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MOFCOM Regular Press Conference (January 27, 2022)

Gao Feng: Members of the press, good afternoon, welcome to MOFCOM regular press conference. First of all, let me share with you two pieces of information.

I. About China’s online retail market in 2021

In 2021, China’s online retail market kept growing steadily, becoming a key driver for growth, employment and consumption and contributing to the development of a new development paradigm. According to the National Bureau of Statistics, China’s online retail sales hit RMB 13.1 trillion in 2021, up 14.1% year-on-year, 3.2 percentage points higher than the year before. Specifically, the sales of physical goods stood at RMB 10.8 trillion, breaking the RMB 10 trillion mark for the first time and up 12.0% year-on-year. Accounting for 24.5% of the total retail sales of consumer goods, they contributed 23.6% to the total retail sales’ growth.

According to commerce big data monitoring, China’s online retail market showed the following characteristics in 2021.

First, consumption upgrade represented a clear trend. Healthy, green and quality goods became increasingly popular with consumers. For instance, smart home, smart wearables and smart household appliances all reported rapid growth. Sales of smart home devices were up 90.5% year-on-year and those of smart watches and glasses were up 36.3% and 26.8% respectively. The sales of outdoor goods grew 30.8% year-on-year. Of these, the sales of tents, skiing equipment and surfing and diving products were up 57.0%, 55.2% and 39.2% year-on-year. The sales of organic vegetables, milk and cooking oil increased 127.6%, 24.1% and 21.8% year-on-year. Many intangible cultural heritage products embodying Chinese characteristics and tradition became darlings of China chic, whose sales were up 39% year-on-year.

Second, e-commerce innovation in services showed a strong momentum. E-commerce innovation enabled universal access to quality service resources in education and healthcare, with online sales of vocational training services continuing to grow. Online catering grew faster, with sales up 30.1% year-on-year, which is 27.9 percentage points higher than the previous year. Online culture and entertainment market recovered rapidly, with the number of events up 1.2 times year-on-year.

Third, rural e-commerce effectively boosted the rejuvenation of the countryside. In 2021, China’s rural online retail sales were RMB 2.05 trillion, up 11.3% year-on-year, which is 2.4 percentage points higher than the previous year. China’s online retail sales of agricultural products reached RMB 422.1 billion, up 2.8% year-on-year. The Digital Commerce for Agriculture campaign advanced further, with new infrastructure for rural e-commerce continuously improving.

Fourth, cross-border e-commerce grew steadily and fast. According to customs statistics, cross-border e-commerce imports and exports reached RMB 1.98 trillion, up 15%. Of these, exports registered RMB 1.44 trillion, up 24.5%. The comprehensive pilot zones for cross-border e-commerce showed a strong driving effect in promoting the steady and fast growth of cross-border e-commerce.

II. About China’s services outsourcing in 2021

In 2021, China’s services outsourcing continued to grow fairly fast, with the annual contractual value of the offshore outsourcing it undertook exceeding RMB 1 trillion for the first time and a good start for the 14th five-year plan period. The main characteristics are as follows.

In terms of scale, in 2021, Chinese companies undertook services outsourcing worth RMB 2.1341 trillion in contractual value and RMB 1.4972 trillion in executed value, up 25.4% and 23.6% respectively. Of these, the contractual value of offshore outsourcing exceeded RMB 1 trillion for the first time, with an executed value of RMB 860 billion, up 16.0% and 17.8% year-on-year. (In USD terms, in 2021, China undertook services outsourcing worth USD 322.4 billion in contractual value and USD 226.5 billion in executed value, up 30.9% and 29.2% respectively. Of these, the contractual value of offshore outsourcing was USD 171.7 billion, with an executed value of USD 130.3 billion, up 22.3% and 23.2% year-on-year.)

Structure-wise, the executed values of offshore ITO, BPO and KPO Chinese businesses undertook were RMB 363.1 billion, RMB 130.8 billion and RMB 366.1 billion respectively, up 13.3%, 11.1% and 25.3%. Of these, offshore outsourcing for management consultancy services, construction machinery repair and maintenance services, new energy technology research and development services, e-commerce platform services, information technology solution services, industrial design services, pharmaceutical and biotechnology research and development services grew fairly fast by 141.8%, 93.9%, 90.4%, 43.3%, 41.2%, 37.7% and 24.7% year-on-year.

