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Regular Press Conference of MOFCOM (September 22, 2022)

Shu Jueting: Friends from the media, good afternoon. Welcome to MOFCOM’s regular press conference. Before we start, I have an announcement to make.

I. China’s outbound direct investment cooperation, January-August 2022

From January to August 2022, China’s non-financial outbound direct investment (ODI) was RMB492.76 billion, up 7.2% year-on-year (US$75.11 billion, up 5.8% year-on-year). The ODI in leasing and commercial services was US$25.13 billion, up 25.1% year-on-year; the ODI in wholesale and retail business increased by 13% to US$12.91; the ODI in manufacturing, construction and scientific research and technical services also saw growth. China’s non-financial ODI in countries participating in the Belt and Road Initiative (BRI) grew by 8.2% year-on-year to US$13.95 billion, accounting for 18.6% of the total ODI during the same period, 0.54 percentage points higher than last year.

From January to August, the total value of performed overseas project contracts was RMB611.37 billion, up 2.3% year-on-year (US$93.19 billion, up 1% year-on-year), and the total value of newly signed contracts RMB846.17 billion, down 5.9% year-on-year (US$128.98 billion, down 7.2% year-on-year). In the BRI participating countries, the value of performed overseas project contracts and newly signed contracts, standing at US$50.75 billion and US$66.76 billion, accounted for 54.5% and 51.8% of the total sum respectively.

That concludes my announcement. Next, I’d like to take your questions. The floor is open.

China News Service: On September 16, the Summit of Shanghai Cooperation Organization (SCO) was held at the Samarkand International Conference Center. What achievements have this Summit achieved on the economic and trade front? How about the implementation by the Ministry of Commerce in the next step?

Shu Jueting: On September 16 local time, the 22nd Meeting of the Council of Heads of State of the Shanghai Cooperation Organization (SCO) was held in Samarkand. President Xi Jinping delivered an important speech, pointing out that it is important to continue our efforts to achieve the complementarity of the Belt and Road Initiative with national development strategies and regional cooperation initiatives, expand sub-multilateral cooperation and sub-regional cooperation, and create more growth drivers in cooperation. This provides an important guide for SCO member states to deepen regional economic cooperation.

At this meeting, fruitful and practical economic and trade outcomes were reached and a number of statements and documents were released. First, Statement of the Council of Heads of State of the Shanghai Cooperation Organization on Protecting Security, Stability and Diversification of Supply Chains, which agrees to safeguard supply chain stability by developing logistics infrastructure and promoting trade facilitation, etc. Second, the Framework for Cooperation on Trade in Services among SCO Member States, which specifies the principle, area, path and mechanism for cooperation on trade in services. Third, the SCO Infrastructure Development Plan, which emphasizes improving the efficiency of transportation infrastructure and enhancing infrastructure in areas such as smart transportation, green development and tourism. Fourth, the Joint Action Plan for Regional Trade Development of the Shanghai Cooperation Organization for 2023-2025, which agrees to promote trade and investment cooperation, enhance cooperation among business chambers or associations, and discuss streamlining customs procedures, etc.

In addition to the outcome document just mentioned, President Xi Jinping also proposed in his speech that China will hold the SCO Industry and Supply Chain Forum in 2023. This will provide a useful platform for countries in the region to explore how to strengthen cooperation on industrial and supply chains.

At the end of this month, the Ministry of Commerce will host the 21st meeting of economic and trade ministers of SCO member states, earnestly implement the economic and trade consensus reached by President Xi Jinping with leaders of other member states at this Summit, and thoroughly explore practical measures to expand cooperation in the fields of trade and investment liberalization and facilitation, industrial and supply chains, multilateral trading system, digital economy, connectivity and local economic cooperation and trade. China will work with SCO countries to take this Summit as an opportunity to continue to hold high the banner of "Shanghai Spirit", further consolidate the sound momentum of regional economic cooperation, and work together to build a closer SCO community with a shared future. Thank you.

CGTN: On September 21, the European Union Chamber of Commerce in China issued the European Business in China Position Paper 2022/2023, saying that China's attraction to foreign investment has declined, but at the same time, it also indicated that European enterprises still hope to hold on to the Chinese market. What's the comment of the Ministry of Commerce?

Shu Jueting: We have taken note of relevant reports. At present, the world economy is facing multiple challenges, unilateralism and protectionism are on the rise, and the global consensus on opening up has weakened. China has always supported economic globalization, unswervingly expanded high-standard opening-up, accelerated the establishment of a new development paradigm, and provided more market opportunities, investment opportunities and growth opportunities for enterprises of various countries. From January to August this year, China’s paid-in foreign investment was USD138.4 billion, an increase of 20.2%. Among them, EU's investment in China increased by 123.7% (including investment via free ports). This fully demonstrates that foreign investors, including the European Union, continue to show confidence in the Chinese market and hope to continue to deepen investment cooperation with China.

