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MOFCOM Regular Press Conference (July 6, 2023)

Shu Jueting: Friends from the press, good afternoon. Welcome to MOFCOM’s regular press conference. I would like to make an announcement first.

Development of China's service trade in the first five months of this year:

From January to May, 2023, China's service trade maintained an overall growth trend. The total import and export of services was RMB2,605.54 billion (RMB, same below), up 10.2% year-on-year. Among them, exports were RMB1,098.22 billion, down 4.7% and imports reached RMB1,507.32 billion, up 24.2%. The service trade deficit was RMB409.1 billion. The main features are as follows:

First, the proportion of knowledge-intensive trade in services increased. From January to May, the import and export of knowledge-intensive services were RMB1,122.78 billion, up 13.6% year-on-year, accounting for 43.1% of the total import and export of services, up 1.3 percentage points over the same period of last year. Among them, the export of knowledge-intensive services was RMB656.59 billion, up 17.2%, and the import of knowledge-intensive services was RMB466.19 billion, up 8.8%.

Second, the travel service obviously recovered. From January to May, the import and export of travel services reached RMB552.54 billion, a year-on-year increase of 67%, making it the fastest-growing area of service trade. Among them, exports increased by 53.4% and imports increased by 68.1%.

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

International Business Daily: New Zealand’s Prime Minister Chris Hipkins concluded his official visit to China a few days ago. At the same time, we have noticed that China and New Zealand have recently conducted a series of exchanges and interactions on economy and trade. Can you give us a briefing? How does China evaluate China-New Zealand economic and trade cooperation?

Shu Jueting: New Zealand’s Prime Minister Chris Hipkins paid his first official visit to China from June 25 to 30. During his meeting with Prime Minister Chris Hipkins, President Xi Jinping pointed out that China-New Zealand relations have long been a "pacesetter" in China's relations with developed countries. The two sides should continue to carry forward the spirit of "striving for excellence" to constantly strengthen and deepen the comprehensive strategic partnership between the two countries.

During this visit, China and New Zealand issued the Joint Statement on Comprehensive Strategic Partnership between the People's Republic of China (PRC) and New Zealand, which reflected a series of consensus on economy and trade, including: The two countries welcomed the entry into force of the upgrade protocol of China-New Zealand FTA in 2022; Negotiations on the negative list of service trade will be launched in 2023; The two countries are ready to strengthen bilateral trade and expand cooperation on e-commerce, service trade and green economy; The two countries reaffirm that they uphold the multilateral trading system based on rules with the World Trade Organization at its core; Cooperation will be strengthened under the framework of APEC; The two countries emphasize cooperation under the RCEP framework; New Zealand welcomes China's application to join the CPTPP; New Zealand welcomes China's participation in the ongoing in-depth discussions of the DEPA Working Group.

As you mentioned, the two sides have recently conducted a series of economic and trade interactions amid high-level exchanges. On June 26, Minister Wang Wentao of the Ministry of Commerce met with Damien O'Connor, Minister for Trade and Export Growth of New Zealand, who accompanied Prime Minister Chris Hipkins on his visit. On June 19, China International Trade Representative and Vice Minister Wang Shouwen and Deputy Secretary of the Ministry of Foreign Affairs and Trade of New Zealand Deborah Geels co-chaired the 32nd China-New Zealand Joint Commission on Economy and Trade.

The economies of China and New Zealand are highly complementary and their interests are deeply integrated. China has been New Zealand's largest trading partner in goods, export market and import source for many years. In the next step, China is ready to work with New Zealand to fully implement the important consensus reached by the leaders of the two countries, continue to promote trade and investment liberalization and facilitation, create new growth areas for pragmatic cooperation, and bring China-New Zealand economic and trade relations to a new level. Thank you.

Red star news: The Ministry of Commerce and the General Administration of Customs announced on their official websites on July 3 that they decided to impose export control on gallium and germanium-related items. I would like to ask the considerations for this measure and its impact. After the announcement, the United States and Europe paid close attention to this and gave responses. What is China's comment on this?

Shu Jueting: Gallium and germanium-related items can be used for both military and civilian purposes. Export control on gallium and germanium-related items is international customary practice and the major countries in the world have also imposed control on such items. The Government of China imposes export control on gallium and germanium-related items in accordance with law, ensuring that they are used for legitimate purposes, with the aim to safeguard national security and better fulfill the international obligations. It should be noted that export control does not prohibit exports, and exports that meet the relevant regulations will be allowed.

The government of China implements export control in accordance with law. China's measure does not target any specific country, and prior notifications had been provided through channels such as the China-U.S. and China-EU export control dialogues before the notice was issued. Thank you.

Market news international: Last week, executive meetings of the State Council proposed targeted measures to boost consumption on household appliances. What specific measures will be introduced? As the downstream sector of the real estate, will it be held back by the current downturn in the property market?

Shu Jueting: The government of China attaches great importance to expanding domestic demand and promoting consumption. Consumption on household appliances involves many sectors, with long industrial chains upstream and downstream, and a large scale and volume. Taking targeted measures to boost the sector could drive household consumption growth and economic recovery. Recently, the Ministry of Commerce, together with relevant departments, drafted a policy document to promote consumption on household appliances on the basis of in-depth studies, and put forward specific measures on improving supply quality, innovating consumption scenarios, improving consumption conditions and optimizing consumption environment. The document was reviewed and approved at the State Council executive meeting on June 29, and will be officially issued soon. At that time, we will hold a special press conference to interpret the policy measures. Friends from the media are welcome to follow the report. Thank you.

