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MOFCOM Regular Press Conference (March 17, 2022)

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

First, China's foreign investment cooperation in the first two months of 2022.

In the first two months of 2022, China's outbound non-financial direct investment was RMB100.26 billion, up 0.9% year on year (USD15.78 billion, up 2.7% year on year). Among them, the investment in wholesale and retail sectors reached USD3.49 billion, up 89.7% year-on-year. The investment in scientific research, technical services, transportation and other sectors is also on the rise. Non-financial direct investment in BRI countries reached USD3.16 billion, a year-on-year increase of 3.6%.

In the first two months of this year, the turnover of foreign contracted projects was RMB114.17 billion , down 3.3% year on year (USD17.97 billion, down 1.5% year on year). The newly signed contracts amounted to RMB193.21 billion, down 2.5% year-on-year (equivalent to USD 30.41 billion, down 0.7% year-on-year). There are 137 newly signed projects valued over USD50 million, including 77 projects valued over USD100 million. The turnover of contracted projects in BRI countries was USD10.22 billion, down by 2.6% year-on-year, and the value of newly signed contracts was 17.36 billion, up by 19.1% year-on-year.

So much for the briefing. Now I’d like to take your questions. The floor is open.

China News Service: In the first two months, the actualized foreign investment in China increased by 37.9% year-on-year, a new high despite last year's high base. Could the Ministry of Commerce elaborate on the reasons?

Gao Feng: From January to February this year, the actualized foreign investment in China increased by 37.9% in RMB. These are the main reasons based on our analysis:

First, the fundamentals sustaining China’s positive economic outlook for the long term remain unchanged. Since the beginning of this year, China's economy has continued to recover steadily, production demand has increased rapidly, and consumption has recovered steadily, further enhancing the confidence of foreign investors. The survey reports recently released by the American Chamber of Commerce in China and the German Chamber of Commerce in China show that 83% of American-funded enterprises and 96% of German-funded enterprises continue to be optimistic about the Chinese market, and 66% of American-funded enterprises and 71% of German-funded enterprises plan to increase their investment in China. In the first two months of this year, the actualized investment of the United States and Germany in China increased by 36.4% and 109.1% respectively. Among other major sources of foreign investment, investment from Singapore and the ROK increased by 24.1% and 24% respectively, while investment from BRI countries and ASEAN increased by 27.8% and 25.5% respectively (including investment via free ports).

Second, the effect of the policy on keeping foreign investment stable continues to show. Last year, in response to outstanding concerns of foreign-invested companies, the relevant departments introduced a series of special policies and measures on ensuring the equal participation of domestic and foreign investors in government procurement, supporting foreign R&D centers in enjoying preferential tax policies for the import of scientific and technological innovation, and reducing and exempting personal income tax for foreign individuals, particularly on revising and releasing the new negative list of foreign investment access, and further easing the restrictions on foreign ownership in automobile manufacturing and other sectors, effectively keeping the development expectations of foreign-invested enterprises stable and promoting the strong growth of foreign investment.

Third, China’s business environment has been improving. Since the promulgation of the Foreign Investment Law, we have been reviewing and revising foreign investment laws, regulations, and normative documents. In total, over 200 documents have been formulated or revised, and more than 300 abolished. We continue to strengthen the legal framework for the promotion, protection and administration of foreign investment, implement national treatment for FIEs, and step up protection for the lawful rights and interests of foreign investors. We have also improved service for FIEs. We have optimized the working mechanism for the special task force for key foreign-invested projects and coordinated relevant authorities to enhance service and support, to help address the difficulties encountered by the businesses and facilitate the development of key projects. In January and February this year, the operations of FIEs in China have been stable in general, and paid-in investment in major foreign-invested projects worth over USD100 million increased by 74.3% year-on-year.

China will further expand opening-up on a higher level. We welcome investors from all countries who see China as their next investment destination. We will do more to provide better services for foreign investors and build a business environment that’s based on market principles, governed by law and aligned with international standards. Thank you.