The 37 model cities of service outsourcing undertook offshore service contracts worth 959.1 billion yuan, with an executed value of 733.6 billion yuan, accounting for 84.9% and 85.3% of the national total respectively. The Yangtze River Delta region undertook offshore service outsourcing contracts worth 510 billion yuan with an executed value of 402.2 billion yuan, accounting for 46.0% and 46.8% of the national total respectively.

The executed value of offshore services from the US, Hong Kong SAR, and the EU undertaken by Chinese enterprises amounted to 199.4 billion yuan, 145.6 billion yuan and 115.4 billion yuan, accounting for 53.5% of executed value of China's offshore service outsourcing, an increase of 28.6%, 21.5% and 18.6% respectively. The offshore service outsourcing from Belt and Road countries witnessed a contract value of 226.1 billion yuan and an executed value of 161.6 billion yuan, up by 25.7% and 18.7% respectively.

The executed value of offshore services by private enterprises amounted to 232 billion yuan, accounting for 27.0% of the national total, up by 27.1%, 9.3 percentage points higher than the national average growth rate. Foreign-invested enterprises undertook offshore service outsourcing contracts with an executed value of 370 billion yuan, accounting for 43.0% of the national total, up by 16.1%.

By the end of December 2021, China’s service outsourcing industry has employed 13.95 million people, an increase of 8%, of whom 8.98 million have university or higher degrees, accounting for 64.3%. From January to December, the service outsourcing industry added 1.04 million jobs, including 780,000 people with university or higher degrees, accounting for 74.9%.

Gao Feng: So much for the announcement. Next I would like to answer your questions. The floor is open.

Xinhua News Agency: We noticed that China-Russia trade achieved a historic breakthrough in 2021. What’s MOFCOM’s comment on this? What are the other achievements and highlights in addition to trade and what are the next steps to promote the development of China-Russia trade and economic cooperation?

Gao Feng: In 2021, under the strategic leadership of the two heads of state, China-Russia commercial cooperation overcame many difficulties and achieved leapfrog development. There are five new features.

First, bilateral trade hit new high. In 2021, China-Russia trade in goods reached 146.87 billion dollars, exceeding 140 billion dollars for the first time, an increase of 35.9% year-on-year. China has been Russia’s largest trading partner for 12 consecutive years. The trade structure was further optimized. Last year, China-Russia trade in mechanical and electrical products reached 43.4 billion dollars, up 40.7%, 4.8 percentage points higher than the increase in bilateral trade. China’s exports of automobiles, home appliances, construction machinery and other goods to Russia registered rapid growth, and imports of beef, dairy products and other agricultural and food products maintained a sound momentum.

Second, cooperation on large projects made new breakthroughs. The construction of four units of Tianwan and Xudaburg nuclear power plants started. The Blagoveshchensk-Heihe Highway Bridge is ready for operation. The Tongjiang-Nizhneleninskoye cross-river railway bridge was opened to traffic. The two sides signed a memorandum of cooperation on building an international lunar research station and a roadmap for cooperation on satellite navigation. New progress was made in cooperation on oil and gas, chemical industry, aviation manufacturing and other fields.

Thirdly, outbound investment in Russia made new progress. The value of newly-signed contracts by Chinese enterprises in Russia have exceeded 5 billion dollars for three consecutive years, and the completed turnover reached 5.6 billion dollars last year, hitting a record high. Cooperation between the two sides on the fields of energy and minerals, agriculture and forestry development, trade and logistics, industrial manufacturing, etc. has been solidly promoted and the industrial chain has been extended.

Fourth, practical cooperation opened up new areas. The two sides actively promote cooperation in cross-border e-commerce, green and low-carbon, biomedicine, cultural creativity and other emerging areas, and promote cooperation in digital, green and innovation empowerment. According to Chinese statistics, in the first 11 months of last year, China-Russia cross-border e-commerce trade volume increased by 187%.

Fifth, institutional arrangement injected new momentum. MOFCOM and the Russian side have completed the Roadmap for High-Quality Development of China-Russia Trade in Goods and Services and signed a memorandum on investment cooperation in the digital economy. The two sides are exploring the upgrading of the China-Russia Investment Agreement. China and Russia signed a memorandum on multilateral and regional economic cooperation, strengthened coordination and cooperation in multilateral frameworks such as the WTO, BRICS and SCO, and actively promoted cooperation between the "Belt and Road" initiative and the construction of the Eurasian Economic Union.

Going forward, MOFCOM will continue to work closely with the Russian side, make every effort to implement the important consensus of the two heads of state, put stability front and center, seek progress while ensuring stability, strive to promote the high-quality development of bilateral economic and trade cooperation, and continuously consolidate and deepen the China-Russia comprehensive strategic partnership of coordination for a new era. Thank you.

