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MOFCOM Regular Press Conference (February 24, 2022)

Dear friends from the press, good afternoon. Welcome to the regular press conference of MOFCOM. With no announcement to make today, I’d like to open the floor for questions.

The floor is open.

Economic Daily: Recently, MOFCOM and China Export & Credit Insurance Corporation (Sinosure) jointly issued the Notice on Expansion of Export Credit Insurance Support for Effectively Performing Cross-Cyclical Adjustment to Further Stabilize Foreign Trade, identifying export credit insurance as an effective means to stabilize foreign trade. Facing such dire and complex external environment, what measures will be taken to harness export credit insurance for steady development of foreign trade?

Gao Feng: Export credit insurance is an internationally recognized instrument to promote trade that is consistent with WTO rules. It plays a key role in stabilizing foreign trade and investment.

At present, China’s foreign trade is still confronted with multiple uncertainties and destabilizing factors. Following the instructions by the CPC Central Committee and the State Council, MOFCOM will work with Sinosure to build on the efforts of previous policy measures to fully support export credit insurance in providing risk guarantee and enhancing credibility, step up coordination between local commercial departments and Sinosure’s branches, introduce targeted supportive measures in light of specific conditions of different localities, work to effectively implement various measures, so that foreign trade companies are better positioned to guard against risks in a more targeted manner and confident in their growth. We will focus on the following aspects:

First, increase support of export credit insurance for micro, small and medium-sized enterprises (MSMEs), include more MSMEs into the insurance scheme, specifically lower their insurance costs and optimize services concerning claim settlement and recovery. Second, step up insurance acceptance for new business models of foreign trade including cross-border e-commerce and overseas warehouses, strengthen innovation in product models, and provide customized services for enterprises. Third, enlarge the insurance coverage of industrial chains, further refine services for the niche areas of industrial chains, fully leverage the role of domestic trade credit insurance in expanding domestic demand, and facilitate the integrated development of domestic and foreign trade. Fourth, keep enhancing short-term insurance policy financing, support MSMEs in a targeted manner through combined approaches such as “government+bank+insurance” and “re-lending+policy financing”, so as to use insurance policies to enhance credibility and ease the financing difficulties for enterprises. Thank you.

Red Star News: Recently, as a result of the outbreak of COVID-19 in Suzhou Industrial Park, some companies are closed, which affected the electronics industry and caused the public to worry about the supply shortage. What measures does the Ministry of Commerce take to help enterprises in the park resume production? How to ensure that the supply chain is stable and smooth?

Gao Feng: As far as we know, the impact of this round of the epidemic on Suzhou Industrial Park is by and large under control, and the production and operation of most companies have not been affected. We will pay close attention to the development of COVID-19 in Suzhou, actively help enterprises coordinate and resolve practical difficulties such as logistics, sanitizing, and detection, and facilitate local governments in making overall arrangements for businesses affected by the epidemic to resume production as soon as possible, on the premise of ensuring that the epidemic is under control. Thank you.

Economic Information Daily: Fourteen ministries recently published Several Policies for Recovery and Development of Services Industries Facing Difficulties, which includes special supports for catering. How does MOFCOM assess the situation of these industries facing difficulties, and how will MOFCOM implement these policies?

Gao Feng: Catering is key to final consumption and employment. Thus, it bears significance for stabilizing growth, boosting consumption, creating jobs, and improving people’s livelihood. Due to the Covid-19 pandemic, catering businesses are faced with increasing pressure that comes from reduced footfall and rising costs. Small- and medium-sized businesses are facing particularly grave difficulties, as they are less capable of resisting risks.

The CPC Central Committee and the State Council pay great attention to the recovery and development of the catering industry. The Several Policies for Recovery and Development of Services Industries Facing Difficulties, jointly published by 14 ministries, includes ten general policies and seven special policies tailored for catering. In the next step, MOFCOM will work with relevant authorities to expedite introduction of measures to implement the supports, while encouraging local authorities to make and enforce supporting policies in time and addressing challenges and impediments of policy enforcement, so that the businesses can benefit from them and the industries can recover and grow. Thank you.

The Cover: The EU filed a case at the WTO’s dispute settlement mechanism over China’s practices in patent lawsuits. Will China take any action?

Gao Feng: China and the EU have been in communication and cooperation in this regard. We regret that the EU has brought the issue to the WTO’s dispute settlement.

China will stay in contact with the EU and protect its own lawful rights and interests in accordance with WTO rules. Meanwhile, China will continue to strengthen IP protection as always and effectively safeguard innovation-driven development of all types of market entities. Thank you.

China Business News: As RMB exchange rates are going strong, what’s MOFCOM’s recommendations to foreign trade companies on enhancing their ability to overcome exchange rate risks?

Gao Feng: Exchange rate adjustments exert multi-dimensional influence over foreign trade companies’ business operations, affecting their bargaining power and cost-effectiveness. With increasing bidirectional volatility of RMB exchange rate in recent years, MOFCOM has worked with relevant authorities to take a series of measures, including enhancing policy awareness, compiling risk aversion manuals, launching open courses, and encouraging financial institutions to optimize products and services, to help companies effectively bolster their awareness and ability to avert exchange rate risks. According to the State Administration of Foreign Exchange, the enterprises’ hedge ration increased by 4.6 percentage points in 2021 compared with the previous year, representing increasing awareness of foreign exchange risk aversion.

In the next step, MOFCOM will continue to work with relevant authorities to encourage financial institutions to diversify risk aversion services, while helping companies adapt to bidirectional RMB exchange rate volatility and build up risk resistance. Thank you.

China Media Group: According to a recent report of the Asian Development Bank, thanks to China's resilient post-COVID export, intra-regional trade links and the deepening of regional value chains in the Asia-Pacific region are not weakened. What is the comment of the Ministry of Commerce?

Gao Feng: Strengthening intra-regional trade cooperation in the Asia-Pacific enjoys unique advantages and good momentum. First, the factor resources are abundant and the market scale is huge. The Asia-Pacific region has a large population, different resource endowments, strong economic complementarity and convenient connectivity. As economic globalization deepens, with the accelerated flow of capital, technology, labor and other factors, the Asia-Pacific region has become the most dynamic and promising economic powerhouse globally. Since the COVID-19 outbreak, Asia-Pacific countries have supported each other, with growing trade and closer cooperation on industrial chain, showing strong development resilience and potential, making the region an important engine of world economic growth. Second, the trade creation effect of the Regional Comprehensive Economic Partnership Agreement. After the RCEP Agreement comes into effect, over 90 percent of the goods in the region will eventually trade at zero tariff. Uniform rules on rules of origin, customs procedures, inspection and quarantine, among others, have gradually been launched; the intra-regional trade cost has been significantly reduced; the level of trade facilitation will be further improved; and it will be more efficient to promote cooperation on industrial chain and supply chain.

China stands ready to work with other countries in the Asia-Pacific region to continue to strengthen cooperation against COVID-19, fully unleash the potential of trade and investment cooperation, jointly safeguard the stability of industrial chain and supply chain, promote common development in the Asia-Pacific region and make Asia-Pacific contribution to world economic recovery. Thank you.

Gao Feng: Any other questions? If not, this is the end of the press conference. Thank you.

(All information published on this website is authentic in Chinese. English is provided for reference only.)