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MOFCOM Regular Press Conference (June 2, 2022)

Gao Feng: Members of the press, good afternoon. Welcome to MOFCOM Regular Press Conference. With no information to share upfront, I’d like to take your questions. The floor is open for questions.

The Paper: Recently, the Ministry of Commerce, the People’s Bank of China and the State Administration of Foreign Exchange jointly issued the Notice on Improving the Capability of Foreign Trade Companies to Manage Currency Risks, urging local commerce authorities to study and address pressing and thorny issues facing companies in currency hedging and cross-border RMB settlement and increase effective policy supply. What measures will MOFCOM guide local commerce authorities to take in support of companies tackling currency risks?

Gao Feng: In recent years, according to the decisions of the CPC Central Committee and the State Council, MOFCOM, in concert with the PBC and SAFE, has taken multiple measures, such as organizing nationwide online training, launching public courses, compiling manuals and pushing financial institutions to improve products and services to help foreign trade companies increase their awareness and capability of risk hedging with good effect. According to SAFE statistics, the currency hedge ratio of Chinese companies was up 4.6 percentage points year-on-year in 2021 and jumped another 4.2 percentage points from the level of last year in the first quarter of this year.

To help foreign trade companies deal with the difficulties and challenges they are facing, the General Office of the State Council issued the Opinions on Promoting the Stability and Quality of Foreign Trade, spelling out the need to enhance the capability of foreign trade companies to manage currency risks. MOFCOM, the PBC and SAFE promptly followed up with the Notice on Improving the Capability of Foreign Trade Companies to Manage Currency Risks to help foreign trade companies utilize currency hedging tools for sound operation. For the next steps, we will focus on the following aspects.

First, improving products and services by encouraging banks to provide businesses with tailored, optimized products and services to better meet their diversified forex hedging needs and facilitate RMB settlement in cross-border trade and investment. Second, connecting banks and businesses. We will guide local commerce authorities in strengthening cooperation with bank branches, and support banks in providing better one-on-one services, getting more clients signed up for cross-border RMB services and covering more MSMEs through organizing matchmaking events and setting up public service platforms. Third, lowering hedging costs by encouraging local governments to make good use of the special funds for foreign trade and economic ties to provide, in compliance with WTO rules, more public services such as training and consultation on exchange rate risk management. Where conditions permit, local authorities can also explore means such as special credit granting, data-enabled credit enhancement and public security deposits to facilitate the hedging by and reduce the overall cost of enterprises. We will also strengthen training and encourage enterprises to view exchange rate fluctuations objectively and hedge against risks effectively to enhance their resilience. Thank you.

China Business News: Recently MOFCOM held a webinar with foreign-invested enterprises (FIEs) in the electromechanical equipment sector. What is the background of this webinar? What are the outcomes?

Gao Feng: The Chinese government always attaches great importance to the production and operation of FIEs in China. MOFCOM gives full play to the role of the special task force on key foreign-funded projects under the foreign trade and investment coordination mechanism. We have established a regular exchange mechanism with foreign business associations and FIEs to keep abreast of the production and operation of FIEs, solicit their opinions and suggestions, and respond to their concerns and requests.

The webinar held recently by MOFCOM with FIEs in the electromechanical equipment sector was one of our regular exchanges with FIEs. Enterprises attending the webinar are generally optimistic about the development prospects and market space of China's electromechanical equipment sector. Many of them said they would continue to increase investment in China. At the same time, they also expressed requests for resuming work and production on a wider scale, ensuring smooth logistics, and further facilitating the entry of foreign personnel. We will carefully research and address these requests with relevant departments.

Going forward, we will continue to hold regular exchange activities with various FIEs, strengthen contact and communication with foreign business associations and FIEs, work to resolve the difficulties and problems encountered by FIEs in their investment and operation in China, and continuously optimize the market-oriented business environment governed by law and up to international standards. Thank you.

Nihon Keizai Shimbun: U.S. President Biden said in Tokyo last week that he was considering lifting some tariff barriers on China. China always say that the cancellation of additional U.S. tariffs on imports from China is beneficial to the U.S., China and the whole world. How will China respond after the U.S. cancels additional tariffs? Will China remove its tariffs accordingly?

Gao Feng: We have noticed a series of remarks by the U.S. recently about considering lifting additional tariffs on China. China's position on this issue has been consistent. The cancellation of additional tariffs on China is in the interests of not only Chinese and American companies, but also the vast number of American consumers and the whole world. China and the U.S. should pull towards the same direction to create an atmosphere and conditions for bilateral trade and economic cooperation and continuously improve the well-being of the two peoples. Thank you.

