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MOFCOM Regular Press Conference (June 16, 2022)

Shu Jueting: Members of the press, good afternoon. Welcome to MOFCOM’s regular press conference. First, let me share with you some information.

1. China’s service outsourcing from January to May this year

From January to May, 2022, the contract value of service outsourcing undertaken by Chinese enterprises was RMB726.6 billion, with an executed value of RMB466.3 billion, up by 11.9% and 14.6% year-on-year respectively. Among them, the contract value of offshore service outsourcing was RMB412.9 billion, with an executed value of RMB263.9 billion, up by 13.2% and 11.1% year-on-year respectively. (In dollars, from January to May, the contract value of service outsourcing was USD111.8 billion, and the executed value was USD71.8 billion, up by 15.9% and 18.7% year-on-year respectively. Among them, the contract value of offshore service outsourcing was USD63.7 billion, with an executed value of RMB40.7 billion, up by 17.0% and 15.1% year-on-year respectively.)

In terms of business structure, from January to May, the executed value of offshore information technology outsourcing (ITO), business process outsourcing (BPO) and knowledge process outsourcing (KPO) contracts undertaken by Chinese enterprises were RMB115.7 billion, RMB47.7 billion and RMB110.5 billion respectively, up by 3.2%, 11.2% and 21.7% year-on-year.

Region-wise, from January to May, 37 service outsourcing demonstration cities in China undertook offshore service outsourcing contracts worth RMB368.3 billion, with an executed value of RMB241.3 billion, accounting for 89.2% and 91.4% of the national total respectively. The contract value of offshore service outsourcing in the Yangtze River Delta was RMB183 billion, with an executed value of RMB136.1 billion, up by 10.5% and 12.1% year on year respectively, accounting for 44.3% and 51.6% of the national total.

In terms of international market, from January to May, the executed value of offshore service outsourcing undertaken by China from China’s Hong Kong, the United States and the European Union was RMB60.1 billion, RMB51.9 billion and RMB35.2 billion respectively, together accounting for 55.8% 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 RMB63 billion, a year-on-year increase of 8.5%, together accounting for 23.9% of the total executed value of offshore service outsourcing undertaken by China.

In terms of the forms of ownership, from January to May, the executed value of offshore service outsourcing undertaken by private companies was RMB76.6 billion, accounting for 29% of the national total, with a year-on-year increase of 34.6%, 23.5 percentage points higher than the national average growth. The executed value of offshore service outsourcing undertaken by foreign-invested enterprises was RMB123.4 billion, up by 10.3% year on year and accounting for 46.4% of the national total.

In terms of job creation, by the end of May, 2022, China’s service outsourcing had created 14.32 million jobs, with a year-on-yer increase of 8%, including 9.22 million for those with a university degree or above, accounting for 64.4%. From January to May, there were 370,000 new jobs in service outsourcing, a year-on-year increase of 4.8%, including 250,000 for those with a university degree or above, accounting for 66.6%.

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

The floor is open.

CNA: China’s total import and export in May grew by 9.6% year on year, a big rise from April. What factors does MOFCOM think contribute to the increase in growth rate? Can the momentum be sustained?

Shu Jueting: This year, China’s foreign trade got off to a steady start. However, due to multiple external factors, there is increasing pressure on stabilizing growth. Since May this year, foreign traders have gradually resumed production and business, and industrial and supply chains have become more stable and smooth. Efforts to stabilize growth begin to pay off. Under the joint efforts of local governments, relevant ministries and foreign traders, the growth rate of import and export rose to 9.6% in May, showing that China’s foreign trade is on a trajectory of recovery and growth.

China’s foreign trade is still facing some destabilizing factors and uncertainties that cannot be addressed in the near future. The world economic recovery remains fragile, leading to a sluggish external demand. In its latest report, the World Bank slashed the global growth forecast to 2.9% for 2022, far lower than the 4.1% predicted in January. Foreign trade businesses in China are still faced with such challenges as cost, supply chain and logistics.

Despite some difficulties, there are still many enabling conditions for achieving this year’s goal of stabilizing and improving the quality of foreign trade. First, local authorities and government departments are resolutely implementing policies and plans of the CPC Central Committee and the central government to meet the requirements on effectively coordinating COVID-19 response and economic and social development. Production and life are getting back on track with logistical impediments being removed gradually, which will help further tap the strengths of China’s foreign trade. Second, supporting policies have been adopted intensively. The State Council has introduced a package of policies and measures to stabilize the economy and published opinions on stabilizing and improving the quality of foreign trade. It has made further plans to address difficulties facing enterprises in reopening and operating at full capacity, speed up export tax refunding and make ports more efficient. Local authorities and related government departments are implementing these policies and introducing supporting measures. The overlapping of these policies will give a strong boost to foreign trade growth. Third, China has an increasing number of free trade agreement (FTA) partners. The role of FTAs in tax reduction and trade facilitation will also promote foreign trade development. Overall, we are confident of keeping major foreign trade indicators within an appropriate range to contribute to stable macroeconomic fundamentals. Thank you.

China Daily: Facing the complicated developments at home and broad, how will MOFCOM and related departments help enterprises better capitalize on FTAs, especially how will you expedite the release of dividends from the RCEP Agreement?

Shu Jueting: MOFCOM sets great store by improving enterprises’ ability of utilizing FTAs. To help enterprises get familiar with, apply the RCEP Agreement and enjoy more dividends of regional opening-up, we are making the following efforts.

