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MOFCOM Regular Press Conference (August 17, 2023)

Shu Jueting: Members of the press, good afternoon. Welcome to MOFCOM’s regular press conference. First let me share with you a piece of information.

This is about China’s outbound investment cooperation from January to July, 2023.

From January to July, 2023, China’s outbound investment continued to grow, with RMB500.94 billion in non-financial direct investment, up 18.1% year-on-year (USD71.93 billion, up 10.6% year-on-year). Chinese business’ non-financial direct investment in Belt and Road countries reached RMB95.34 billion, up 23.2% year-on-year (USD13.6 billion, up 15.3% year-on-year), accounting for 19% of the total over the same period.

From January to July, 2023, the completed turnover of overseas contractual engineering amounted to RMB563.76 billion, up 6.3% year-on-year, with newly signed contracts worth RMB746.36 billion, up 0.6% year-on-year. In Belt and Road countries, Chinese enterprises reported RMB312 billion in completed turnover of overseas contractual engineering and RMB367.23 billion in newly signed contracts, respectively accounting for 55.3% and 49.2% of the total over the period.

So much about the information I want to share in the beginning. Now I’d like to take your questions. The floor is open.

International Business Daily: This year marks the 25th anniversary of China-South Africa diplomatic relations and the South Africa Year of BRICS. In recent years, bilateral trade and economic cooperation has come a long way. Could you shed some light on that?

Shu Jueting: In recent years, under the strategic guidance and personal impetus of our presidents, China-South Africa trade and economic cooperation has scored leapfrog development. First, bilateral trade grew fairly fast. In 2022, bilateral trade value hit an eight-year high of USD56.74 billion, up 5% year-on-year. In the first half of this year, it grew even faster by 11.7%. China has been South Africa’s largest trading partner for 14 years in a row, while South Africa has been China’s largest trading partner in Africa for 13 consecutive years. Second, two-way investment is fruitful. China is a main source of foreign investment for South Africa, with over USD10 billion in stock investment covering finance, home appliances, automotive, mining and energy, among others. South Africa also registers the most paid-in investment in China among African countries. The two sides have formed a stable and robust partnership on supply chains and industrial chains. Third, cooperation under the multilateral framework is dynamic and effective. Upholding a non-discriminatory, open, inclusive and transparent multilateral trading system and stressing the importance of multilateralism, the two sides jointly drove WTO MC12 to unexpected success and speak with one voice for bolstering the multilateral trading system, unleashing the potential of the digital economy, promoting trade, investment and sustainable development, and strengthening supply chain cooperation through the BRICS cooperation mechanism.

This year marks the 25th anniversary of China-South Africa diplomatic relations, concurring with South Africa’s BRICS chairship. China would like to take this opportunity to work with South Africa and continue to take active and effective measures to expand the scale of trade and investment, deepen industrial chain and supply chain cooperation, help maintain a diversified and stable international economic landscape, and drive high-quality bilateral trade and economic relations from a new historical starting point. Thank you.

Phoenix Satellite Television: The White House issued an executive order to restrict outbound investment on August 10. MOFCOM said earlier addressing media questions that it would reserve the right to take actions. What measures will China consider taking in response?

Shu Jueting: The US executive order restricting investment hurts both sides. China has expressed severe concern. MOFCOM lately called a meeting with businesses to learn about actual impact of the order. On this basis, we are making a comprehensive assessment of the order’s impact and will take necessary measures in response accordingly. Thank you.

CNBC: I have two questions. After announcing the export control on gallium and germanium on July 3, has MOFCOM received export applications from enterprises or agencies? How does the measure affect China’s chip market? As for other export control measures, what are MOFCOM’s considerations and plans in the coming months? The second question, it is reported that US Commerce Secretary Raimondo will visit China in late August. Is it true?

Shu Jueting: I’ll answer your second question first. China welcomes Secretary Raimondo to visit China. At present, China and the US are engaged in close communication on related arrangements. We’ll share further information when there’s any.

Regarding your first question, according to the announcement, the export control on items related to gallium and germanium became effective on August 1. MOFCOM has received licence applications from some enterprises for the export of related items. We are conducting reviews in accordance with law and regulation and will make decisions after taking into full consideration national security and interests, international obligations, end users and end uses, among other factors. China’s export control exercise is prudent and proportionate and aimed at maintaining national security and better discharging international obligations. MOFCOM will follow the export control law in adjusting and improving the list of dual-use items for export control in a timely manner. Thank you.

China Daily: On April 12, MOFCOM launched a trade barrier investigation against Taiwan. What is the progress so far?

Shu Jueting: On April 12, MOFCOM released in Announcement No.11 of 2023 its decision to launch a trade barrier investigation into Taiwan’s trade restrictions on the mainland. According to related provisions of the Foreign Trade Law and Investigation Rules of Foreign Trade Barrier, the investigative authority is proceeding with the investigation in an orderly manner through questionnaires and field trips on the basis of compliance, openness, equity and justice.

