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MOFCOM Regular Press Conference (January 6, 2023)

Shu Jueting: Friends from the press, happy new year! Welcome to the first regular press conference of MOFCOM in 2023. I’d like to start with a briefing.

I. China's service trade from January to November, 2022

From January to November 2022, China's service trade continued to grow. The total import and export of services were RMB5,404.61 billion (RMB, same below), a year-on-year increase of 15.6%. In breakdown, the service export was RMB2,583.5 billion, up by 15.5%; the import was RMB2,821.11 billion, up by 15.6%; and the deficit was RMB237.62 billion. The main features are as follows:

Trade in knowledge-intensive services grew steadily. From January to November, the import and export of knowledge-intensive services was RMB2,248.64 billion, an increase of 10.1%. Among them, the export of knowledge-intensive services was RMB1,262.99 billion, an increase of 13.4%. The areas with faster export growth were telecommunications, computer and information services, and IP royalties, which increased by 15.5% and 15.3% respectively. The import of knowledge-intensive services was RMB985.65 billion, an increase of 6.1%, and the area of faster import growth was insurance service, with a growth rate of 51.5%.

The import and export of travel services continued to recover. From January to November, the import and export of travel services amounted to RMB758.05 billion, an increase of 8.2%. Excluding travel services, the import and export of services increased by 16.9% from January to November, of which export increased by 16.4% and import by 17.5%. Compared with the same period in 2019, the import and export of services increased by 51.1%, of which exports increased by 65.7% and imports by 36.8%.

So much about my briefing. The floor is now open to questions.

The floor is open.

Phonenix TV: How about consumption during the New Year's Day holiday? How about the prospect of consumption recovery?

Shu Jueting: Recently, with the continuous optimization and adjustment of COVID prevention and control measures, residents have travelled more and on-site consumption have gradually grown. In 2023, the consumer market recovered in an orderly manner during the New Year's Day holiday, as the supply of daily necessities was sufficient in general, and the prices were basically stable.

First, the sales of popular goods grew steadily. Driven by the festive atmosphere and various promotional activities, consumption of residents for daily needs grew steadily, and the demand for goods for the new year and daily necessities picked up. On the New Year's Day holiday, the sales of grain, oil, food, beverages and daily necessities of retail enterprises followed by the Ministry of Commerce increased by 11.3%, 10.2% and 2.6% respectively.

Second, consumption in services has been recovering. Restaurants are reopening to the public. Catering businesses use online and on-site sale to meet the diversified needs of consumers. Ice & snow consumption is gaining momentum, and various New Year celebration activities became popular. Cross-provincial and long-distance trips surged, demonstrated by rising occupancy and booking rates of hotels in major tourist destinations. Statistics show that during the New Year holiday, total box office exceeded 550 million yuan, and 85% of the cinemas were open, breaking a 10-month record.

Third, online consumption grew rapidly. MOFCOM and competent authorities have provided guidance for the 2023 National Online New Year Shopping Festival. According to our statistics, during the first five days of the shopping festival, online retail sales amounted to 208 billion yuan, up 4.7% from the previous session last year. Gift packs, health products and nutrients, and imported fresh food saw fast sales growth. New business modes and models such as live commerce and instant delivery enjoyed unlocked momentum.

Fourth, markets of daily necessities remained stable. Compared with before the holiday, replenishment of grain, edible oil, meat, eggs and vegetable was higher in 100 large grocery wholesale markets nationwide; the prices of grain, edible oil, beef and mutton were on a par; the prices of pork, chicken and eggs decreased slightly; and the average wholesale price of 30 kinds of vegetables increased by 1.5%.

During the New Year holiday and the upcoming Spring Festival, consumers’ enthusiasm is returning as Covid-19 response measures continue to optimize, work and life are returning to normalcy, and on-site consumption is coming back at a faster pace. MOFCOM will work with related authorities and local governments to implement the decisions of the central conference for economic work by prioritizing the restoration and expansion of consumer spending and work on detailed policies and measures to boost consumption. Generally speaking, domestic consumption needs will gradually build up, and steady recovery of consumption is expected to sustain. Thank you.

China Business News: AmCham China and many other foreign chambers of commerce in China have welcomed China’s reopening. What are the comments of FIEs on the optimization of Covid-19 response? How will this affect China’s business environment?

Shu Jueting: Since the pandemic broke out, the Chinese government has upheld the belief that the people come first, and life matters most. It has adjusted response measures in accordance with the changing situations and effectively coordinated both disease containment and economic and social development. In this process, MOFCOM has followed closely the business operations of FIEs in China. Fully using the special task force for key foreign-invested projects under the coordinating mechanism for foreign trade and foreign investment, MOFCOM has maintained targeted, regular exchanges with FIEs and foreign chambers of commerce to address problems and difficulties FIEs encounter due to the pandemic and support their business activities as much as possible.