We have also noticed that the Position Paper puts forward the hope that the EU will continue to actively interact with China and oppose economic decoupling. We believe that China and the EU are important economic and trade partners of each other, and we should persist in pragmatic cooperation on the basis of mutual respect, mutual benefit and win-win results. It is in the interests of enterprises and people of both sides to maintain close economic ties and sound interaction between China and Europe. China is willing to continue to strengthen economic and trade policy communication with the European side, maintain security and stability of the industrial and supply chains, promote trade and investment liberalization and facilitation, support true multilateralism, and make joint contribution to global economic recovery. Thank you.

Yicai: The US’s Inflation Reduction Act has become law, which specifies the models of new energy vehicles eligible for tax breaks. For instance, a certain percentage of battery raw materials has to originate in US FTA partners or recycle in North America. Some economies are concerned about the discriminatory elements in the act. What’s MOFCOM’s comment?

Shu Jueting: China expresses its concern about the discriminatory electric vehicle subsidies in the recently passed US Inflation Reduction Law. Related measures condition the subsidies on complete vehicle assembly in North America, which constitutes discrimination against imported like products and allegedly violates the most favored nation and national treatment principles. We have noticed that other WTO members have expressed serious concern about US measures.

The US, a WTO member, should conduct related investment policies in ways compatible with WTO rules to maintain fair play in trade order. China will continue to follow and assess the implementation of the US act and take measures to protect its lawful rights and interests if necessary. Thank you.

CRI: China has always been a staunch supporter, active participant and key contributor of the multilateral trading system. MOFCOM said earlier that China had signed 19 FTAs with 26 countries and regions. Do you have any update? What are the future plans for signing or upgrading the FTAs?

Shu Jueting: Since China’s accession to the WTO over twenty years ago, its FTA circle of friends has kept expanding, with richer contents and rising standards. A global-oriented high-standard FTA network encompassing the Belt and Road regions has largely taken shape. So far, China has signed 19 FTAs with 26 countries and regions., covering Asia, Oceania, Latin America, Europe and Africa. China’s trade with its FTA partners accounts for around 35% of its total foreign trade value.

Moving forward, we will work on expansion, quality and effect when implementing the FTA enhancement strategy to effectively connect domestic and international markets and two sets of resources, provide institutional guarantee for higher-level opening up, and serve the new development paradigm. First, we will further expand the scope. We will actively advance the CPTPP process through consultations and close contact with CPTPP parties. We will vigorously push forward DEPA negotiations for early accession. We will continue to more forward FTA negotiations with the GCC, Ecuador, Nicaragua, Israel, and Norway, the China-Japan-ROK FTA talks and the upgrade to China-ASEAN FTA 3.0, forge FTAs with more willing trading partners, and jointly work towards regional economic integration and trade and investment liberalization and facilitation. Second, we will further raise the standards by increasing the percentage of zero-tariff goods, widening market access for trade in services and investment, and actively taking part in negotiations on digital economy and environmental protection, among other new issues, in a bid to a new open economic system of a higher level. Third, we will further boost real effect. With the entry into force and implementation of RCEP, we will step up FTA communication, promotion and training and enhance the overall utility of FTAs, so that they can benefit businesses and people better and faster. Thank you.

ET Net: US President Biden signed an executive order on the 15th directing CFIUS to intensify review of transactions with specific national security risks. What comments does MOFCOM have? Will it impact Chinese businesses?

Shu Jueting: We noted the development. In recent years, the US has continued to expand the scope of foreign investment review, set more rigorous requirements, and increased the red tape in the review process, under a generalized concept of national security. Such practices impede normal investment and trade flows, growth and employment, harming other countries and the US itself. It’s time for the US to rein in the abuse of security review, and instead foster a fair, stable, and predictable business environment. Thank you.

Macao Asian Satellite TV: German Economic Minister Habeck recently claimed that German naivety toward China is over, and that the Federal Ministry for Economy is drafting new trade policies for China, including intensified investment review, to reduce reliance on the Chinese market and products. What comments does MOFCOM have?

Shu Jueting: China and Germany are important trading and investment partners for each other. In the past 50 years of diplomatic relations jointly steered by the two leaders, the two countries have engaged in open exchanges for shared development, continued to deepen win-win trade and economic cooperation that produced rich fruits and real benefits to the businesses and peoples of the two countries.

At present, industrial chains and supply chains of the two countries are closely intertwined. In the first eight months of this year, China-German trade maintained growth to reach USD155 billion. To date, the two-way investment stock is over USD55 billion. The close economic links between China and Germany is the result of globalization and market laws. The economic complementarity works for businesses and people of both countries, and both sides have benefited from such practical cooperation.

China remains unwavered in advancing high-standard opening-up and will continue to improve market-based, law-based and international business environment, and work to create better conditions to expand trade and economic cooperation with all countries, including Germany. We hope Germany will remain rational and pragmatic in its trade policies with China, listen to the voices of the business community, protect the interests of business cooperation, and refrain from intentionally creating barriers and obstacles. China is ready to work with Germany for win-win and steady development of the trade and economic relations in the long run, and bring more stability and positivity to world economic development. Thank you.

Shu Jueting: Are there any questions? If not, this is the end of the press conference. Thank you.

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