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MOFCOM Regular Press Conference (August 18, 2022)

Shu Jueting: Members of the press, good afternoon. Welcome to MOFCOM’s regular press conference. To start with, I have two announcements to make.

First, on China’s FDI utilization from January to July this year

From January to July 2022, the paid-in FDI in China reached RMB798.33 billion, a year-on-year increase of 17.3% (same below), equivalent to USD123.92 billion, up by 21.5%.

In terms of industry, the paid-in FDI for services was RMB598.92 billion, up by 10%. The paid-in FDI for high-tech industries grew by 32.1%. In breakdown, the paid-in FDI for high-tech manufacturing and services increased by 33% and 31.8% respectively.

In terms of the source of FDI, the paid-in FDI from Korea, the US, Japan and Germany rose by 44.5%, 36.3%, 26.9% and 23.5% respectively (including investment via free ports).

In terms of regional distribution, the paid-in FDI in eastern, central and western China increased by 15.2%, 30% and 41.2% respectively.

Second, on China’s outward investment and cooperation from January to July this year

In the first seven months of 2022, China’s non-financial outward direct investment increased 4.4% year-on-year to RMB424.28 billion (equivalent to USD65.06 billion, up by 3.6% year-on-year). In breakdown, the investment in leasing and commercial services grew by 24.5% year-on-year to USD22.38 billion. The investment in wholesale and retail, manufacturing, construction and other areas also increased. Non-financial direct investment in BRI countries reached USD11.87 billion, a year-on-year increase of 5.1%, accounting for 18.2% of the total.

From January to July, the turnover of foreign contracted projects was RMB530.26 billion, up 4.4% year-on-year (equivalent to USD81.31 billion, up by 3.6% year-on-year). The value of newly signed contracts amounted to RMB741.78 billion, down by 7% year-on-year (equivalent to USD113.75 billion, down by 7.7% year-on-year). The turnover of contracted projects and the total value of the newly signed contracts with BRI countries stood at USD44.14 billion and USD57.27 billion respectively, accounting for 54.3% and 50.4% of the total.

So much for the briefing. Now I would like to take your questions. The floor is open.

International Business Daily: Recently, Hainan, Xinjing, Tibet and some other places have been fighting outbreaks of Covid-19. What measures has the Ministry of Commerce taken to ensure the supply of daily necessities for local residents? What is the situation with the supply of essential goods, especially food in those regions?

Shu Jueting: Since the outbreaks in Hainan, Tibet and Xinjiang, among other places, MOFCOM has taken swift steps to contact the local commerce authorities and closely follow the developments of the supply of essential goods in the regions. Based on the needs of localities, we have actively transported goods across regions, solved relevant problems and ensured the stable supply of daily necessities in the Covid hot spots. We have done the following things.

First, we have helped local commerce authorities to fully ensure the supply of daily necessities. We have helped Hainan, Tibet and Xinjiang, among other places with Covid-19 outbreaks to draw on the experience of other localities in strengthening coordination of sources of supply, ensuring unblocked transportation, creating close loops for people, vehicles, routes and management and providing last-mile distribution in the regions.

Second, we have ensured joint supply for severely-hit regions. We have coordinated relevant provinces centered around Hainan, Tibet and Xinjiang in providing supplies whenever necessary. Henan, Shandong, Sichuan, Yunnan, Gansu and Qinghai have teamed up with Tibet and Xinjiang to connect the two autonomous regions with production bases and sources of supply and worked to solve cross-region transportation and logistics problems. Under the nine-province joint supply mechanism, six major suppliers from Mianyang, Yibing and Luzhou in Sichuan province have built a capacity of providing 15,000 to 20,000 parcels of two to three types of vegetables every day whenever Hainan needs assistance. Port cities of Maoming and Zhanjiang in Guangzhou province have prepared the supply of fast food for Hainan.

Third, we have helped Hainan obtain emergency supplies. MOFCOM wasted no time coordinating Guangzhou, Hubei, Chongqing, Guizhou, Guangxi and Yunnan in distribution of emergency supplies including 100,000 sets of foldable beds, blankets, pillows, and toiletries kits.