Bloomberg: Does China have any plans to hold talks with Australia on tariff issues? What conditions are required for China-Australia economic and trade relations to get back on track?

Gao Feng: In 2021, China-Australia economic cooperation and trade developed steadily, and China remains Australia's largest trading partner of goods, source of import, and export market. According to Chinese statistics, in 2021, the bilateral trade reached about USD231.2 billion, a year-on-year increase of 35.1%. Among them, China’s import was USD164.82 billion, a year-on-year increase of 40.6%.

This year marks the 50th anniversary of the establishment of diplomatic relations between China and Australia. The 50-year development of China-Australia relations shows that economic and trade cooperation is the most active driver for the bilateral relations. The healthy and stable development of China-Australia relations is in the fundamental interests and shows the common aspiration of the two peoples, and is also in the interest of peace, stability and prosperity in Asia-Pacific. It is hoped that the new Australian government can face the critical issues in bilateral relations, treat China and its development objectively and rationally, and do more that is conducive to mutual trust and cooperation between China and Australia, so as to create favorable conditions for the healthy and stable development of bilateral economic and trade relations. Thank you.

Phoenix TV: On May 31, U.S. Secretary of Commerce Gina M. Raimondo said that the Biden administration has been intensifying efforts to investigate the so-called "bad actors" in China and considering adding more Chinese companies to the "blacklist" of U.S. economic sanctions for export control. Raimondo said that the United States would not relax sanctions in the near future, and hoped that America’s allies would also adopt trade restrictions consistent with US export controls. What's the comment of the Ministry of Commerce?

Gao Feng: We have noticed the relevant remarks of the U.S. and China firmly opposes that. In recent years, the United States has used export control as a tool for political crackdown and economic bullying, suppressing and containing other countries' companies, institutions and individuals in a groundless manner, creating difficulties and obstacles for the normal economic and trade cooperation between companies of various countries, including Chinese and American ones, seriously undermining international economic and trade order and trade rules, and seriously threatening the stability of the global industrial and supply chains. China has always opposed overstretching the notion of national security, the wanton use of unilateral sanctions and long-arm jurisdiction, or building various exclusive blocs of export control. We will take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises. Win-win cooperation is the underlying trend of our times and the general expectation of the international community. The U.S. side should immediately stop its wrong practices and do more that is beneficial to global economic stability and recovery. Thank you.

Zhejiang Daily: Just now, Amazon announced that it will close its Kindle e-book service in China. What's the comment of the Ministry of Commerce?

Gao Feng: We have noticed that Amazon has just announced that it will close its Kindle e-book service in China. Objectively speaking, as the second largest consumer market in the world, China's products and services update and upgrade quickly. For all kinds of market players, including foreign-invested enterprises, it is a normal phenomenon in market economy to adjust products and services according to market development trends.

In general, China remains attractive for foreign investment. From January to April of 2022, the paid-in foreign investment in China was RMB478.61 billion, a year-on-year increase of 20.5%, of which the paid-in investment from the U.S. in China increased by 53.2%. Investors from all over the world are welcome to continue to increase their investment in China, bring more new products, new businesses and new services competitive in the market, actively participate in the establishment of a new development paradigm and share China's development dividend. Thank you.

South China Morning Post: The US has recently announced the launch of the US-Taiwan Initiative on 21st-Century Trade, and the plan for the first round of negotiations later this month. What comments do you have at MOFCOM?

Gao Feng: We took note of the so-called US-Taiwan Initiative on 21st-Century Trade and are strongly opposed to it.

The Taiwan question is fundamental to China’s core interests. Any external economic cooperation of the Taiwan region must be predicated on the One-China principle. China, as it always has, oppose official engagement in any form between any country and the Taiwan region, including the negotiation of any trade agreement that is official in nature and carry sovereign implications. The US must take a judicious approach to its trade and economic relationship with the Taiwan region, in keeping with the One-China principle and the provisions of the three China-U.S. joint communiques, international law, and the basic norms governing international relations, and make sure not to send wrong signals to the separatist forces in Taiwan. This is crucial to China-US relations more broadly, and global peace, stability, and prosperity. Thank you.

Gao Feng: If there are no more questions, this is the end of the press conference. Thank you.

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