Friends from the media, good morning! Welcome to the regular press conference today. I will brief you the situation of the business performance in January-July this year and that in July 2016, and answer the questions of your concern.

I. Market Performance

In July, China’s consumer market maintained a stable growth. The retail sales of consumer goods in July reached RMB 2.69 trillion, going up 10.2% year on year, 0 .4 percentage points lower than that of the previous month. The actual growth was 9.8% with the price factor excluded. In January-July, the accumulative growth was 10.3% year on year, remaining the same as that in the first half of this year. The actual growth rate of the retail sales of the 5,000 enterprises monitored by the Ministry of Commerce was 0.2 percentage points lower than that in June. The main features are as follows:

1. Online retail sales and part of entity business maintained a relatively higher growth. In January-July, the online retail sales of the national physical commodities was up 26.1% year on year, 0.5 percentage points slower than that of the first half of this year; its proportion in the total retail sales of consumer goods was 11.6%, remaining the same as that in the first half of this year. In July, the online sales of enterprises monitored by the MOFCOM increased 24.8% year on year; this growth was 22.7, 17.9 and 17.2 percentage points higher than those of department store, supermarket and shopping mall respectively.

2. The growth of living, clothing and travelling commodities increased fast. In July, among the unit sales above national designated size, the consumption related to housing enjoyed a rapid development driven by the rapid increase of the real estate sales. The sales of building materials and furniture went up 15% and 13.6% respectively, 0.8 and 0.2 percentage points higher than that of June respectively. The sales of clothing went up 9.4%, 1.9 percentage points higher than that of June. The automobile market maintained a turnaround momentum and the automobile sales increased 9.2% year on year, among which the new energy automobile was up 162%.

3. The sales of green intelligent appliance were vigorous. In July, the sales of unit appliance above the designated size increased 11.5% year on year. The sales of the first-class energy consumption air conditioner and variable frequency air conditioner of enterprises monitored by the MOFCOM increased 9.4% and 9% respectively year on year, 0.8 and 0.4 percentage points higher than the sales of air conditioner. The sales of Super Hi-vision 4k TV rose by 8.7% year on year, 6.6 percentage points higher than the sales of TV.

4. The consumption price was stable. In July, CPI was up 1.8% year on year, dropping for a consecutive three months. In 36 large and medium size cities monitored by the Ministry of Commerce, the prices of agricultural products were up 1.2% year on year, 3.1 percentage points slower than those in June. The average wholesale price of pork was RMB25.3 per kilogram, down 4.4% month on month, and up 15.7% year on yea. The growth was 16.1 percentage points lower than that of June. Affected by the heavy rainfall and the high temperature weather, the price of vegetable increased. The average wholesale price of 30 kinds of vegetables at the end of July was RMB3.51 per kilogram, up 3.8% than that of the end of June.

II. Foreign Trade

According to the Customs statistics, China’s total import and export in January-July reached RMB 13.21 trillion, down 3% year on year. Among these, the export was RMB 7.6 trillion, down 1.6%; the import RMB 5.61 trillion, down 4.8 %. The surplus was RMB1.99 trillion, up 8.7%. (In terms of the US dollars, in January-July, China’s total import and export reached US$ 2.0278 trillion, down 8.7% year on year. Among these, the export was US$ 1.1676 trillion, down 7.4%; the import was US$ 860.1 billion, down 10.5%. The surplus was US$307.5 billion, up 2.6 %.). From the running condition of the foreign trade in January-July, China’s foreign trade continued to maintain a stable turnaround situation and it shows the following features:

1. In terms of the development situation of foreign trade, the accumulative decreasing amplitude of foreign trade export has narrowed for a consecutive five months. Since this March, the accumulative decreasing amplitude of China’s foreign trade export has narrowed for a consecutive five months. The foreign trade export is better than the major economies of the world such as the United States, Japan, South Korea, Russia and India. China’s foreign trade still keeps the momentum of the stable turnaround recovery.

2. From the main body of enterprises, private enterprises are still the main force of export. In January-July, the export of private enterprises increased 3.6%, accounting for 46.8% of the total foreign trade export, 2.6 percentage points higher over the same period of last year. The proportion of the export of private enterprises exceeds that of the foreign-funded enterprises. The state-owned enterprises and private enterprises continue to maintain the principal status of the biggest exporter. The export of the SOEs and foreign-funded enterprises decreased 6.8% and 5.6% respectively.

3. In the international market, the export to some relevant countries and regions along the line of the “Belt and Road” was better than the overall level. In January-July, China’s export to the relevant countries of the “Belt and Road” such as the Philippines, Russia, Thailand and India increased 26.1%, 14.5%, 9.4% and 7.4% respectively. The export to the EU went up 1.7% and the export to Japan decreased 0.2%, 3.3 times faster and 1.4 percentage points higher than the overall export growth respectively.