Recently, the special task-force has carried out one-on-one surveys on related foreign-invested enterprises and multiple foreign chambers of commerce on the 20-point rules, the new 10-point rules and the downgrade to Category B response, among other Covid measures. China’s proactive optimization and adjustment of Covid response measures are broadly well-received by FIEs and foreign chambers of commerce, which laud the measures as ‘very timely and encouraging’, ‘an effective solution to the travel of foreign employees to China’, and ‘reassuring for their future development in China’. Many of them indicate they are planning executive trips to China to actively reboot related projects and seek new investment opportunities.

For the next steps, we will continue to expand market access for foreign investors, enforce national treatment for FIEs, step up protection for their legitimate rights and interests, and further facilitate their investment in China, in a bid to create a market-oriented, law-based and world-class business environment for all to share in China’s development opportunities. Thank you.

National Business Daily: We noticed that MOFCOM recently abolished the registration system for foreign trade operators, providing further facilitation to foreign trade companies. What are the background and significance of the policy?

Shu Jueting: On December 30, 2022, the 38th Session of the Standing Committee of the 13th National People’s Congress voted through the decision to amend the foreign trade law, which removed the registration system for foreign trade operators in Article 9. This is a major reform of the administration of foreign trade operators and significant institutional innovation of the Chinese government to press ahead with trade liberalization and facilitation.

The foreign trade operating right is a basic right the state grants to foreign trade operators. Starting from 2004, the foreign trade operating right was administered through a registration system. Related market entities could become foreign trade operators by completing the registration process. To further improve the business environment, in October 2019, the 14th Session of the Standing Committee of the 13th National People’s Congress passed the decision to mandate the State Council to temporarily adjust the application of Article 9 of the foreign trade law in Pilot Free Trade Zones and abolish the registration system in a trial period of three years. Following a rounded summary and assessment of the experience of the three-year pilot, we believe that the conditions and timing are ripe for abolishing the registration system nationwide. The abolition will further optimize the business environment, unleash innovation in foreign trade, and promote the high-quality development and high-standard opening-up of trade.

At present, following the decisions and plans of the CPC Central Committee and the State Council, MOFCOM is guiding the transition of local commerce authorities following the abolition. We will continue to strengthen departmental collaboration and information sharing to stay up to speed on business operations, improve analysis of foreign trade dynamics, and improve trade policy measures to continuously enhance trade facilitation and high-quality trade development.

The Cover: President Marcos of the Philippines has just concluded his state visit to China. Can you share with us the achievements in trade and economic cooperation between the two countries over the past years?

Shu Jueting: China and the Philippines are close neighbors with long-standing friendship. In their recent meeting, President Xi Jinping and President Marcos pointed the way forward for bilateral cooperation. In recent years, bilateral trade and economic cooperation has been fruitful under the strategic guidance of the two Presidents.

By the end of 2021, China had been the largest trading partner of the Philippines for six years in a row and jumped to its second largest export market. China is also the third largest market for Philippine agricultural exports. In the first eleven months of 2022, trade between the two countries reached USD80.41 billion, up 8.3%. At the 5th CIIE, the Philippines added 240 m2 of exhibition area and 19 exhibitors compared with the previous year. It has become the largest source for banana and pineapple imports into China. Its coconuts, avocados, and frozen fruits have also entered the Chinese market. Fresh durian will soon be exported to China.

Chinese businesses have engaged in effective investment cooperation with the Philippines. Philippine statistics show that investment agreements with Chinese companies totaled USD2.9 billion from 2016 to 2021, covering service outsourcing, logistics, agriculture, steel, and communications and demonstrating great vitality.

Going forward, MOFCOM will work with Philippine authorities to implement the common understandings of the two Presidents by increasing imports of quality goods from the Philippines, supporting business investments to the Philippines, aligning China’s Belt and Road Initiative and the Philippines’ Build Build Build program, expanding cooperation into new areas, such as green economy and the digital economy, and advancing the “Two Countries, Twin Parks” project in tandem. We believe these efforts will bring bilateral trade and investment to a new level. Thank you.

Zhejiang Daily: How does MOFCOM view the prospect of the auto market? What measures will be taken to stimulate auto consumption?

Shu Jueting: The auto industry is a pillar to the national economy and an important driver of domestic demand and consumption. As the auto market began to contract sharply last year, the CPC Central Committee and the State Council have rolled out timely measures to bolster the auto market. To implement these measures, MOFCOM has worked with 16 departments to introduce initiatives for auto trading and consumption. Sub-national governments have also drafted measures accordingly, including raising the extra quota of licence plates, offering auto replacement subsidies in over 20 provinces and cities, and lifting the bar on pickup trucks from the urban area. From August 1, 2022, the applicable regions have scrapped the restrictions on cross-region transfers of used cars with China V emission standards. From October 1, used car dealerships can issue invoices. The measures to support large-scale, well-regulated, and professional trading of used cars, effective since January 1, 2023, will further transform and upgrade the auto industry, and enhance trading and consumption integrity of used cars.

As a series of policies yield effects, automobile consumption has rebounded rapidly. From July to November 2022, automobile sales increased by 15.7% year-on-year, up 22.3 percentage points compared with that of the first half of this year. In the first 11 months, automobile sales increased by 3.3% year-on-year. Among them, the sales volume of new energy vehicles doubled that of the last year, maintaining a rapid growth trend.