CNBC: After making the announcement to impose export control on items related to gallium and germanium, has MOFCOM received any export applications from businesses or institutes? Does it have an impact on China’s chip market?

Shu Jueting: The notice made it clear that the export control measures on items related to gallium and germanium will be implemented on August 1. MOFCOM has not yet received any export applications from the businesses. Once we receive such applications, we will review them in accordance with applicable laws and regulations. Those that meet the export requirements will be approved. Thank you.

Shanghai Securities: It is reported that Jorge Toledo Albiñana, head of the EU Delegation to China, expressed regret at a forum in Beijing on Sunday that “talks with China on economic and trade issues have not made any progress in the past four years, or at least substantive progress.” He added that China and EU will hold the High-level Economic and Trade Dialogue in September. Does MOFCOM have any comments on that score? Could you please share with us how the bilateral trade communication is going, and the arrangement for the HED in September?

Shu Jueting: China is fully committed to and working on the implementation of the deliverables of the 9th HED, and has informed the EU about the progress. To act on the important common understandings reached between President Xi Jinping and President Ursula von der Leyen, the two sides are now discussing the arrangements for the 10th HED. China stands ready to work with the EU to make preparations for the Dialogue, and jointly drive the steady and long-term development of the bilateral trade and economic relations.

Kyodonews: The authority of Hong Kong announced that it will curb seafood import from the most risky counties off the coast of Fukushima once Japan starts to discharge nuclear waste water. What’s the plan of the Chinese government? Will the Chinese government implement stricter regulation on agricultural products and seafood imports from Japan? My second question, what expectations does China have about the outcomes of the CPTPP ministerial meeting on the 15th and 16th of this month?

Shu Jueting: Regarding your first question, the discharge of nuclear waste water from Fukushima into the ocean matters to the ocean environment and public health around the world. It is not for Japan to act on its own. The Chinese government has repeatedly made clear its firm positions on this issue. China will closely follow the development of the situation and evaluate the possible impact to ensure the safety of Chinese consumers.

Regarding your second question, China has been working actively to advance the accession process since we made the application to join the CPTPP in September 2021. In preparation, we have conducted comprehensive and in-depth analysis, research and assessment on all the provisions of the CPTPP and reviewed the reform measures and legal revision that may be required. At present, China is communicating and consulting with CPTPP members according to the accession procedures. Thank you.

The Paper: It is reported that the U.S. is considering new export restrictions on AI chips sold to China. Some U.S. companies said that while they do not anticipate an immediate impact of the curbs on chip sales to China, it will lead to “permanent loss of opportunities for US industry”. What’s your comment?

Shu Jueting: For some time, the U.S. has been abusing export control measures, reinforcing suppression and curbs on China’s semiconductor industry, and deliberately splitting the global semiconductor market. The U.S. has undermined global free trade, disregarded international trade rules, and trampled on the principle of fair play. The semiconductor industry epitomizes global industrial collaboration and division of labor. As the world’s largest market for semiconductors, China sells around 1/3 of chips around the world, a win-win result of cooperation between Chinese companies and companies from around the world. The moves of the U.S. will harm the legitimate interests of not only Chinese companies, but of many countries and regions across the world. The attempt to hamper global technological and economic and trade cooperation will only backfire, as reflected by the concerns of the U.S. business community. Thank you.

Yicai: Could you give us a briefing on the series of events under the Invest in China initiative in July?

Shu Jueting: This year, in order to attract and utilize more foreign investment, MOFCOM has launched the Invest in China Year initiative. Following the launching ceremony and the promotion in Guangdong province, we have held a dozen of events in other parts of China, including “CIIE in Jilin”, Multinationals in Heilongjiang, and the promotion of national-level economic and development zones. We have also visited Gulf countries and Germany for investment promotion, effectively helping FIEs increase understanding on China’s investment environment and foreign investment policies, and attracting more foreign investors to visit and invest in China.

According to our plan, we will hold the Multinationals in Inner Mongolia event from 11 to 14 of July. By bringing multinationals to different parts of China, we aim to help China’s central and western regions, and northeastern regions have better communication with multinationals and implement more foreign-invested projects. With the focus on the competitive industries in Inner Mongolia, this event will help foreign-invested enterprises better understand and invest in Inner Mongolia. We will invite multinationals in related industries to industrial parks and companies in Hohhot, Ordos, and Erenhot to see for themselves, and learn more about the characteristics, resources, business environment of local industries.

Later this year, we will hold the Invest in China Keynote Forum during the China International Fair for Investment and Trade, a special promotional event for service industries during the China International Fair for Trade in Services, a special promotion event for China’s central regions during the Central China Expo, and the Invest in China Year Summit during the China International Import Expo. Foreign investors are welcome to follow the series of events to seize the investment opportunities and share China’s development dividends.

Bloomberg: Does MOFCOM have any plans to gradually reduce exports of gallium and germanium, as happened to rare earth export, which gradually declined after rare earth exporters were required to get a licence. Could you explain the benefits of export licence for gallium and germanium to national security?

Shu Jueting: Regarding your first question, export control is not about restricting amount or banning export. China will review the applications for the export of items related to gallium and germanium in accordance with the law. Those that meet the requirements will be approved.

Regarding your second question, since items related to gallium and germanium are evidently dual-use items, it is an international practice to implement export control on them. China requires a licence for items related to gallium and germanium to ensure they are used for lawful purposes. This is part of our efforts to safeguard national security, implement international obligations for non-proliferation, and contribute to global peace and security. Thank you.

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