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MOFCOM Regular Press Conference (July 7, 2022)

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

First, on trade in services this year till May.

From January to May, China’s trade in services continued to grow steadily. Services imports and exports totaled RMB 2365.36 billion, up 22% year-on-year. In breakdown, exports stood at RMB 1151.79 billion, up 26.3%; imports registered RMB 1213.57 billion, up 18.2%. Export growth beat import growth by 8.1 percentage points, pushing down services trade deficit by 46% to RMB 61.78 billion. May saw services imports and exports grow by 22.2% year-on-year to RMB 456.28 billion. The main characteristics are as follows.

First, knowledge-intensive services trade grew steadily. From January to May, knowledge-intensive services imports and exports stood at RMB 988.67 billion, up 10%. Of these, exports reported RMB 560.24 billion, up 13.6%. Telecommunications, computer and information services and other commercial services were among the fastest growing sectors, up 18.5% and 13.2% respectively. Imports were up 5.6%, hitting RMB 428.43 billion. Insurance services grew the fastest, up 74.2%.

Second, travel services imports and exports rebounded moderately. From January to May, travel services imports and exports reached RMB 330.84 billion, up 7.7%. Travel services excluded, China’s services imports and exports were up 24.7% from January to May. In breakdown, exports were up 28.1% and imports, 20.8%. Compared to the same period of 2019, services imports and exports grew by 49%, with exports up 65.2% and imports up 32.8%.

So much for the upfront information. Now I would like to take your questions.

The floor is open to questions.

National Business Daily: The 2nd China International Consumer Products Expo will be held in Haikou this month. What are the highlights and features? What role will it play in the recovery of consumption market and improvement of consumption growth potentials?

Shu Jueting: Themed ‘Share Open Opportunities, Co-create a Better Life’, the 2nd China International Consumer Products Expo will be held in Haikou, Hainan Province from July 26-30. This Hainan Expo features ‘two highs and one more’. To be specific,

High enthusiasm. Following its successful debut, the Hainan Expo draws wide attention from home and abroad. The 2nd session has overtaken the first one in terms of the numbers of participating companies and brands, with the exhibition area expanded from 80,000 m2 to 100,000 m2. Over 40,000 buyers are expected to attend.

High international participation. The exhibition area of overseas companies has increased from 75% to 80% of the total. In particular, Japan, France and the US will each cover around 3000 m2. RCEP members see their exhibition area grow by nearly 20% compared to the inaugural edition.

More events. Apart from six key official events, premium think tanks, intermediary agencies and industry organizations will stage 100 plus side events around hot topics such as new models, new business types, and new consumption, country (region) cooperation hotspots, and new opportunities for consumption in Hainan Free Trade Port, and publish related reports or indices on consumption and the development of Hainan FTP.

Hainan Expo will pool quality consumer product resources from home and abroad and provide a display and trading platform for premium consumer goods, which will help to optimize supply structure, improve supply quality, guide green, healthy, quality and lifestyle consumption, foster new consumption trends and demand, and advance the development of Hainan into an international tourism and consumption center and the Hainan FTP. By hosting the Expo and other consumption promotion events, we aim to accelerate the recovery and sustain the growth of domestic consumption market to better leverage consumption as an engine of economic circulation. Thank you.

Reuters: Chinese Vice Premier Liu He had a conference call with the U.S. Treasury Secretary Janet Yellen this week. Could you brief us on what they discussed? How will the trade and economic teams of the two sides arrange their future work and what is the expected progress?

In the morning of July 5, Vice Premier Liu He held a conference call with Treasury Secretary Yellen. The two sides had practical and candid exchanges of views on a number of issues such as the macro economy and stability of global industrial and supply chains. The discussion has been constructive. Both sides agreed that it carries great significance in strengthening China-U.S. macroeconomic policy communication as the world economy is facing grim challenges. Working together to maintain the stability of global industrial and supply chains serves the interests of China, the U.S. and the world. China registered its concerns over such issues as removing the U.S. sanctions and additional tariffs on Chinese goods, and fair treatment to Chinese companies. The trade and economic teams of the two sides agreed to keep in close contact, fully implement the consensus of the principals, step up communication on macroeconomic policies, and push for practical cooperation on trade and economy. We will keep you updated if new information is available. Thank you.