Phoenix TV: What’s MOFCOM’s comment on consumer statistics in the first two months? Will the sporadic resurgence of Covid-19 cases constrain future consumption?

Gao Feng: Since the beginning of this year, China’s consumer market has been recovering steadily. In the first two months, total retail sales of consumer products amounted to RMB7.4 trillion, up 6.7% year-on-year. We have identified the following highlights.

First, basic livelihood consumption remained stable. By category, the retail sales of grain, oil and food, beverage, and daily necessities of enterprises above the designated size went up by 7.9%, 11.4%, and 10.7% respectively. By business type, of all entities above the designated size, convenient stores, which are closely related to everyday life, saw a 12.8% increase in retail sales over the same period last year.

Second, consumption-upgrading goods saw rapid sales growth. the retail sales of gold, silver and jewelries, household appliances, and cultural and office products of enterprises above the designated size increased by 19.5%, 12.7%, and 11.1% respectively. The Beijing 2022 Winter Olympic Games has boosted sales of ice and snow-related products; on some e-commerce platforms, the sales of ice-and-snow sports gears surged by more than 50%.

Third, catering consumption recovered rapidly. revenue of the catering sector increased by 8.9% year-on-year, 2.4 percentage points faster than the retail sales of goods. In particular, revenue of catering enterprises above the designated size expanded by 10.1% year-on-year.

Fourth, New-type consumption grew rapidly. Online retail sales of physical products grew by 12.3% year-on-year, accounting for 22% of the total retail sales of consumer goods. The sales of new energy vehicles expanded by 1.5 times, accounting for 17.9% of new vehicles sold.

Fifth, consumer prices were kept on a stable level. In January and February, the consumer price index went up by 0.9%. In breakdown, food prices went down by 3.8%, and non-food prices rose by 2.1%; the prices of consumer goods increased by 0.6%, and services 1.4%.

The frequent and sporadic domestic resurgence of Covid-19 cases has indeed introduced constraints on consumption recovery in certain areas. Generally speaking, however, the domestic consumer market still demonstrates strong resilience and enormous potential, and the overall trend of structural consumption upgrading remains unchanged. Consumption will continue to recover and grow, as China’s economy sustains steady recovery, and as policies and measures to expand domestic demand, boost consumption begin to deliver. Thank you.

China Radio International: The Federal Communications Commission (FCC) revoked section 214 authorizations issued to Chinese firm Pacific Networks and its wholly-owned subsidiary ComNet. What is MOFCOM’s comment on this?

Gao Feng: China has taken note of related reports. Just as the FCC did to other Chinese telecom firms in the past, the U.S. continues to generalize the concept of national security, abuse state power, and maliciously suppress Chinese telecom firms without factual basis. This goes against the most basic principles of non-discrimination and fair competition, violates internationally-recognized economic and trade rules, disrupts the normal market order, and undermines the legitimate rights and interests of Chinese enterprises and consumers, including U.S. users. China resolutely opposes such practices.

The U.S. should immediately stop its unreasonable suppression of Chinese enterprises and misguided politicization of economic and trade issues to create a stable level playing field for foreign enterprises, including Chinese firms, to operate in the U.S. China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises. Thank you.

China National Radio: The Regional Comprehensive Economic Partnership (RCEP) Agreement will take effect in Malaysia on March 18. Could you brief us on China-Malaysia trade and economic ties? After the RCEP Agreement enters into force, what impact will it have on China-Malaysia trade and economic ties and the regional economy?

Gao Feng: China and Malaysia are important economic and trading partners for each other. China is Malaysia’s largest trading partner. According to Chinese statistics, in 2021, bilateral trade stood at USD176.8 billion, up 34.5% year-on-year. To break this down, China’s exports and imports to Malaysia registered USD78.74 billion and USD98.06 billion respectively, up 39.9% and 30.4% respectively year-on-year. Investment-wise, Malaysia is a crucial investment destination and source for China. According to preliminary statistics, by the end of 2021, China's direct investment in Malaysia had exceeded USD10 billion in cumulative terms, and Malaysia had invested nearly USD8 billion directly in China.