Bloomberg: The EU has said it would launch a WTO case against China over China’s restrictions on Lithuanian exports and Lithuanian components contained in exports of other EU member states. What’s your response?

Gao Feng: China and the EU, both WTO members, have been in contact under the dispute settlement mechanism.

I want to stress that China has always been regulating foreign trade in compliance with WTO rules. We will address relevant issues in accordance with WTO rules. Thank you.

South China Morning Post: On the evening of January 26, the WTO arbitrator issued decisions on the China-U.S. dispute over US countervailing duties. What’s your comment?

Gao Feng: On January 26, 2022, the WTO arbitrator published its decisions on China’s dispute settlement case over U.S. countervailing measures, in which it determines that given the U.S.’s failure to implement the WTO’s effective rulings, China may impose US$645 million of goods trade countermeasures per year. This is the second time China has been awarded trade countermeasures against the U.S., after an award of US$3.579 billion per year previously.

The WTO ruling once again attests that the U.S. has long violated WTO rules, abused trade remedy measures, and rejected implementation of WTO rulings and international obligations clearly stipulated by the WTO rules, thus seriously jeopardizing the fair and equitable international trade environment. It is hoped that the U.S. stop looking for any excuse and take immediate actions to correct its wrong practices in trade remedy investigations on China.

China attaches great significance to international rule of law in stabilizing international trade and economic order and regulating international trade and economic relations. We will follow up closely with The U.S.’s subsequent implementation and reserve rights to take further actions, so as to uphold the authority the multilateral trading system. Thank you.

CGTN: It is reported that Indian taxation departments are carrying large-scale probes into Chinese companies in India. What’s your comment?

Gao Feng: Recently, Indian taxation agencies have carried out large-scale tax probes and searches targeting some Chinese companies in India. China pays close attention to this development and expresses its about India’s investment environment. The investment and operation of Chinese businesses in India have created a lot of local jobs and contributed to India’s economic development. We hope that India could foster a fair, transparent and non-discriminatory business environment for Chinese companies in India. Thank you.

China Business News: China’s machinery and electronic products export jumped by 20.4% to RMB12.83 trillion in 2021, accounting for 59% of the total export. What contributed to this surge? Does it mean optimization of China’s trade mix?

Gao Feng: In 2021, China exported US$1986.04 billion worth of machinery and electronic products, surging by 29.1% year-on-year and accounting for 59% of the total export. The scale and increment of both registered a record high, and the growth rate was the fastest in the previous 11 years. The rapid growth of machinery and electronic products last year was due to the following reasons:

First, driving force of key product categories. All 28 product categories saw growth in export, and household electrical appliances, mobile phones, integrated circuits, electronic components, automobiles and auto parts, machinery components and electric tools all saw export worth over US$100 billion.

Second, better export mix. From January to November 2021, the export of machinery and electronic products in general trade was US$888.76 billion, up by 2.9 percentage points year-on-year to account for more than half (50.4%) of the total. Over the same period, the export contributed by private companies reached US$843.31 billion, or 47.9% of the total, an increase of 2.5 percentage points. Export growth of high value-added products, such as automobiles, engineering machinery and photovoltaic products, all exceeded 40%.

Third, greater market diversification. The U.S. and the EU continued to be our main markets, with exports standing at US$349.12 billion and US$329.01 billion, up by 25.7% and 36.8% respectively. The export to emerging markets and BRICS countries increased by 29.2% and 42.1% to US$885.34 billion and US$138.79 billion respectively, and their shares climbed to 44.6% and 7%.

This year, our foreign trade will continue to face challenges and complexities, and the export pf machinery and electronic products will encounter multiple uncertainties. We will step up trade liberalization, help businesses explore markets through diverse means, and ensure stable and smooth foreign trade industrial and supply chains, to boost high-quality development of our machinery and electronic products trade. Thank you.

Global Times: We noticed that MOFCOM published a list of the top 30 national-level economic development zones (NEDZs) in the 2021 NEDZ comprehensive development assessment and evaluation and lists of the top 10 NEDZs in terms of foreign investment utilization and foreign trade. What are the main considerations? What future steps will be taken to promote the development of the zones?