China Business News: In the second half this year, high inflation rates and high commodity prices caused by the conflict between Russia and Ukraine would still have an impact on the global economic outlook. What is your assessment on the prospect of China’s foreign trade in the second half of 2022 and your suggestions to foreign trade companies?

Since the beginning of this year, our foreign trade has maintained stability despite pressure from home and abroad. From January to May this year, our total imports and exports grew by 8.3% year-on-year in RMB terms, and is expected to keep a relatively high growth rate in June.

Based on our recent surveys in some localities, industries and enterprises, we will face increasing uncertainties and destabilizing factors in the second half of 2022, indicating a grim and complex situation for foreign trade. Externally, due to geopolitical conflicts and tightened monetary policies by some developed economies, the global economy is likely to slow down, overshadowing the growth prospect of trade. Domestically, the base figure of foreign trade has been greatly raised, and comprehensive costs for businesses remain high, which will make it hard for companies to win new orders and expand markets.

That said, we still enjoy multiple favorable conditions for steady increases in both the volume and quality of imports and exports for the whole year. First, China has a solid foundation for foreign trade, which guarantees its fundamentals sustaining long-term growth. Second, polices aimed at stabilizing foreign trade have taken effect. Local governments have further balanced Covid-19 prevention and control and economic and social development, kept refining policy measures and unleashed the vitality of foreign trade companies. Third, new energy and other industries have maintained a sound momentum, and are expected to keep contributing to the overall growth.

Moving forward, MOFCOM will work with local governments and line ministries to implement the policy measures to stabilize foreign trade, sustain our efforts in ensuring smooth trade, increasing fiscal and financial support, helping companies get more orders and expand markets, and stabilizing industrial and supply chains for foreign trade. We will continue to support companies in making most of relevant policies and measures for their steady and sound development. Specifically, first, we will help companies lower comprehensive costs, utilize export credit insurance tools to enhance their capability of securing orders and fulfilling contract obligations. Second, we will support companies in participating in exhibitions to consolidate traditional markets and existing clients, and explore new markets. Third, we will encourage companies to enhance the ability to make innovations, stay responsive to the changing needs of foreign consumers, and work to increase the quality of foreign trade. Thank you.

International Business News: Will MOFCOM introduce measures to boost consumption in the second half of this year?

Shu Jueting: China’s domestic consumption has been recovering since May. In the next step, MOFCOM will firmly implement the decisions of the CPC Central Committee and the State Council to coordinate Covid--19 response and consumption promotion, carry out policies and measures that have been introduced to stabilize growth and stimulate consumption, and foster sustained momentum in consumption recovery. Our focus will be on the following areas:

First, stabilize spending on big-ticket items. Recently, MOFCOM and other relevant authorities have jointly published several measures to encourage automobile distribution and expand consumption of cars. These policies include supporting the purchase and use of new energy vehicles (NEVs), further activating the second-hand car market, boosting car upgrading, promoting sustainable and sound development of car parallel import, creating better conditions for car use, and diversifying car-related financial services. In the next step, we will work with relevant authorities to present and implement these policies to see that they are swiftly implemented with real results. At the same time, we will work with relevant authorities to encourage spending on NEVs and green building materials in the rural areas and urge local authorities to boost consumption of green and smart home appliances in rural areas and replacement of old appliances with new purchases, where conditions permit.

Second, improve consumption platforms. We will expedite cultivation and development of international consumption center cities and intensify promotion efforts after releasing the first batch of typical experience and practices of cultivation and development. To boost urban consumption, we will strive for high-quality development of pedestrian shopping streets, advance demonstration projects of smart business circles and smart shops, develop 15-minute community service circles. To increase rural consumption, we will move faster to build county-level commercial systems, extend supply chains, delivery services, and goods and services to the rural areas, and bring agricultural products to cities.

Third, launch consumption promotion events. With effective Covid-19 response measures in place, we will organize key events including the China International Consumer Products Expo, International Shopping Season, and China Cuisine Festival, and guide local authorities to hold extensive consumption promotion activities based on their respective conditions, so as to creative an active atmosphere, boost confidence, and tap into potential of consumption. Thank you.