Recently, the automobile consumption market has fluctuated to some extent, and the expansion of automobile consumption faces certain pressure due to the Covid-19 epidemic and the withdrawal of support policies. However, it should be noted that China's economy enjoys strong resilience, great potential and sufficient vitality. The Covid-19 response has been continuously optimized. This year, the overall economy is expected to rebound, providing strong support for the steady increase of automobile consumption. Considering various factors, it is predicted that the overall market of automobile consumption will maintain the growth momentum in 2023.

Going forward, MOFCOM, together with related departments, will take multiple measures to continuously stabilize and increase automobile consumption. First, we will focus on the implementation of policies. We will intensify supervision over the implementation of policy documents on automobile consumption, promote local good experiences and practices in a timely manner, and ensure that policies are effectively implemented. Second, we will improve related measures. We will work with related parties to study the policies and measures to increase the circulation of second-hand cars, support the consumption of new energy vehicles, and promote the scrapping and renewal of old cars. Efforts will be made to address the hindrance and difficulties of automobile circulation and promote the tiered consumption and circular consumption of automobiles. Third, we will focus on environmental optimization. We will cooperate with related departments to support the construction of charging facilities and parking facilities, improve the financial services of automobile consumption, and continuously optimize the environment for automobile consumption. Fourth, we will focus on improving the institutions. The revision of the Measures for the Administration of the Circulation of Second-hand Automobiles and the Standards on Compulsory Scrapping of Motor Vehicles will be stepped up to promote the sustained and healthy development of the automobile consumption market. Thank you.

China Radio International: Recently, The Ministry of Production, Foreign Trade, Investments and Fisheries of Ecuador released a message, noting that Ecuador and China have concluded bilateral free trade negotiations at the technical level. President Guillermo Lasso sent a congratulatory tweet. Could you please brief us on the latest developments of China-Ecuador FTA negotiations?

Shu Jueting: In February 2022, President Xi Jinping met with Ecuadorian President Lasso during his visit to China. After the meeting, China and Ecuador issued a joint statement announcing the launch of FTA negotiations. Thanks to the joint efforts of both sides, preliminary consensuses have been reached at the technical level after over 10 months of intensive consultations. The two sides are stepping up their domestic procedures and working to announce the conclusion of the negotiations as soon as possible. We believe that the China-Ecuador FTA will contribute to the sustained, stable and diversified development of trade and investment between the two countries, and the greater development of bilateral trade and economic cooperation. Thank you.

Economic Information Daily: We have noted that the Ministry of Commerce, the Ministry of Culture and Tourism and the National Cultural Heritage Administration jointly issued the notice on promoting consumption of China time-honored brands by better coupling China Time-honored Brands with historical and cultural resources. To this end, what steps will MOFCOM take?

Shu Jueting: The China Time-honored Brands are the pacesetters of Chinese industrial and commercial development, which embody a mix of the fine tradition of Chinese culture, reminiscences of the hustle and bustle of life, and rich economic and cultural value, thus popular among consumers. As Chinese trendy brands consumption continue to increase, the China Time-honored Brands have also gained more popularity. Over the past New Year’s Day holiday, online consumption of these brands rose by 30% year-on-year.

Recently, the Ministry of Commerce, the Ministry of Culture and Tourism and the National Cultural Heritage Administration jointly issued the notice on promoting consumption of China time-honored brands by better coupling China Time-honored Brands with historical and cultural resources. The purpose is to further tap into the historical and cultural value of these brands, fully leverage their advantage of closeness to everyday life, and provide more goods that are both rich in Chinese culture and fashionable to better meet consumers’ diverse demands for quality goods.

We will take the following steps. First, we will couple the China Time-honored Brands with historical resources. We will step up protection of the 12,000 cultural heritages owned by the over 1,100 existing China Time-honored Brands. We will support brand-holders in enhancing productivity and quality by employing advanced technologies on the basis of carrying forward traditional techniques. Second, we will couple the China Time-honored Brands with cultural experience. We will support brand-holders in tapping into cultural tourism resources and creating a distinct business form through activities to showcase culture, pass on techniques, and bring experience to customers. Third, we will couple the China Time-honored Brands with consumer demands. According to the monitoring of relevant e-commerce platforms, during this year’s 11.11 shopping festival, 50 China Time-honored Brands registered a transaction value of over 10 million yuan respectively and another 15 created a value of over 100 million yuan. We will continue to encourage brand-holders to develop new products and services in line with the trend of Chinese fashion and create new consumption scenarios. In the process of shopping, the consumers can also enjoying the culture of different places and the unique charisma of fine tradition of Chinese culture.

We have noted that as the Chinese New Year holiday is around the corner, the hustle and bustle is coming back in many places. Consumer demand is getting strong stronger everyday. China Time-honored Brands have become a bright spot in the consumption market. MOFCOM will continue to work with relevant ministries to help brand-holders increase and diversify supplies while creating new ways to serve consumers so as to foster a happy festive atmosphere of the Chinese New Year. Thank you.

Shu Jueting: Any other question? If you have no question to ask, the conference is concluded. Thank you all.

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