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MOFCOM Regular Press Conference (August 25, 2022)

Shu Jueting: Friends from the press, good afternoon. Welcome to MOFCOM’s regular press conference. Since I don’t have announcements to make today, we can directly proceed to the Q&A session.

The floor is now open.

Economic Information Daily: The Ministry of Commerce said earlier that, in this year, it will select regions with remarkable achievements in pilot programs on service trade innovation and development, and upgrade and build the national service trade innovation and development demonstration zone. How about the progress?

Shu Jueting: In the past two years, the Ministry of Commerce, together with relevant departments, has guided the pilot areas to focus on key tasks, continue to let innovation take the lead, explore and be a pioneer, with positive results. Up to now, more than 90% of the 122 specific measures proposed in the overall pilot program has been implemented. The State Council approved and agreed to implement five measures to adjust laws and regulations in pilot areas, involving market opening up in areas such as travel, commercial franchising, patent agency services, technology import and export, exhibition, among others, all of which have been implemented, with initial results. Twenty-eight pilot areas have explored a number of institutional innovations in improving the administration system, opening wider to the outside world, offering more convenience, innovating the development model, improving the promotion mechanism, optimizing the policy system, etc. The Office of the Inter-departmental Joint Meeting Mechanism on the Development of Trade in Services of the State Council has successively issued two groups of 33 "best practices" for promotion throughout the country.

In the next step, the Ministry of Commerce, together with relevant departments, will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, take solid steps for the completion of pilot tasks in an all-round way, summarize and promote more achievements in institutional innovation, and ensure the high-quality completion of the pilot work. On this basis, we will pay close attention to formulating and improving the overall plan of the national service trade innovation and development demonstration zone, and the establishment of such demonstration zone. Thank you.

MASTV: The U.S. Department of Commerce announced on August 23 that seven China-related entities, mainly in the space and aeronautics sector, were included to its export entity list. What’s China’s response? Will there be countermeasures?

Shu Jueting: Overstretching the concept of national security, the U.S. has been abusing export control and other measures to suppress and contain foreign businesses with state power, including putting seven Chinese enterprises in its export control “entity list”. China firmly rejects this. The U.S. action severely damages normal trade and economic exchanges and cooperation between Chinese and U.S. businesses, distorts market rules and international trade and economic order, and puts the stability of global industrial and supply chains under grave threats. It is detrimental to China, the U.S., and the rest of the world. The U.S. should immediately stop its wrong measures. China will take necessary countermeasures to safeguard the lawful rights and interests of Chinese businesses and institutions. Thank you.

Shanghai Securities News: It has been three years since the establishment of Lingang Special Area of China (Shanghai) Pilot Free Trade Zone and six other pilot free trade zones (FTZs) in Shandong, Jiangsu, Guangxi, Hebei, Yunnan, and Heilongjiang. What is the progress made over the three years? What are their characteristics?

Shu Jueting: Over the three years since Lingang Special Area of China (Shanghai) Pilot Free Trade Zone and six other pilot FTZs were established, MOFCOM has been working with relevant local authorities and ministries to implement the decisions of the CPC Central Committee and the State Council, as well as their respective master plans and specific pilot programs. So far, the 713 pilot programs under the seven master plans have been basically carried out. Based on their strategic positioning and development objectives, the pilot FTZs have played an exemplar role by launching differentiated and integrated institutional innovation initiatives that have produced a number of in-depth reforms and high-standard opening-up measures. The progress is reflected in the following aspects:

First, investment and trade liberalization-centered institutions in Lingang Special Area. To achieve free investment, trade, financing, transportation and employment, as well as convenient information connectivity, Lingang Special Area has carried out in-depth innovation that has resulted in improving institutions. For instance, in terms of trade, the Yangshan Special Comprehensive Bonded Area was set up with a new customs supervisory model featuring direct release at the territorial border, declaration within the area at the pilot FTZ’s border, and handbook-free administration. In terms of investment and financing, Lingang Special Area is among the first to employ a market entity registration and confirmation system and conduct a pilot program cross-border fund pool integrating the RMB and foreign exchange.

Second, a strong leading role in border opening-up. As China’s first border pilot FTZs areas, Guangxi, Yunnan and Heilongjiang pilot FTZs have centered their reform and exploration around cross-border cooperation, leading to higher-level opening-up and development in the border areas. For instance, in terms of cross-border channels, Guangxi has launched the “Guangxi-Beibu Gulf” service and other sea-rail combined transportation services, which made over 4,100 trips in the first half of this year, up 42%. In terms of cross-border trade, Yunnan has introduced an innovative “Internet Plus Trade between Border Residents” model to enable healthier development of the trade type. In terms of cross-border finance, Heilongjiang has implemented a pilot project of blockchains platform for cross-border finance, helping foreign-related businesses with cross-border utilization of funds and reducing the financing cost.