Bloomberg: It is reported that U.S. president Joe Biden’s team is looking into options regarding tariffs on Chinese exports to the U.S. If the U.S. reduces or cancels such tariffs, will China take equivalent measures? Has MOFCOM been evaluating how this development may influence China’s import and export? There are also reports that the U.S. will begin a new round of investigation on China’s industrial subsidies. What’s MOFCOM’s comments?

We have taken notice of relevant reports. China always believe that removing all additional tariffs on China is beneficial not only to China and the U.S., but the whole world at large. Many think tanks and research institutions in China and the U.S. have estimated that eliminating all additional tariffs on China would exert substantial effect on lowering the U.S.’s domestic inflation. With high inflation lingering on, the sooner the U.S. cancels these additional tariffs, the sooner U.S. consumers and businesses can benefit from it. China and the U.S. should move in the same direction and work together to create an atmosphere and conditions for trade and economic cooperation, safeguard stability of global trade, industrial chains and supply chains, and benefit the people of the two countries as well as the rest of the world.

The U.S.’s accusations on Chinese industrial subsidies are completely inconsistent with facts. Since accession to the WTO, China has faithfully fulfilled its accession commitments and abided by the obligations of the WTO’s Agreement on Subsidies and Countervailing Measures in removing all prohibited subsidies. As for other subsidies allowed under WTO rules, China has maintained levels and forms that are consistent with WTO regulations. China has always opposed trade protectionist approaches such as investigations under Section 301. We urge the U.S. to not introduce new trade measures. Thank you.

ShangHai Securities News: In June, the Ministry of Commerce, together with 12 departments including the Publicity Department of the CPC Central Committee and the National Development and Reform Commission, organized the 2022 National Month for the Promotion of Business Integrity. Could you brief on the main outcomes and features of this event?

Shu Jueting: The Month for the Promotion of Business Integrity aims to promote an honest business culture, promote business integrity of various industries and market players. It is an important measure to implement the important instructions on social credit system by the CPC Central Committee and the State Council, and also an important platform to promote the development of the business credit system.

This year is the 18th year of the Month for the Promotion of Business Integrity, with the theme of "Promoting Business Integrity with You and Me". During the month of promotion, the Ministry of Commerce and other departments organized 19 thematic publicity activities, such as "Business Integrity for Industries and People", "Business Integrity, Central Government Enterprises Taking the Lead" and "Trustworthy Consumption and Quality Life", which received wide attention. This month of promotion has three outstanding features:

First, focusing on serving micro, small, and medium enterprises. Focusing on the bottlenecks and difficulties faced by micro, small, and medium enterprises in credit financing under the new circumstances, with the themes of strengthening the development of credit to optimize business environment, and creating a "credit plus" financing model to facilitate the development of micro, small, and medium enterprises, we offered special reports, and exchanged and shared credit financing cases, and organized matchmaking between small and medium-sized enterprises and financial institutions to allow them signing contracts on the spot.

Second, focusing on strengthening departmental cooperation. This month of promotion is jointly organized by the Ministry of Commerce and other 12 departments, including the Publicity Department of the CPC Central Committee. For the first time, it has offered thematic publicity activities by working with the State-owned Assets Supervision and Administration Commission of the State Council, giving full play to the demonstration role of central government enterprises and taking the lead in building a good market environment of promoting business integrity.

Third, rich and varied ways of publicity. During the month of promotion, all kinds of media actively offered relevant publicity and media coverage. Through the production and broadcasting of advertisements for public welfare, sharing publicity pamphlets, online thematic activities and other ways, the concept of business integrity became more popular.

In the next step, we will continue to deepen cooperation between departments, promote the development of business credit system, strengthen publicity of business integrity, actively guide trade associations, chambers of commerce and various market players in strengthening business integrity and self-discipline, and widely mobilize the public to participate in relevant activities to jointly build an honest business environment. Thank you.

Shu Jueting: Is there any question? If not, this is the end of today’s press conference. Thank you.

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