First, stepping up efforts to implement the Guiding Opinions on the High-quality Implementation of the RCEP Agreement. We are further encouraging local governments, various sectors and businesses to seize the development opportunities presented by the RCEP agreement and coordinating different fronts. We are helping businesses adapt to a more open environment and more competition, and expand their regional and global market to tap the benefits of the RCEP Agreement continuously.

Second, vigorously organizing series of training programs on the RCEP Agreement nationwide. On the basis of the three nationwide training programs successfully organized last year, this year we made a reinforced, more targeted whole-year training plan that covers a wider scope to help businesses learn to make good use of the preferential policies in the agreement. To date, four series of training on RCEP have been organized successfully, covering companies around China, including those at and below county level. Over 250,000 trainees attended the training. Going forward, we will continue to make the training courses more professional and targeted by taking into account localities’ and businesses’ requests, cover more MSMEs, and benefit more businesses.

Third, providing companies with good public services. We will give full play to the role of the China FTA Network as a public service platform to publish information and provide online consultancy, and provide one-stop services to make it easier for businesses to search for preferential treatment accorded by agreements, learn rules and information such as nation-specific business climate and IPR services. On top of that, we will tap synergies by encouraging customs authorities, councils for the promotion of international trade and local governments to develop FTA-related public service platforms to provide guidance for businesses on applying for and enjoying tariff concessions and making good use of the rules in the agreements. Thank you.

ITAR-TASS: According to media reports, of the 19 official Huawei stores operated in Russia before the beginning of the Russia-Ukrain conflict, the four stores in Moscow, Novokuznetsk, Ufa and Rostov-on-Don have been closed. What’s MOFCOM’s comment on this?

Shu Jueting: Always committed to developing China-Russia trade and economic cooperation on the basis of mutual benefit, China supports Chinese-funded enterprises in carrying out business activities in Russia in accordance with law and market principles. As for specific issues regarding business operation, we recommend you check with related enterprises. Thanks.

National Business Daily: The recent executive meeting of the State Council proposed to expand the catalogue of manufacturing industries encouraged for foreign investment in the central and western regions of China. How is the work progressing? Are there any new areas included in the latest edition of the Catalogue of Industries Encouraged for Foreign Investment?

Revising and improving the Catalogue of Industries Encouraged for Foreign Investment is an important step for China to open up wider at a high level and make most of foreign investment. Following the instructions of the CPC Central Committee and the State Council, the Ministry of Commerce and the National Development and Reform Commission have worked with relevant departments to expand the Catalogue, and canvassed public opinions on the revised Catalogue from May 10 to June 10. In this revision, we have expanded the areas encouraged for foreign investment with the purpose of moving faster to build the new development paradigm, promoting the high quality development of manufacturing, enhancing the development of the producer services industry, and facilitating the coordinated development of the central and western regions. Particularly, in the central and western regions and northeastern regions, under the instructions of the executive meeting of the State Council and in light of the competitive industries in certain provinces, we have added new or expanded existing entries related to advanced manufacturing, science and technology innovation, modern services and labor-intensive processing trade, etc. We are looking closely at the public opinions with line ministries to further improve the Catalogue so that the revised version can be published as soon as possible. Thank you.

Shanghai Securities News: Since the entry into force the RCEP agreement, trade and investment interactions between China the ROK have grown closer. It’s reported that China-ROK trade will hit a new record in 2022. What measures will be taken by MOFCOM to further unleash the potential of bilateral trade?

China and the ROK are important trading partners of each other. Since the establishment of diplomatic ties 30 years ago, bilateral trade has achieved leapfrog development, exceeding USD360 billion in 2021, a 72-fold surge from what it was 30 years ago. The entry into force of RCEP opens broader space for deeper trade and economic cooperation between the two countries. From January to May this year, the bilateral trade volume amounted to USD152.26 billion, up by 10.2% year-on-year. In the midst of a sluggish global economic recovery, the continued fast-growing bilateral trade speaks volumes about the resilience and potential in their trade and economic cooperation, serving the common interests and development needs of both countries.

China stands ready to work with the ROK to implement the import consensus by the leaders of the two countries, carry out the joint plan for economic and trade cooperation for the 2021-2025 period, unleash the cooperation potential in such emerging areas as green development and digital economy, promote high-quality RCEP implementation and enhance trade and investment facilitation, as part of our efforts to push for the sound and steady development of China-ROK commercial relations. Thank you.

Shenzhen TV: A recently published survey on EU companies in China suggests that most EU companies operating in China have benefited from their local innovation and R&D activities and still see China as a promising base for innovation and R&D. What is China’s comment on that?

We’ve noted the report. Innovation is part and parcel of China’s new development philosophy and a major driver for high-quality economic development. China is pursuing the strategy of innovation-driven development, the result of which China jumped from 34th to 12th from the year 2012 to 2021 in the ranking of the Global Innovation Index. This achievement is also attributed to the contributions of businesses, including those from Europe, who have engaged in China’s opening-up and innovation-driven development and enjoyed win-win outcomes. China will stay committed to high-level opening-up, step up protection of IP and keep improving the business environment and the environment for innovation. We welcome companies from the EU and the rest of the world to invest and carry out business in China, increase R&D input and set up R&D centers in China, so as to share in the dividends of the Chinese market.

If there are no more questions, 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.)