The RCEP Agreement will enter into effect in Malaysia on March 18. Delivering on opening-up commitments and fulfilling rules in various fields in China-Malaysia trade and economic ties will further enhance bilateral trade and investment cooperation, bring more dividends to firms and consumers on both sides, and tap the complementary strengths of and deeply integrate regional industrial and supply chains to make new contribution to regional economic growth. Thank you.

China Daily: In the first two months of this year, the EU surpassed ASEAN to become China’s largest trading partner. What’s MOFCOM’s take on this change and the prospect of China-EU trade?

Gao Feng: In 2021, China-EU trade in goods reached a record high of USD828.1 billion. In the first two months of this year, China-EU trade maintained sound momentum and grew by 14.8% year-on-year to USD137.16 billion, which was USD570 million more than China-ASEAN trade in the same period, making the EU China's largest trading partner in January and February. Whether this was a seasonal development or a trend to stay remains to be further observed. But in any case, it reflects the stronger resilience and dynamism of China-EU trade.

China and the EU are important trading partners with strong economic complementarity, extensive areas of cooperation and great potential for development. China stands ready to work with the EU to actively promote trade and investment liberalization and facilitation, and maintain stable and smooth industrial and supply chains to make the pie of China-EU commercial cooperation bigger and better to the benefit of enterprises and peoples on both sides. Thank you.

MNI:Can MOFCOM give us an update on China’s trade with Russia and Ukraine? 

Gao Feng: China’s trade statistics with Russia and Ukraine have been released by related authorities. China will continue regular trade and economic cooperation with Russia and Ukraine under the principle of mutual respect and mutual benefit. Thank you.

South China Morning Post: U.S. Secretary of Commerce recently said that the US will stay alert to Chinese semi-conductor companies attempting to bypass sanctions against Russia. U.S. National Security Advisor Jake Sullivan also said that China will face consequences if it helps Russia bypass sanctions. Does MOFCOM have any comments? How does MOFCOM evaluate the impact of sanctions against Russia on Chinese businesses? Will there be any measures to ease the impact on businesses?

Gao Feng: China is opposed to any form of unilateral sanctions and long-arm jurisdictions that can find no basis from the international law. Economic sanctions not only fail to address the security issues, but also disrupt the normal life of people in countries concerned and the global market, making things worse for the already sluggish world economy. China will take measures, when necessary, to defend the normal trade and legitimate interests of Chinese businesses. Thank you.

The Cover: In face of the severe COVID-19 situation in many parts of the country, what measures will MOFCOM take to ensure the supply of daily necessities and keep prices stable?

Gao Feng: MOFCOM monitoring statistics show that the daily necessities market has maintained ample supply and stable prices. On March 16, wholesale grain prices in 36 large and medium-sized cities rose by 0.4% from the week before, while the price of cooking oil remained largely the same. Pork and vegetable prices fell by 2.7% and 0.3%.

In face of the frequent report of cases around the country, MOFCOM will strengthen coordination and mobilization with regions concerned, ensure market supply and price monitoring of grain, cooking oil, meat, and vegetables, and other daily necessities, help regions in need with food sourcing through the joint supply and guarantee mechanism. We will provide guidance to commercial distributors to increase supply, match main vegetable producing provinces with consuming provinces, build on the existing sourcing channels to ensure ample supply. Judging from the current situation, daily necessities are in amply supply.

We will closely watch the market supply in key regions with COVID cases, and take timely measures in collaboration with related authorities and local governments. We will work on the last-mile delivery to meet the needs of people living in sealed-off and controlled areas. Thank you.

Gao Feng: Are there 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.)