Gao Feng: This morning, we released the results of the 2021 assessment and evaluation of the comprehensive development of NEDZs. We can see from the results that the top 30 NEDZs achieved a regional GDP of RMB4 trillion, accounting for 36% of all NEDZs’ total GDP, with an average of more than RMB130 billion per zone; the top 10 NEDZs trade-wise achieved an import and export volume of RMB2.7 trillion, accounting for 39% of all NEDZs’ total trade; the top 10 NEDZs in terms of foreign investment received USD16.9 billion of paid-in investment and reinvestment from foreign-invested enterprises, accounting for 29% of all NEDZs’ total FDI utilization. These figures speak volume about the fact that these development zones, as leading NEDZs, made important contribution to stabilizing growth, especially to stabilizing the fundamentals of foreign trade and investment.

Going forward, following the plans of the CPC Central Committee and the State Council, MOFCOM will ground its efforts in the new development stage, comprehensively, fully and accurately apply the new development concepts, contribute to the building of the new development paradigm, continue to push for NEDZ innovation and upgrade, give full play to the NEDZs’ role as crucial opening-up platforms and guide outstanding NEDZs in better driving high-quality regional economic development. First, we will highlight NEDZs’ positioning in and orientation towards high-quality and open development, and continue to do a good job in stabilizing foreign trade and investment. Second, we will step up efforts to promote industrial chain investment, push for the transformation and upgrade of manufacturing in NEDZs, vigorously develop advanced manufacturing and strategic emerging industries, and promote the development of industrial clusters to underpin the efforts to keep industrial and supply chains stable. Third, we will guide NEDZs in carrying out extensive cooperation. We will support NEDZs in developing international cooperation parks where conditions allow, and vigorously develop the green economy and digital economy. We will encourage NEDZs in the eastern, central and western region to strengthen cross-regional industrial collaboration and pair up for shared development with industrial chains as the bond. Thank you.

Economic Information Daily: We took note that the e-commerce live-streaming for specialties from members of the Shanghai Cooperation Organization (SCO) became a highlight of the 2022 national online shopping festival for the lunar new year. Could you please brief us on the shopping festival? What are the plans for further strengthening SCO trade and economic cooperation?

Gao Feng: In order to reach USD2.3 trillion in China’s cumulative trade with other SCO countries in the next five years as proposed by President Xi Jinping and to increase the supply of high-quality imports to the Chinese market, MOFCOM especially held an e-commerce live-streaming event for specialties from SCO members during the 2022 national online shopping festival for the lunar new year. With the support of Qingdao, Shanghai, Jiangsu, Fujian, Zhejiang and other provinces and cities and well-known domestic e-commerce platforms, we invited the head of the SCO Secretariat and SCO members' ambassadors and envoys in China to the live broadcast to jointly promote quality products from SCO members in the Chinese market. Since the event was launched on January 10, nearly 1,800 live broadcasts of various kinds have been held, with nearly RMB100 million of goods from SCO members sold and more than 4 million viewers involved, effectively enhancing the visibility and market influence of the goods in China.

This event demonstrates the following features:

First, active participation of SCO countries. Over 1,500 categories of featured products from these countries are on sale. The Deputy Secretary-General of the SCO, 14 diplomatic envoys in China, and representatives of those brands joined the live streaming. Through live sessions on respective SCO members, special subjects, Hall Visiting and New Year Greetings, among others, they recommended products to Chinese consumers, and introduced New Year traditions in their countries.

Second, rich local activities. The China-SCO Economic and Trade Cooperation Demonstration Zone in Qingdao held an online shopping festival featuring "A Cheerful New Year with a Taste of SCO" with live sessions of the "SCO Specialty Hall". Tapping into the potential of the CIIE, Shanghai promoted the SCO specialties online, making the products shown in the CIIE more accessible to Chinese consumers. Jiangsu expanded the sales channel with both online and offline promotion. Yiwu in Zhejiang province promoted those brands with its unique advantage in procurement and supply chains.

Third, highlights dot the live-streaming on e-commerce platforms. For the first time, with technical support, live-streaming on multiple platforms was aired simultaneously. SCO specialties are recommended through both online and offline sales channels to ensure a smooth supply chain of hot products.

2021 recorded a trade volume of US$343.1 billion between China and SCO member states, up 40% year-on-year, a record high. Together with the SCO member states, we will continue to uphold the "Shanghai Spirit", implement more economic and trade measures and promote the transformation for digital, green and people-oriented development to facilitate regional economic growth and improve people's well-being. Thank you.

Gao Feng: This concludes today's press conference. The traditional Chinese New Year is around the corner. Please allow me, on behalf of the Information Office of the Ministry of Commerce, to extend thanks to all friends from media for your support and help over the past year. I wish you all the best, and a happy and prosperous Year of the Tiger.

Thank you!

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