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MOFCOM Regular Press Conference (April 14, 2022)

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

I. China’s FDI in the first quarter of this year

In the first three months of this year, China's FDI grew rapidly year-on-year with a steady start, showing the following features:

First, China’s FDI achieved a double-digit growth. The paid-in FDI in China was RMB379.87 billion, a YoY increase of 25.6% (equivalent to USD59.09 billion, a YoY increase of 31.7%; excluding banking, securities and insurance, same below).

Second, the investment in high-tech industries increased rapidly. The paid-in FDI for hi-tech industries reached RMB132.83 billion, up by 52.9%, among which, high-tech manufacturing increased by 35.7% and high-tech services by 57.8%.

Third, an all-around increase for FDI in eastern, central and western China, which increased by 23.4%, 60.7% and 21.9% respectively. Twenty-one provinces, autonomous regions and municipalities in China achieved a double-digit growth in paid-in FDI.

China’s service outsourcing in the first quarter of this year

From January to March, 2022, the contract value of service outsourcing undertaken by Chinese enterprises was RMB488.1 billion, with an executed value of RMB318.5 billion, up by 10.3% and 17.2% year on year respectively. Among them, the contract value of offshore service outsourcing was RMB264.8 billion, with an executed value of RMB172.8 billion, up by 4.6% and 12.1% year on year respectively. (In dollars, from January to March, the contract value of service outsourcing was USD74.9 billion, and the executed value was USD48.9 billion, up by 14.5% and 22.0% year on year respectively. Among them, the contract value of offshore service outsourcing was USD40.7 billion, with an executed value of RMB26.5 billion, up by 8.1% and 16.8% year on year respectively.)

In terms of business structure, from January to March, the executed value of offshore information technology outsourcing (ITO) contracts undertaken by Chinese enterprises was RMB71.8 billion, a slight decrease of 0.5% over the same period last year. The executed value of business process outsourcing (BPO) and knowledge process outsourcing (KPO) contracts were RMB34.1 billion and RMB66.9 billion respectively, up by 11.3% and 30.2% year on year.

Region-wise, from January to March, 37 service outsourcing demonstration cities in China undertook offshore service outsourcing contracts worth RMB238.8 billion, with an executed value of RMB157.6 billion, accounting for 90.2% and 91.2% of the national total respectively. The contract value of offshore service outsourcing in the Yangtze River Delta was RMB120.3 billion, with an executed value of RMB91.5 billion, up by 11.6% and 17.7% year on year respectively, accounting for 45.4% and 52.9% of the national total.

In terms of international market, from January to March, the executed value of offshore service outsourcing undertaken by China from China’s Hong Kong, the United States and the European Union was RMB42.4 billion, RMB34.9 billion and RMB22.3 billion respectively, together accounting for 57.6% of the executed value of China’s offshore service outsourcing. The executed value of offshore service outsourcing undertaken by China from RCEP member countries was RMB38.2 billion, a year-on-year increase of 3.2%, together accounting for 22.1% of the total executed value of offshore service outsourcing undertaken by China.

In terms of the forms of ownership, from January to March, the executed value of offshore service outsourcing undertaken by private companies was RMB50.5 billion, accounting for 29.2% of the national total, with a year-on-year increase of 42.9%, 30.8 percentage points higher than the national average growth. The executed value of offshore service outsourcing undertaken by foreign-invested enterprises was RMB80.1 billion, accounting for 46.4% of the national total.

In terms of job creation, by the end of March, 2022, China's service outsourcing had created 14.22 million jobs, including 9.15 million for those with a university degree or above, accounting for 64.3%. From January to March, there were 260,000 new jobs in service outsourcing, a year-on-year increase of 13.1%, including 170,000 for those with a university degree or above, accounting for 64.7%.

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

China Daily: In the first quarter, China's imports and exports increased by 10.7% year-on-year, still maintaining a double-digit growth. However, COVID-19 has been spreading around China recently. How does MOFCOM view the development of foreign trade going forward?

Shu Jueting: Since the beginning of this year, under the strong leadership of the CPC Central Committee and the State Council, China's foreign trade has withstood the pressure from the complicated economic circumstances both at home and abroad. In the first quarter, China’s imports and exports increased by 10.7% year-on-year to RMB9.42 trillion, off to a good start and laying a sound foundation for achieving the targets for the year.