4. With regard to trade mode, the proportion of the general trade was constantly improved. In January-July, the general trade export increased 0.8%, accounting for 55.7% of the total import and export volume of the nation, up 1.3 percentage points year on year. The processing trade decreased 7.8%, down for 17 months consecutively, driving down 2.7 percentage points of the general export growth.

5. In terms of the commodity structure, the export of the large-scale complete sets of products and the high-value added products maintained a positive growth. In January-July, the export of mechanical and electrical products and high-tech products decreased 1.9% and 1.6% respectively, but the export of large-sized complete sets of equipments went up 3% and that of high-value added products such as integrated circuit increased 2.9%. The export of seven kinds of labor intensive products increased 0.2%, among which the exports of toy, plastic products and textile increased 14.5%, 4.4% and 3.9% respectively.

6. From the regional distribution, the import and export of Eastern Region was better than the whole nation. In January-July, the import and export of Eastern Region reached RMB11.33 trillion, down 2.4%. The import and export of Central Region was RMB939.2 billion, down 4.5%. The import and export of Western Region was RMB942.7 billion, down 7.8%.

7. As to import, the import quantity of some staple commodities maintained growth. In January-July, the quantity of 10 kinds of staple commodities such as crude oil, iron ore and copper concentrate increased while the price decreased, with the quantity up 3.1%-36.2% and the price down 9.6%-33.9%. The payment reduced US$57.75 billion totally (about RMB380 billion). This was conducive to reducing the costs of enterprises and improving the benefits.

III. Foreign Investment in China

The national overall absorption of FDI sustained it growth. In January-July, a total of 15,802 foreign-invested enterprises were newly established, up 9.7% year on year. The actually utilized FDI amounted to RMB 491.51 billion (US$77.13 billion), up 4.3% year on year (data of bank, security and insurance were not included). In July, 2,400 newly-established foreign-invested enterprises were approved, going down 3.8% year on year, and the actually utilized foreign capital reached RMB 49.76 billion (US$7.71 billion), decreasing 1.6% year on year.

The absorption of FDI in hi-tech service sector and hi-tech manufacturing increased, with the growth of hi-tech service being bigger than that of hi-tech manufacturing. In January-July, the actually utilized FDI in service sector reached RMB 344.31 billion, up 7.7% year on year, taking up 70.1% of the national total. That in hi-tech service sector reached RMB 60.18 billion, going up 98.2% year on year. Among these, the information technology service, data content and relevant service, R&D and the service of design stood out with an increase of 303.5%, 57.7% and37.5% respectively year on year.

The actually utilized FDI in manufacturing was RMB 139.08 billion, down 5.3% year on year, taking up 28.3% of the national total. Among these, that in hi-tech manufacturing reached RMB 34.52 billion, going up 1.5% year on year. That in medicine manufacturing and medical equipment and instrument manufacturing stood out with a growth of 91.4% and 80.5% respectively year on year.

The investment from major sources kept a steady growth. In January-July, the actual input of the investment from the top ten countries and regions (calculated by actual input value of foreign capital) amounted to RMB 465.21 billion, taking up 94.6% of the total national actual use of foreign capital, going up 5.6% year on year. Among these, those from the US, UK and Germany grew by 129.8%, 96.8% and 96.6% respectively. The growth of information transmission, computer service and software industry, scientific research, technology service and geological prospecting industry and manufacturing stood out. Over the same period of time, the actual input of foreign capital from the ASEAN countries stood at RMB 24.79 billion, down 1.7% year on year. That from 28 EU countries reached RMB 37.8 billion, up 35.6% year on year. That from countries related to “Belt and Road” reached RMB 25.53 billion, down 8.6% year on year.

In July, the actual input of foreign capital from the ASEAN countries stood at RMB 3.91 billion, down 14.8% year on year. That from 28 EU countries reached RMB 2.03 billion, down 27.2% year on year. That from countries related to “Belt and Road” reached RMB 4.1 billion, down 12.9% year on year.

The input of FDI western China was higher, that in eastern China remained stable and that in Central China decreased greatly. In January-July, the actually utilized FDI in western China amounted to RMB 36.5 billion, going up 31% year on year. The actually utilized FDI in eastern China reached RMB 428.83 billion, up 6.6% year on year. The actually utilized FDI in Middle China amounted to RMB 26.18 billion, down 36.1% year on year. The actually utilized FDI in Yangtze River Economic Zone amounted to RMB 218.77 billion, up 6% year on year.

In July, the actually utilized FDI in Yangtze River Economic Zone amounted to RMB 21.99 billion, down 11.1% year on year

There are a large number of the newly set large enterprises with added capital. In January-July, there were 443 large foreign invested enterprises with a total investment amount over US$ 100 million, and 255 enterprises with more than US$100 million added capital. Among them, there were not only manufacturing enterprises that engage in R&D and the manufacturing of new materials, new energy automobiles and batteries, aircraft components, integrated circuit and chips, but also service enterprises that engage in medical care, old-age care, e-commerce, cloud computing and R &D and the application of the technology of the Internet of Things .