Third, outstanding progress in differentiated institutional innovation. In light of their respective strategic positioning and unique geographical locations, the pilot FTZs have made differentiated exploration to serve major national strategies. For example, Shandong Pilot FTZ has made high-quality marine economy its development agenda by pursuing integrated development of marine engineering equipment and marine pastures. It has one of China’s highest numbers of confirmed marine pasture platforms. Hebei Pilot FTZ has undertaken in an orderly manner functions relocated from Beijing that are not essential to the city’s role as the capital of China, and established a joint conference mechanism with Beijing Pilot FTZ and Tianjin Pilot FTZ, to build a role model of coordinated development in the Beijing-Tianjin-Hebei region. Shanghai Pilot FTZ, Jiangsu Pilot FTZ and Shandong Pilot FTZ have participated in the building of pilot FTZ alliances in the Yangtze River delta and Yellow River basin, as a step to promote integrated development in the Yangtze River delta and environmental protection and high-quality development in the Yellow River basin.

Fourth, faster agglomeration of characteristic and competitive industries. Based on their resource endowment, the pilot FTZs have facilitated innovation-driven clustering and development of industrial and supply chains. For instance, whole-industrial-chain integrated reform has empowered the biopharmaceutical industry in Jiangsu Pilot FTZ. Nearly 3,000 biopharma companies have been agglomerated over the years, with a total revenue exceeding 250 billion yuan, growing by more than 20% annually.

Over the past three years, Lingang Special Area and the six new pilot FTZs have generated a series of high-level institutional innovation outcomes that are shared within their respective provinces and nationwide, leading to an improving business environment. In the first half of this year, paid-in FDI in Lingang Special Area reached 7 billion yuan, representing a 4.5-fold surge. In the six new pilot FTZs, the trading volume increased by 17.1%, 7.7 percentage points faster than the whole country, and paid-in FDI grew by 23.5%, 6.1 percentage points faster.

In the next step, MOFCOM, together with relevant local governments and ministries, will intensify efforts to plan for and promote deeper-level reform and higher-level opening-up in the pilot FTZs, to achieve high-quality development and contribute more to the building of a new development paradigm. Thank you.

South China Morning Post:At the 25th meeting of China-Russia Economic and Trade Cooperation Sub-committee, the Russian side predicted that the bilateral trade between China and Russia this year might exceed a record high of USD165 billion to USD170 billion, and expressed hope for China to further smooth the transportation at border crossings. What’s MOFCOM’s growth forecast for this year’s China-Russia trade? What will be the next step to promote the development of China-Russia trade, which areas will be the focus, and what measures will be taken to ensure the smooth flow at the border crossings between China and Russia?

Shu Jueting: Since the beginning of this year, China-Russia trade has maintained its growth momentum. We will continue to work with the Russian side to promote normal economic and trade exchanges between the two countries, maintain stability in industrial and supply chains, foster new growth points in areas such as digital economy, green development, biomedicine, and improve both the scale and quality of China-Russia economic and trade relations.

As for transportation at the border crossings, the two sides have coordinated efforts in pandemic response and customs clearance to ensure a normal order at the border crossing between the two countries. This June, the Heihe-Blagoveshchensk highway bridge opened to traffic, creating a new channel of connectivity between the two countries. MOFCOM will continue to cooperate with relevant departments and localities to further smooth customs clearance and logistics transportation while ensuring safety amid the epidemic. Thank you.

CBN: From this January to July, paid-in foreign investment in China increased by 17.3% year-on-year. What are the reasons for the significant investment growth in China by major global economies against the backdrop of world economic downturn?

Shu Jueting: This year, the paid-in foreign investment in China continues to grow, and the Chinese market remains its strong attraction to foreign investors. We believe there are four main reasons:

First, China's comprehensive advantages such as complete industrial system, mega market, social stability and long-term positive economic fundamentals have laid a good foundation for foreign-invested enterprises to develop in China.

Second, the ever-opening market in China provides more opportunities for investment and business development. This year, we implemented a new version of the negative lists for foreign investment market access for nationwide application and for Pilot Free Trade Zones, further easing market access of foreign investors.

Third, we have continuously optimized the business environment, thus enhancing the confidence of foreign-invested enterprises to invest in China. According to the decision and deployment of the Party Central Committee and the State Council, a series of policies and initiatives have been formulated and introduced by localities and relevant departments to stabilize foreign investment and actively respond to the needs of the FIEs, such as business facilitation in China, which has enhanced their sense of fulfillment. Meanwhile, we have organized the removal of regulatory documents that are not in line with the Foreign Investment Law of the PRC, and promoted the repeal, revision and formulation of 520 regulatory documents to further improve the law-based environment for foreign investors. At present, we are actively cooperating with the Standing Committee of the National People's Congress to carry out law enforcement inspection of the Foreign Investment Law, urge the strict implementation of the legal institutions for the promotion, protection and management of foreign investment, and to protect the legitimate rights and interests of foreign investors.

Fourth, we have stepped up efforts in solving difficulties faced by enterprises through services. All localities and departments have firmly implemented the requirements of "epidemic prevention, economic stabilization and development security", and the task force for key foreign-invested projects under the foreign trade and foreign investment coordination mechanism have been playing an active role in establishing and improving the "four mechanisms", including the regular communication mechanism with foreign chambers of commerce and associations, the multilingual information service mechanism for epidemic prevention and control, the express service mechanism, and the rapid response mechanism for epidemic response, in order to help foreign-invested enterprises resume production and operation, and promote the implementation of key projects. The role of large projects in attracting investment has been further developed. Thank you.

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

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