Fourth, we have helped ensure cross-region transportation. Faced with issues such as mutual recognition of vehicle passes and unsmooth transportation of fresh products, MOFCOM has guided local commerce authorities in ensuring the movement of vehicles and worked to solve the problems through the leading group office for smooth logistics under the State Council.

According to our monitoring, Hainan, Tibet, Xinjiang and other places have sufficient rice, flour, edible oil, meat, eggs, milk, fast food and other essential goods, which are available at stable prices. In terms of vegetables, a top-of-mind issue for residents, the current commercial stock of vegetables in Hainan is about 6,750 tons, among which about 1,200 to 1,300 tons of come from Hainan itself and nearly 3,500 tons are transported from other provinces every day. Tibet’s commercial stock of vegetables is 2,120 tons, together with over 1,000 tons of fruits and vegetables that can reach the autonomous region in three days. Xinjiang’s commercial stock of vegetables is 20,000 tons, among which about 10,000 tons are from within the region and 1,500 tons of vegetables transported from other provinces every day. From the perspective of the total stock, the market supply can be ensured. At the same time, the relevant places have strengthened the distribution through online ordering and point-to-point delivery, and gradually alleviated the shortage of vegetables and other issues for people quarantined at home in high-risk regions.

Next, we will continue to closely track the changes in market supply in the areas affected by Covid-19. MOFCOM will act swiftly in collaboration with relevant departments and localities to take targeted steps in the face of the new situation and issues and fully ensure the market supply of essential goods. Thank you.

CBN: Recently, the United States passed the CHIPS and Science Act. Some lawyers believe that the financial subsidy for chip manufacturing in the Act could constitute prohibited subsidy or actionable subsidy, and its "guardrail clause" could also violate the WTO rules on MFN and national treatment. What is the comment of the Ministry of Commerce?

Shu Jueting: The introduction of the CHIPS and Science Act by the United States provides huge subsidies and tax incentives to its domestic chip industry, which is a typical way to promote differential industrial policies. Some of its provisions limit the normal economic, trade and investment activities of relevant companies in China, which are clearly discriminatory. They seriously violate the market rules and international economic and trade rules, and will distort the global semiconductor supply chain and disrupt international trade. China firmly opposes that. The implementation of the U.S. Act should comply with the relevant WTO rules and the principles of openness, transparency and non-discrimination. It should be conducive to maintaining the security and stability of global industrial and supply chains and avoiding fragmentation. China will continue to follow the implementation of the Act and take effective measures to safeguard China’s legitimate rights and interests when necessary. Thank you.

21st Century Business Herald: The growth rate of China's foreign trade continues to rise. In July, the import and export increased by 16.6% year-on-year. What is the comment of the Ministry of Commerce on this and what measures have been taken to keep foreign trade stable?

Shu Jueting: From January to July, China's total import and export reached RMB23.6 trillion, a year-on-year increase of 10.4%. Foreign trade shows strong resilience and makes positive contribution to the smooth operation of the national economy.

Since the beginning of this year, in the face of complex and challenging environment for foreign trade development, the Ministry of Commerce has resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council. In accordance with the requirements of sound COVID response and pursuing stable and safe economic development, MOFCOM has taken multiple measures together with the localities and relevant departments to keep foreign trade stable, with the following five priorities: First, implementing policies for real results. We will thoroughly implement a package of policies and measures to keep the economy stable, promote the introduction of supporting measures by relevant departments, guide the localities to step up their implementation according to local conditions, enhance policy publicity, so that the intended effect of policies will be unleashed faster. Second, ensuring production and operation. We will give full play to the work mechanism of keeping foreign trade stable and the work mechanism of ensuring logistics run smooth and unimpeded, both at all levels, strengthen the safeguard for the production and operation of foreign trade enterprises, and remove key obstacles to logistics in time. Third, reducing costs and increasing efficiency. We will increase the support of export credit insurance, streamline procedures and reduce costs for import and export, and help foreign trade enterprises create new growth momentum and vitality and reduce pressure. Fourth, expanding market and securing orders. We will give full play to the positive role of the working groups on unimpeded trade and the signed FTAs, and guide enterprises in exploring the international market in a targeted manner. We will guide local and key industry associations to optimize the online exhibition model, and help enterprises expand new markets and secure new orders. Fifth, focusing on innovation and development of trade. We will continue to promote the development and growth of new trade forms and models and encourage innovative, green and high value-added products to explore the international market.

