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MOFCOM Regular Press Conference (September 14, 2023)

He Yadong: Friends from the press, good afternoon, welcome to MOFCOM’s regular press conference. I have no information to share upfront and would like to take your questions.

The floor is open.

China Media Group: In August, the decline of China’s exports year-on-yer narrowed by 6 percentage points compared with July, and exports grew month-on-month by 1.2%. Could MOFCOM explain why export statistics have improved? What steps will MOFCOM take to promote steady increase in both the volume and quality of foreign trade?

He Yadong: You are very concerned about the foreign trade situation. To understand the situation of foreign trade, we should pay attention to not just the current performance but also the long-term trends, not just steady increase in volume but also improvement in the structure.

Since the beginning of this year, China’s foreign trade has developed against sluggish global economic and trade growth. Affected by economic and non-economic factors, China’s foreign trade is faced with constant pressure and a grim and complex situation. In this context, foreign trade enterprises have met the challenges head on and actively explored the international market. We have continued to enhance the effectiveness of the policies to stabilize foreign trade and moved faster to remove impediments and challenges to doing trade. Competitive products have grown from strength to strength, which keep contributing to export growth. In general, China’s foreign trade has withstood multiple pressures, showed strong resilience, and performed stably overall, with some positive changes in the stats.

Going forward, we will continue to put in place and implement policies to promote steady increase in both the volume and quality of foreign trade, address weak links and maintain a competitive edge. We will further improve the toolkit of trade policies in response to concerns of the market and enterprises, such as special policies to enhance the development of processing trade, and policies to promote the development of service trade and digital trade. We are committed to cultivating growth drivers, consolidating the foundation of innovation, and effectively stabilizing the fundamentals of foreign trade, so as to make due contributions to the recovery of China’s economy. Thank you.

The Cover: The European Commission announced the rules governing implementation of the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase will come into effect on October 1 this year. Although the EU has said that the purpose of CBAM is to address the global climate change issue, some analysts believe that the move is to give EU products an edge over competitors. What is your comment?

He Yadong: Climate change is a common challenge for all mankind and an important area of global governance. All countries should uphold multilateralism, adhere to the principle of common but differentiated responsibilities, and work together to address climate change through greater international cooperation.

In practice, policies designed to achieve environmental goals may have an impact on trade. Since the EU put forward CBAM, many WTO members have raised concerns. China always believes that relevant policies should comply with the basic principles and rules of the WTO and avoid constituting protectionist measures and green trade barriers. China is working with other parties within the framework of the WTO to advance multilateral discussions on green trade policies. As an important trading partner of the EU, China hopes that EU can implement relevant policies and measures in a fair, just and transparent manner, abide by WTO rules and mitigate the negative impact on trade. Thank you.

SETV: U.S. Secretary of Commerce Gina M. Raimondo recently claimed that the United States will continue to sell billions of dollars worth of chips to China, but the most sophisticated or advanced chips will not be sold. What is the comment of the Ministry of Commerce?

He Yadong: We have noticed relevant reports. The measures taken by the United States to restrict its export of chips to China violate market rules and divide the global semiconductor market, which not only hurts the legitimate rights and interests of Chinese enterprises, but also seriously affects the interests of global semiconductor enterprises, including American enterprises. China is the largest semiconductor market in the world. If artificial restrictions are imposed on the economic and trade exchanges on semiconductor between China and the United States, such attempts will serve no one’s interests.

China has always upheld openness, inclusiveness and win-win cooperation, and will continue to open its door even wider and promote global scientific and technological exchanges and economic cooperation and trade. Thank you.

CBN: Last month, Mexico increased tariffs on a variety of industrial products. It is reported that countries that have not signed free trade agreements with Mexico will be affected, including China and other Asian economies. China is one of Mexico's important trading partners. What is the comment of the Ministry of Commerce?

