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MOFCOM Regular Press Conference (March 24, 2022)

Shu Jueting: Friends from the press, good afternoon. Welcome to MOFCOM’s regular press conference. Since I don’t have announcements to make today, we can directly proceed to the Q&A session.

The floor is now open.

Shanghai Securities News: This year’s Report on the Work of the Government names “more pilot projects on the extensive opening of the service sector” as a task for 2022. What has MOFCOM done in this respect? Amid the resurging pandemic, China’s service production index increased by 4.2% year-on-year in January and February, 1.2 percentage points faster than December 2021, yet 1.8 percentage points lower than the two-year average in 2021. How have MOFCOM’s supporting policies for catering and other service industries been carried out, and will there be further measures?

Shu Jueting: On your first question: Launching comprehensive pilot projects on greater openness in the services sector is an important plan made by the CPC Central Committee and the State Council to pursue high-standard opening-up. Our exploration in this regard began seven years ago, and a “1+4” paradigm of demonstration pilot programs in Beijing, Tianjin, Shanghai, Hainan and Chongqing has come into place. Together, these programs have provided 35 cases in seven batches for the rest of the country, which serve as valuable experience and possible pathways. In 2021, the added value of the service sector in these five municipalities and provinces registered RMB9.3 trillion, making up 69.6% of their local gross output, which is 16.3 percentage points higher than the national average; their utilized foreign investment in the service sector reached RMB305.29 billion, accounting for 33.7% of the paid-in foreign investment in services and 26.6% of paid-in investment in the whole country. Their leading role is becoming prominent in opening-up and development of China’s service industry.

This year’s Report on the Work of the Government calls for launching more comprehensive pilot projects for greater openness in the services sector. MOFCOM will work under the instructions of the CPC Central committee and the State Council, to advance the new pilot projects in an orderly fashion and introduce pilot measures responding to the latest developments, so as to expand opening-up on a higher level and improve the service sector. Meanwhile, we will continue to carry forward the five existing pilots, summarize innovative outcomes in time, and share them with the rest of the country.

On your second question: In accordance with the plans of the CPC Central Committee and the State Council, 14 departments recently published the Several Policies on Promoting Recovery and Development of Services Industries Facing Difficulties, which includes general measures and supports dedicated to certain sectors to lift them out of difficulties. MOFCOM, with its focus on the catering industry, is expediting the delivery of relevant policies. For instance, we have given guidance to internet platform businesses such as meal delivery on making and implementing specific plans to lower service fees for catering businesses. In the next step, MOFCOM will redouble efforts and work with relevant authorities to expedite the making of measures to implement the supports. In the meantime, we will encourage local authorities to make supporting policies and step up policy communication in due time, to increase awareness and ensure early implementation and progress of these business-benefiting policies. Thank you.

Bloomberg: The Biden administration said Wednesday that it will renew tariff waivers for 352 categories of goods from China. What is the comment of the Ministry of Commerce?

Shu Jueting: China noted that on March 23, the Office of the United States Trade Representative (USTR) announced that it would re-exempt tariffs on 352 items imported from China, which would facilitate the normal trade of related products. China always believes that the additional tariffs that the US has unilaterally imposed on China are not good for China, the US, or the rest of the world. Amid the continued high inflation and challenges for global economic recovery, it is hoped that the United States will act in the fundamental interests of the consumers and producers in China and the United States, remove all additional tariffs on Chinese exports as quickly as possible and bring the bilateral trade and economic relations back on the right track as soon as possible. Thank you.

China Daily: Some analysis believed that the steady growth of imports from January to February was primarily due to the rising prices of imports. What is MOFCOM’s take on this?

According to the Customs statistics, China’s imports reached RMB2.73 trillion for the first two months of this year, growing 12.9% year-on-year. There are three factors contributing to such sustained growth from an already high level of imports of last year. First, China has been firmly committed to opening wider and increasing imports. Second, China’s economy has continued to recover and grow with a stable demand of imports. Third, prices of commodities such as crude oil, natural gas, coal and soybeans have shot up, which to some extend has driven up the growth of imports.

Moving forward, MOFCOM will follow the instructions by the CPC Central Committee and the State Council to make most of the CIIE, the Hainan Expo, the Canton Fair’s import display area, the demonstration zones of import promotion and innovation and other key import platforms, help global premium and featured products to enter the Chinese market and support the importation of energy and resource-related, agricultural and quality consumer products, so as to add new impetus to the world economy. Thank you.

Cover News: The 2021 Report on Micro, Small and Medium-sized Enterprises’ Export (B2B) Index jointly released by the Commercial Sub-Council of the China Council for the Promotion of International Trade and XTransfer suggests that Chinese MSMEs engaging in foreign trade will perform as well as they did in 2021. How do you comment on these companies’ performance so far this year? What measures are adopted by MOFCOM to help MSMEs cope with the uncertainties caused by the pandemic and the high costs of raw materials and commodities?

The CPC Central Committee and the State Council have attached great importance to the sound and sustainable development of MSMEs engaging in foreign trade. Since Covid-19 broke out, a range of policy measures have been introduced to improve the production and operation environment for MSMEs. Since the beginning of this year, despite the uncertainties and destabilizing factors of the pandemic, the changing international landscape and impeded sea transport, China’s foreign trade still got off to a steady start. Nevertheless, based on our surveys on certain localities, MSMEs are faced with challenges in securing orders and honoring contracts.

