueting: The WTO negotiations on investment facilitation aim to establish international rules that elevate global investment policy transparency, simplify and expedite investment review procedures, and promote international cooperation.
At present, the world is suffering from Covid-19 resurgence, world economic recovery remains brittle, and international investment cooperation faces growing uncertainties and instability. According to UNCTAD’s World Investment Report 2021, global foreign direct investment flows dropped by 35% in 2020; the proportion of more restrictive or more regulatory new policy measures over the same period was 33%, the highest since 2003. All these make the WTO negotiations on investment facilitation ever more relevant.
On December 10, China and 111 WTO members including the EU, Russia, Japan, Chile, Brazil, and Nigeria jointly issued the Joint Statement on Investment Facilitation for Development, in which the parties confirm the aim of concluding the text negotiations by the end of 2022. China will remain committed to supporting the WTO’s work on investment facilitation. China is willing to work with all other parties to push for early conclusion of an agreement, so as to further improve the global investment policy climate and safeguard recovery of cross-border investment with rules. Thank you.
National Business Daily: China’s total trade from January to November this year has exceeded that of the whole 2020. As the base effect has been dwindling in the second half, what are the reasons behind the better-than-expectation foreign trade growth? What’s MOFCOM’s comments on China’s foreign trade in 2021?
Shu Jueting: The following factors contributed to the rapid foreign trade growth in the second half. First, the global economy keeps recovering, and external demand is turning stronger. According to UNCTAD estimates, global goods export is expected to grow by 22.4% in 2021. Second, the global demand gap remains due to Covid-19 resurgence, and China has been able to satisfy consumers’ demand on the international market with its complete manufacturing system. Third, rising commodities prices have significantly contributed to import growth.
Our expectation is that over the whole year, China’s foreign trade structure will be optimized, high-quality development will press ahead expeditiously, China’s status as a major trading country will be reinforced, and the objectives of stabilizing quantity while bolstering quality will be successfully accomplished. Still, we need to be aware that foreign trade in the next year will continue to face challenges. We will keep close attention to the latest developments, keep addressing difficulties of foreign trade companies, keep spurring the vitality of market entities, and keep foreign trade within a reasonable range. Thank you.
CNR Business Radio: In August, 2020, the State Council approved the pilot programme of deepening comprehensive innovation-driven development of trade in services in 28 areas across China. How is it going? Are there any experience that could be replicated nationwide?
Shu Jueting: In August last year, the State Council gave its approval to the pilot programme of deepening comprehensive innovation-driven development of trade in services in 28 areas of China. The pilot period lasts for 3 years. Over the past year, MOFCOM, together with other relevant departments, has implemented the decisions of the CPC Central Committee and the State Council and instructed the pilot areas to explore ways of innovating boldly and early. The pilot programme has already reaped positive outcomes.
First, over 90% of all tasks under the pilot programme have been implemented. Tasks in eight fields and 122 measures for reforms, opening-up and innovation were approved by the State Council and put forward under the master plan of the pilot programme. As of date, each task is progressing well. 110 out of the 122 measures have been implemented, registering an implementation rate of over 90%. The five measures involving adjustment for the implementation of administrative laws and regulations and documents by the State Council also attained the approval of the State Council.
Second, the demonstrative effects of the mechanism outcomes of the pilot programme are significantly enhanced. Since the launch of the programme, while earnestly undertaking the implementation of the national version of the master plan, each pilot area has been formulating its local version of implementation plan based on its local conditions. After active and early exploration, good experience and practices that are institutionally innovative and could be replicated have come into shape. To date, MOFCOM, together with relevant departments, has popularized 90 rules of thumb and practice cases nationwide. We are currently summarizing and plan to publicize a bunch of new practice cases to share in the dividends of new mechanisms more quickly.
Third, the pilot programme has become an important driver for stabilizing foreign trade and investment. Since last year, provinces, autonomous regions or municipalities homing these pilot areas maintained a 97% share of national import and export of services, consolidating their leading positions with respect to services import and export. With the contribution of these pilot areas, China’s services import and export from January to October, 2021 totaled RMB4.2 trillion, up by 12.7% year-on-year. In breakdown, services export grew by 29%, while deficit in trade in services fell by 67.6%. Paid-in FDI in the services sector reached USD113.16 billion, a year-on-year increase of 25.7%, accounting for 79.7% of the national total, an increase of 8.1 percentage points compared with the same period over last year.
In the next step, following the guiding principles of the remarks by President Xi Jinping in the 2021 CITTIS and working in line with the decisions made by the CPC Central Committee and the State Council, MOFCOM will continue to promote the pilot programme up to high standards and upgrade pilot areas with substantive achievement to national demonstration zones of innovation-driven trade in services, in a bid to deepen reforms of services trade and broaden opening-up and mechanism innovation across China. Thank you.
CBN: The Central Economic Working Conference pointed out that China must broaden high-level opening-up and take multiple measures to stabilize foreign trade and industrial chain and supply chain. How will MOFCOM meet the target of stabilizing foreign trade and industrial chain put forward by the Conference?
Shu Jueting: From this year on, China’s foreign trade showed strong resilience despite the shock brought by the pandemic to have stable and reasonably rapid growth. But we also understand that there are still many uncertainties, instabilities and unbalanced elements in foreign trade. The repeated resurgence of global pandemic, complex international landscape, unsmooth sea transport and shortage of chip supply that cannot be fundamentally addressed in a short period and remaining high comprehensive cost of enterprises all burden the operation of foreign trade. In the next step, while earnestly implementing the spirit of the Central Economic Working Conference, we will continue to work to ensure stability on the six Fronts and security in the six areas, closely monitor the performance of foreign trade and adopt multiple measure to stabilize foreign trade. MOFCOM will focus on the following three aspects:
First, stepping efforts to stabilize market entities. The role of export credit insurance and export credit in supporting the exporters will be further leveraged to help businesses better guard against the risk of exchange rate fluctuations, promote trade facilitation, and relieve the burden of foreign trade companies. At the same time, new business types and models will be promoted in a faster pace. New export channels such as cross-border e-commerce and overseas warehouses will also play a bigger leading role.
Second, ensuring stability and efficiency of industrial chain and supply chain of foreign trade. Platforms such as high-standard bases for the transformation and upgrading of foreign trade, national industrial parks for processing trade and national demonstration zones for import trade promotion and innovation will be developed. Work on unblocking foreign trade will be carried out, and we will also work with other departments to facilitate international logistics, help shipping companies conduct direct transactions with small, medium and micro-sized foreign trade companies, and promote efficient settlement.
Third, further diversifying markets. The role of trade facilitation working groups will be fully leveraged, the multilateral trading system will be safeguarded, existing FTAs will be better utilized, and enterprises will be instructed to reach out to the international market in a targeted manner. All sorts of virtual and on-site exhibitions will be better held and national public platforms for international marketing services be better promoted to give a full play to major exhibitions and platforms for opening-up purposes in unblocking the domestic and international circulation. Thank you.
Shu Jueting: Any more questions? If not, this is the end of today’s press conference. Thank you.
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