However, we are also soberly aware that the environment for foreign trade development is becoming more challenging and complicated and risks and challenges abound. Internationally, bottlenecks in global supply chains are yet to be alleviated. Inflationary pressures are rising, major economies are tightening their monetary policies, and global economic and trade growth have slowed down. On April 12, the WTO lowered its forecasts for global economic and trade growth in 2022 by 1.3 and 1.7 percentage points, respectively. At home, recently, frequent local COVID-19 outbreaks in many places have undermined the production and operation of some foreign trade enterprises and hindered logistics and transport, resulting in impediments in supply chains in the Yangtze River Delta, Pearl River Delta and other regions, as well as high overall costs for enterprises.

That said, China’s foreign trade has a strong industrial foundation. The fundamentals underpinning long-term growth remain unchanged. There are still many favorable conditions for achieving the goal of maintaining stability in and improving the quality of import and export. MOFCOM will continue to pay close attention to related developments, ensure effective implementation of the policies introduced to stabilize foreign trade, research effective new policies, and work with relevant departments to fulfill all the requirements in the State Council inter-agency task force’s circular on ensuring smooth freight transport and logistics. We will eliminate bottlenecks, tackle pains and difficulties, and make every effort to keep foreign trade industrial and supply chains stable and smooth to tide foreign trade enterprises over and keep this year’s major trade indicators within an appropriate range. Thanks.

China Business News: Recently, the US-China Business Council (USCBC) released US Export Report 2022, which says China remains an important export destination for the US, and trade with China has created a great number of jobs for America. What is MOFCOM’s comment on this?

Shu Jueting: China has taken note of the report released by the USCBC, which says that US goods exports to China in 2021 hit an all-time high. The report also estimates that in 2020, US exports to China supported about 860,000 jobs in many industrial areas in the US.

Facts once again show that China-US economic and trade relations are mutually-beneficial and win-win in nature, and the two sides have huge potential for greater trade cooperation. The steady, healthy development of business ties between China and US, the world's two largest economies, is not only in the fundamental interests of the two countries and peoples, but also conducive to the stability of global industrial and supply chains and world economic recovery. It is hoped that the US will cancel the additional tariffs on imports from China and sanctions against Chinese companies as soon as possible so as to create favorable conditions and atmosphere for greater cooperation. Thanks.

CMG: Recently, MOFCOM held a symposium with foreign-invested enterprises involved in the automobile industrial chain. How did participating FIEs see China’s business environment and market prospect in the future?

On March 31, MOFCOM held a symposium with FIEs involved in the automobile industrial chain to understand their current business operations and policy demands. Participating FIEs pointed to three aspects regarding their observations on China’s business environment and market potential. First, they had full confidence in the future growth of the Chinese market. Some businesses said that production output and sales of the automobile market in China increased by 3.4% and 3.8% respectively despite chip shortage and the spread of Covid-19 in 2021. They also highlighted the outstanding performance of new energy vehicles (NEV) with both output and sales exceeding 3.5 million, up by 1.6 times compared to the same period of last year. Being optimistic of China’s long-term prospect of stable growth, many enterprises still saw China as one of the most important overseas markets. Second, FIEs welcomed China’s policy of expanding opening-up. Many business leaders said that the negative list for foreign investment market access introduced last year removed foreign equity cap for the car manufacturing sector, thus opening up broader space for foreign automobile companies’ development in China. They also found China’s commitment to opening-up very encouraging. Third, FIEs were strongly interested in China’s economic development strategies. Many believed that the innovative and green development philosophy China is pursuing now would facilitate automobile FIEs to follow through the electrification strategy, and they would invest more in NEV manufacturing and technology R&D in China.

At the symposium, some companies also offered recommendations and raised concerns on ensuring unimpeded logistics and stable industrial and supply chains, strengthening communication in policy-making and promoting international cooperation and exchanges on industrial standards, etc.

Moving forward, MOFCOM will work with relevant departments to keep stepping up communication with FIEs to timely address their difficulties and better support their development in China. We believe that our open and mega-sized market will create more opportunities for foreign companies to grow in China. Thank you.