In response to their difficulties on the ground, MOFCOM has fully implemented the decisions by the CPC Central Committee and the State Council, worked with relevant departments to formulate supportive policies, joined forces to help MSMEs prevent risks, lower costs and enhance vitality. Specifically, in terms of risk prevention, MOFCOM and SINOSURE jointly released a Circular to further support MSMEs with export credit insurance by expanding insurance coverage, lowering insurance costs, optimizing claim settlement regimes and upgrading credit standing services. Regarding cost reduction, we have closely cooperated with the State Administration of Taxation to accelerate the export tax rebate process, improve rebate services, and further alleviate companies’ financial burden. Regarding increasing vitality, we have encouraged financial institutions to enhance their credit support for foreign trade companies, especially for MSMEs, in a law-abiding and risk-controllable manner. Recently, we have also released the Circular on Using the Service Trade Innovation and Development Guidance Fund to Support the Development of New Trade Models and Patterns, encouraging localities to fully leverage the Service Trade Fund and other direct financing instruments, and promoting financial credit insurance institutions to work with the Service Trade Fund to innovate financial services to address the financing difficulties of export-oriented SMEs.

Going forward, MOFCOM will focus on the following efforts to ease the difficulties of micro, small and medium foreign trade firms. Firstly, we will work with related departments and local authorities to implement the package of policy measures introduced last January to ensure stable, smooth industrial and supply chains for foreign trade. Secondly, following the unified plans of the State Council and together with line ministries, we will guide local authorities in optimizing business environment, implementing measures to cut taxes and fees, and continuing to address such issues as the imposition of arbitrary charges and fines with a view to supporting the steady development of foreign trade enterprises. Thirdly, we will guide firms in diversifying imports, enhancing international cooperation, and fostering mutually-beneficial channels for trade in raw materials.

In short, we will take a package of measures to tide foreign trade firms over external uncertainties with policy certainty and help them overcome difficulties and achieve steady, sustained development.

Global Times: According to the EU, a China-EU summit is to be held soon. Will progress be made at the summit in ratifying the China-EU investment agreement and bringing it into force?

Shu Jueting: The China-EU investment agreement is a balanced, high-standard and mutually-beneficial agreement. Its early signature and entry into force are in the common interests of both sides. Since negotiations on the agreement were concluded at the end of 2020, China and the EU have been making technical preparations such as legal scrubbing for the signature and entry into effect of the agreement.

This is an issue of shared interest for both sides. We stand ready to work with the EU to push for the signing and entry into force of the agreement so that it can benefit firms and peoples on both sides at an early date. Thank you.

China Business News: From January to February this year, China’s export of mobile phones and household appliances in cumulative terms fell by 20.6% and 7.9% year-on-year, respectively. Does this mean that exports related to the "stay-at-home economy" are becoming less popular? What is MOFCOM’s comment on this?

Shu Jueting: MOFCOM attaches great importance and pays close attention to the decline in the export volume of mobile phones, household appliances and other products. At present, China's foreign trade development is still facing a complex and challenging situation. Firstly, the world is still suffering from the COVID-19 pandemic. The bottlenecks in global supply chains are yet to be eased, and the shortage of crucial raw materials such as chips continues to plague foreign trade companies. Recently, we have seen frequent local outbreaks of COVID-19 that affected a large number of people in many places, and the industrial and supply chains of foreign trade have suffered to some extent as a result. Secondly, other countries are gradually relaxing COVID controls. Residents overseas are spending less time at home, reducing the demand for products related to the “stay-at-home economy”. Thirdly, recently high geopolitical risks have led to higher commodity prices and greater uncertainties in global economic and trade recovery, dampening consumer confidence overseas .

At the same time, we need to see that China's foreign trade enjoys a solid industrial foundation and resilient industrial and supply chains. In the first two months of this year, China's total imports and exports registered RMB6.2 trillion, a year-on-year increase of 13.3%, and its exports increased by 13.6%, basically off to a steady start. We are confident that, under the strong leadership of the CPC Central Committee and the State Council, and with the joint efforts of various localities, departments and foreign trade enterprises, we will keep this year’s major foreign trade indicators within an appropriate range. Thank you.

China Media Group: Recently, we have noticed that MOFCOM has published a notice on the newly certified list of a line-up of bases for professional and featured services export on its website. We know that at present, there are export bases for culture, traditional Chinese medicine and digital services in China. What are the main considerations for the Ministry of Commerce to set up new bases for professional and featured services export? What's the plan for the next step?

Shu Jueting: The development of bases for featured services export is an important measure to promote high-quality development of China's service trade. On the basis of preliminary work, recently, the Ministry of Commerce and other six departments reviewed and identified a line-up of 40 bases for professional and featured services export in four areas, including human resources, geographic information, intellectual property and language services. Among them, there are 12 bases on human resources services, 9 for intellectual property services, 5 for geographic information services and 14 for language services. To date, China has 112 bases for featured services export in 7 areas, including culture, traditional Chinese medicine, digital services, human resources, geographic information, intellectual property and language services.

Building more bases for featured services export will give full play to the advantages and features of related professional services in China, and cultivate new competitive advantages in service export. It serves more efficient allocation of talent, technology, data and other factors, and the development of new business models of service trade. It is also conducive to opening the professional service sector wider and advancing trade and investment liberalization and facilitation.

In the next step, the Ministry of Commerce, together with the relevant departments, will guide the development of bases for featured services export, study and introduce policies and measures supporting their development, encourage such bases to cultivate internationally competitive market players and service brands for featured services export, promote and expand service export and promote the innovative development of service trade. Thank you.

Shu Jueting: Any other questions? If not, this is the end of the press conference. Thank you all.

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