He Yadong: China and Mexico are both major developing and emerging countries, and the friendly cooperation between the two countries has a solid political foundation and extensive common interests. Under the strategic guidance of the two heads of state, China-Mexico bilateral relations have developed rapidly and pragmatic cooperation in various fields has generated fruitful outcomes. Mexico is China's second largest trading partner in Latin America, and China is Mexico's second largest trading partner in the world. The bilateral trade has sustained its growth momentum, and economic cooperation and trade has brought tangible benefits to the two countries and their peoples.

We have noticed that since August 16 this year, Mexico has raised the import tariff on 392 tariff lines from countries and regions that have not signed free trade agreements with it yet. Although this measure does not target specific countries, it has affected the trade between China and Mexico to some extent. At the same time, the increase in Mexico's overall tariff level will also affect the confidence of investors. China closely follows this matter.

Based on historical experience, raising tariffs will increase the production costs of downstream industries and reduce the welfare of consumers. Mexico benefits from free trade. China hopes that Mexico will adhere to the principle of free trade and use such measures with caution. China is also ready to work with Mexico to give full play to the complementary advantages of the two economies, promote trade and investment facilitation, and promote the healthy and stable development of bilateral economic and trade relations. Thank you.

CNBC: How many investment project agreements in China have been signed after the China-US Sub-national Economic and Trade Cooperation Workshop in Xiamen? How about the amount?

He Yadong: On September 9, the Ministry of Commerce and the Fujian Provincial People's Government held a workshop on economic and trade cooperation between China and the United States during the 23rd CIFIT. About 200 local and business representatives from the two countries attended the meeting to explore and promote the trade of products, technical exchange and investment cooperation between China and the United States on green and low carbon development.

The workshop specially arranged matchmaking sessions, and local and business representatives of the two countries conducted a total of 13 matchmaking events on regional policies, industrial cooperation and investment opportunities, with fruitful outcomes. Thank you.

Reuters: I have two questions. According to a new report by the Rhodium Group, U.S. and European investment inflows into China fell to USD20 billion last year from USD120 billion in 2018, while U.S. and EU investments in India grew by more than 400 percent. Is this a sign of the West decoupling from China and turning to other foreign markets instead? What measures will China take to become a competitive investment destination for US and EU companies?

Another question is that the European Commission launched a countervailing investigation into Chinese electric vehicles on Wednesday, citing that China's massive state subsidies for electric vehicles have distorted the EU market. Did EU officials raised their concerns with China before launching the investigation? How will China respond?

He Yadong: Regarding your first question. What you described as a sharp decline in U.S. and European investments in China is not consistent with the facts. According to the foreign investment statistics of the Ministry of Commerce, actual investments in China by the U.S. and the EU combined amounted to 74.4 billion yuan in 2018 and 86 billion yuan in 2022, an increase of 15.6% from 2018. From January to July this year, paid-in investments in China from the U.S., Germany, France, the United Kingdom, Sweden and other countries continued to grow.

In general, China's market remains highly attractive to foreign investors. This year, many multinational executives have visited China frequently and said that the Chinese market is not an option but a must, and they will continue to increase their investments in China.

Recently, the State Council issued the Guidelines on Improving the Foreign Investment Environment and Attracting More Foreign Investment, which includes 24 policies and measures in response to the shared concerns of foreign-invested enterprises. The Ministry of Commerce will work with relevant departments to implement the policies so that they deliver more benefits to foreign-invested enterprises, including American and European enterprises. We will also shorten the negative list as need be and continue to enhance foreign investment promotion and service provision, and implement national treatment for foreign investors. China will remain firm in advancing high-standard opening-up, and aims to remain an attractive destination for foreign investment.

Regarding your second question, China's position is made clear on the official website of MOFCOM.

I want to emphasize that the investigation of the EU aims to protect its own industry in the name of fair competition. It is blatant protectionism that will disrupt and distort auto supply chains and industrial chains across the world, including in the EU. It will also have a negative impact on the trade and economic relations between China and the EU. China will closely watch the development of the situation and the protectionist tendency of the EU, and safeguard the legitimate rights and interests of Chinese enterprises. Thank you.

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