Economic Information Daily: According to some Chinese companies, their foreign business partners have asked them to take a stand against Russia’s military operations in Ukraine, otherwise their business cooperation would be affected. How do you comment on that?

Since the conflicts between Russia and Ukraine began, relevant countries have imposed sanctions on Russia, which has disturbed the normal trade and economic activities between China and Russia. Some foreign companies have forced Chinese companies to choose a side, which is against market trading principles. We’d like to reiterate that China has always been firmly opposed to unilateral sanctions and long-arm jurisdictions that can find no basis from the international law and are not authorized by the UN Security Council. China also opposes improperly prohibiting or restricting Chinese companies from conducting normal business activities with companies from other countries.

According to the Foreign Trade Law and other relevant laws and regulations, to preserve a fair and free foreign trade order, relevant companies and individuals shall not give in to external coercion to take an improper stand. China will take necessary measures to resolutely protect the lawful rights and interests of Chinese companies. Thank you.

CNR: The 131st China Import and Export Fair will be held online from April 15 to 24. What will be done to strengthen matchmaking between buyers and suppliers? Will hosting Canton Fair online affect transactions?

Shu Jueting: Online exhibitions embraces the trend of digital economy and is a practical option against the backdrop of Covid-19. Moving Canton Fair online breaks the restraint of time and distance and allows 24 hours non-stop exhibition and communication, which is more convenient and cost-effective. Buyers and exhibitors can do business from across the world and develop their market share at home and abroad without travelling around. The 131st Canton Fair draws on experience of previous sessions, responds to demands of exhibitors and buyers and continuously serves as a bridge between buyers and suppliers.

First, optimizing platform system. The 131st Canton Fair has comprehensively adjusted the technical lower layer framework of the online platform and fundamentally improved the functions so that the platform is more stable, smooth and responsive.

Second, strengthening supplier-buyer matchmaking. The 131st Canton Fair online platform has a new function of supplier-buyer matchmaking with three new breakthroughs. One, more accurate search results. For the first time, enterprises and products are tagged as specialized, high-tech, green or intelligent to help buyers find exhibitors and exhibits accurately and quickly. Two, instant communication. With buyers’ authorization, exhibitors can check buyer information, get their business cards and initiate instant messaging so that the two sides can have smooth communication online. Three, more effective matchmaking. 50 “Trade Bridge” Virtual Promotion Events and 8 “Discover Canton Fair with Bee and Honey” activities will be held to connect China’s key industrial clusters and brand companies with top multinational and professional buyers.

Third, improving services. Trade in services of multiple business forms are improved. Based on trade in services such as customs, freight forwarding, finance, insurance, certification, and design, new services such as China-Europe trains, shipping, cross-border e-commerce and overseas warehouses are introduced to encourage businesses to improve the trade ecosystem. We will also strengthen training and guide for exhibitors and audience, offer services to exhibitors and buyers through social media, short videos, around-the-clock intelligent customer service and video training sessions to enhance online participation of businesses. Thank you.

CNBC: Since the outbreak of Covid-19, it has become increasingly difficult for foreign companies in China to invite high-tech professionals and senior management personnel to work in China. More employees are ready to leave China given the concentrated quarantine in places like Shanghai and mounting uncertainties, which makes operation in China more difficult. What is MOFCOM’s response?

Shu Jueting: The recent Covid-19 cases appeared in many places in China, with broad coverage and frequent occurrences, affecting production and operation of both domestic and foreign companies in China. The Chinese government takes this very seriously. Under the foreign trade and foreign investment coordination mechanism, we set up a special task force for key foreign investment projects. MOFCOM has worked together with relevant departments and local governments to help companies address difficulties and challenges, especially the foreign-invested enterprises in the epicenter. We have coordinated and addressed such issues as production assumption, entry into China for personnel, logistics and transportation. Some of these difficulties have been alleviated.

Going forward, we will follow the situation of the pandemic, further leverage the role of the foreign investment task force, and work together with relevant departments and localities to respond to FIEs’ demands, and help them overcome difficulties and get operation back on track. Thank you.

Shu Jueting: Any more questions? If you have no more questions, that’s all for today’s press conference. Thank you!



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