Preliminary findings show that the Taiwan region’s trade restrictions on the mainland have allegedly violated WTO principles of non-discrimination and general elimination of quantitative restrictions. The mainland has made clear its concern in successive WTO trade policy reviews on Taiwan and urged the region to honor its WTO commitments. However, Taiwan hasn’t changed its practice so far. Meanwhile, the scope of imports from the mainland prohibited by Taiwan has been expanding on the whole in recent years. Products involved in the investigation has been adjusted from 2455 items at the time of filing to the current 2509 items. Due to Taiwan’s trade restrictions, products of multiple sectors, including petrochemicals, textile, machinery and electronic equipment, automotive, and many quality agricultural products and daily essentials of good prices from the mainland are denied access to Taiwan, causing an adverse impact on the interests of related exporters. Companies and business associations taking part in the investigation are calling for Taiwan’s lifting of trade restrictions on the mainland as soon as possible.

For the next steps, the investigative authority will carry forward the investigation in line with related provisions and publish the conclusion in due course.

China Daily: ECFA stipulates that the two sides should gradually reduce or eliminate substantial tariffs or non-tariff barriers on their most trade in goods. If Taiwan’s measures are found to be trade barriers, will the mainland suspend or partially suspend related preferential tariff treatment for Taiwanese products under ECFA?

Shu Jueting: MOFCOM will consider taking measures according to related rules with reference to the findings of the investigation.

Cover News: In the first half of the year, despite the complex and volatile external situation, China’s trade in services maintained the momentum of growth. The total value of services imports and exports were up 8.5% year-on-year. What’s MOFCOM’s analysis of the performance and the underlying cause? CIFTIS 2023 will open next month. What is its role in the further liberalization of China’s services sector? Will new measures be announced?

Shu Jueting: Regarding your first question, in the first half of the year, China’s services trade kept growing steadily. The value of services imports and exports totalled RMB3135.84 billion, up 8.5% year-on-year. In breakdown, trade in knowledge intensive services took up 43.5%, up 1.5 percentage points from the previous year. The imports and exports of tourism service grew 65.4%, making it the fastest growing sector. The steady growth in trade in services is largely due to the following reasons.

First, supporting policies for trade in services continue to work. In recent years, MOFCOM has implemented the decisions and plans of the CPC Central Committee and the State Council in earnest and worked with related departments to introduce a slew of policy measures boosting services trade, including promoting innovative development of trade in services, deepening services liberalization, accelerating the transformation and upgrade of services outsourcing, strengthening the development of specialty services export bases, and developing digital trade with vigor, among others. Localities have also actively announced their supporting measures based on local conditions. The delivery of these policy measures have effectively driven the steady development of China’s services trade.

Second, the foundation for the development of trade in services is more solid. This year, the national economy has continued to rebound steadily, with services growing fairly rapidly. In the first half of the year, China’s services sector posted RMB33 trillion in value added, up 6.4% year-on-year. Accounting for 56% of the GDP, which is 1.6 percentage points higher from the previous year, it contributed 66.1% to national economic growth and provided strong support for the steady growth of China’s trade in services.

Third, the group of trading partners in services is expanding. Over the years, China has deepened international cooperation on service trade. China has established service trade relations with more than 200 countries and regions and signed bilateral service trade cooperation agreements with 15 countries. Since the outset of this year, MOFCOM has stepped up dialogue on service trade with Belt and Road partners, BRICS and the SCO, put in place cooperation mechanisms with relevant countries and deepen cooperation with key partners. The network for international cooperation on service trade is maturing. The CIIE and CIFTIS, among other major exhibitions, have become international public goods and effective platforms for China to enhance trade in services with other countries.

On your second question, President Xi Jinping has pointed out that as a crucial platform to expand opening up, deepen cooperation and pioneer innovation, CIFTIS has made positive contributions to promoting the development of global service industry and trade in services. After 11 years of development, CIFTIS has become a golden name card for China’s service industry and opening up and cooperation in the field of service trade. The 2023 CIFTIS is just around the corner. We will hold a press conference in the near future to brief you on the preparations for the event. You are welcome to cover it in your reports. Thank you.

CGTN: What is MOFCOM’s comment on the claims made at a recent hearing held by the US House of Representatives that China is acquiring US tech data and intellectual property by force or through mergers and acquisitions to help Chinese firms replace US firms?

Shu Jueting: Such allegations are totally false. The essence of economic and trade cooperation between China and the US is of mutual benefit and win-win. China welcomes enterprises from all countries, including US companies, to grow and succeed in China. China has made great efforts to create a market-oriented, law-based and internationalized business environment for all kinds of enterprises. Companies obtaining technology and intellectual property through merger and acquisition is a normal business cooperation model. China is categorically opposed to forced technology transfer and never helps Chinese firms replace US firms by acquiring US technology by force. Forced technology transfer runs counter to China’s foreign investment law and the laws of the market.

China is highly attentive to the requirements by the US government to force companies to sell assets and transfer technology to US firms, which is typical forced technology transfer. The US should treat Chinese enterprises fairly and equitably and provide them with equal treatment in trade and investment cooperation in the US. Thank you.

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