At present, China's foreign trade development still faces many challenges. The growth prospects of major economies are not optimistic, the willingness for spending is insufficient, the expansion of external demand is slowing down, and it is difficult for enterprises to obtain orders. At the same time, domestic and international logistics still need to further improve efficiency and the supply and industrial chains need to be kept stable. The Ministry of Commerce, together with the localities and relevant departments, will continue to promote the implementation of policies, foster new growth drivers of foreign trade, strive to reduce the negative impact of COVID-19 on the development of foreign trade, actively expand increment, prevent reduction, and strengthen the guarantee, and do everything we can to ensure steady and high-quality growth in foreign trade, so as to make greater contribution to maintaining stable macroeconomic performance. Thank you.

Phoenix TV: The U.S. Department of Commerce announced a few days ago that it will impose export control on four technologies, such as EDA software. What's the comment of the Ministry of Commerce?

Shu Jueting: China takes note of the relevant announcements issued by the U.S. The United States continues to generalize the concept of national security and abuse export control measures. These relevant practices deviate from the principle of fair competition and violate international economic and trade rules, which will surely hinder international scientific and technological exchanges and economic and trade cooperation, and threaten the security and stability of global industrial and supply chains. Amid the current world economic slowdown and high inflation, the countries should intensify open cooperation, jointly create an open, fair, just and non-discriminatory environment for scientific and technological development, promote global scientific and technological progress and achievement sharing, and add impetus to the stable development of the world economy. Thank you.

The Cover: There have been reports of COVID-19 cases in Yiwu, Zhejiang province recently. Does it have an impact on the operation of local e-commerce? What measures will the commerce authorities take to ease the impact?

Shu Jueting: The COVID-19 outbreak in Yiwu since August has created difficulties for the normal operation of local e-commerce, restricting the movement of people and goods, disrupting the production, consolidation, transport, customs declaration, etc., putting some companies under risks of default. To help the companies address the difficulties, the local commerce authorities have acted quickly to provide stronger support and remove the barriers in the logistics channels. The measures they have taken include: create a fast complaint passage for truck divers if their health codes turn yellow or red for unknown reasons, make full use of the white list of key foreign trade companies, implement company-specific policies for key businesses, support closed-loop production by well-equipped businesses. With regard to delivery delays due to the pandemic, MOFCOM has requested local commerce authorities to coordinate the e-commerce platforms to respond to the situation. On the one hand, we encourage the platforms to be flexible with the evaluation criteria, such as shipments and services, make exemptions proactively or allow the merchants to apply for exemptions, and open up complaint channels to protect the legitimate interests of merchants. On the other hand, we encourage the affected stores to make public announcements, enhance communication with consumers and clients to ensure the consumers are fully informed and offered different options.

We will closely watch the impact of COVID-19 outbreak in Yiwu and play a coordinating role to address the difficulties and meet the needs of the businesses. We will also support and guide local commerce authorities in balancing epidemic control and economic and social development, so that businesses can resume normal operation soon. Thank you.

South China Morning Post: The USTR has recently announced the launch of formal negotiations under the US-Taiwan Initiative on 21st Century Trade, and the plan to hold the first round of talks in early autumn this year. Does MOFCOM have any comments? How are the communications between Chinese and US trade and economic teams going?

Shu Jueting: We noted the announcement by the US to commence trade talks under the so-called US-Taiwan Initiative on 21st Century Trade and the so-called negotiating mandates. China expresses opposition in the strongest terms.

External economic cooperation of the Taiwan region must be predicated on the One China principle. China has all along opposed the official engagement in any form between any country and the Taiwan region, including negotiating and concluding agreements with sovereignty implications or official in nature. The Taiwan question is the most important and sensitive core issue in China-US relations. It’s imperative that the US abide by the One China principle and the provisions of the three joint communiques, honor the commitment of US leaders that the US does not support Taiwan independence, take a judicious approach to the trade and economic relations with Taiwan, and fully respect China’s core interests. This is critical to China-US trade and economic relations and China-US relations more broadly, and to global peace, stability and prosperity. China will take any measures as necessitated by the situation to safeguard our sovereignty, security and developmental interests. Thank you.

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

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