The actual use of foreign capital by foreign M&A continued to increase. In January-July, a total of 795 newly-established foreign-invested enterprises were approved with an actual use of foreign capital RMB 100.57 billion, up 4.1% and 17.8% respectively year on year, taking up 5% and 20.5% respectively of their total figures.

IV. Outward Investment and Economic Cooperation

Foreign direct investment. In January-July 2016, the Chinese domestic investors carried out the non-financial direct investment in 5,465 outward enterprises in 156 countries and regions, with an accumulative investment of RMB$ 673.24 billion (US$ 102.75 billion), up 61.8% year on year. In July, the foreign direct investment was RMB 91.01 billion (US$13.89 billion). By the end of July, the non-financial direct investment of China amounted to RMB6.3 trillion (US$ 965.79 billion).

Foreign contractual projects. In January-July, the turnover of the foreign contractual projects was RMB 505.04 billion (US$ 77.08 billion), down 2.4% year on year. The newly-signed contractual value was RMB 746.82 billion (US$113.98 billion), up 3.6% year on year. The turnover completed in July was RMB 72.27 billion US$ 11.03 billion), and the newly-signed contractual value was RMB 93.63 billion (US$ 14.29 billion).

Foreign labor cooperation. In January-July, China has sent all kinds of laborers abroad with a number of 271,000. In July, China sent 49,000 laborers abroad. By the end of July, the number of China’s dispatched laborers reached 995,000.
In January-July, China’s outward investment and economic cooperation mainly presented the following features:

1. The outward investment maintained a rapid growth with a steady growth rate. Since the beginning of this year, China’s direct investment outward has been keeping a steady growth with the investment outward volume exceeding the utilization volume of foreign investment. China has become a net capital exporter. At the same time, the growth of investment outward was steady. In July, the direct investment outward reached US$ 13.89 billion, down 9.5% month on month, going down for three consecutive months compared with that of April, whose investment outward reached US$ 19.99 billion.

2. The investment regions were relatively centralized, and the developed countries and regions grew rapidly. In January-July, the Chinese inland’s investment in Hong Kong, ASEAN, EU, Australia, U.S., Russia and Japan reached US$ 75.09 billion, accounting for 73.1% of the total direct investment outward in the same period. The investment flow to the U.S., Germany and Australia grew rapidly, with the rate reaching 210%, 200.6% and 74.3%.

3. M&A has become the main pattern of direct investment outward and large-scale M&A projects increased. In January-July, the Chinese enterprises carried out 459 M&A projects in 63 countries and regions, covering 15 industries like information transformation, software and information service and manufacturing, with the actual transaction amount reaching US$ 54.3 billion, accounting for 52.8% of the total investment outward over the same period. The actual transaction volume of M&A in January-July has surpassed the total volume of 2015. There were 12 projects whose actual M&A volume were over US$ 1 billion, mainly including purchasing the 30-year concession rights of Brazilian Jupia plants and Ilha plants.

4. Investment and cooperation in countries related to “Belt and Road” saw steady progress with large growth potential. From the day when the “Belt and Road” was proposed to July this year, China had invested US$ 51.1 billion in related countries, accounting for 12% of China’s total direct investment outward; there are 12.5 thousand the newly-signed contract projects with the countries alongside , with the contract volume reaching US$ 279 billion; there are 52 economic and trade cooperation zones established by Chinese enterprises in related countries, with the investment reaching US$ 15.6 billion, creating US$ 0.9 billion tax revenue and about 70,000 jobs for the host country.

V. Service Trade and Service Outsourcing Situation

Service trade situation. In January-June, China’s service trade enjoyed a good momentum, and China’s service import and export maintained a rapid development. According to statistics, China’s service import and export volume in January-June reached RMB2.53361 trillion, with an increase of 21.5% year on year. Among these, China’s service export was RMB890.22 billion, with an increase of 7.5% year on year and the service import was RMB1.64639 trillion, with an increase of 29.9% year on year. Major features are as follows:

1. The import and export scale was expanded continuously. In January-June, China’s service import and export maintained a double-digit growth for six consecutive months, and the service trade accounted for 18.6% of the foreign trade, 4.1 percentage points higher than that of the same period last year.

2. Export of high value added service accelerated. In January-June, the computer and information service export was RMB81.16 billion, with an increase of 16.3% year on year and the technical service export was RMB44.41 billion, with an increase of 21.2% year on year. The exports of maintenance service, advertisement service and financial service saw a year-on-year growth of 65.9%, 38.3% and 35% respectively.

3. The service import enjoyed a high-speed growth. In January-June, the growth of China’s service import approached 30%. Among these, the travel service (including tourism and studying abroad) import reached RMB1.07445 trillion, with an increase of 48% year on year, marking the major reason that drives the service import. Besides, the import of insurance service reached RMB 40.3 billion, up 93.4% year on year.

The service outsourcing situation. In January-July, the service outsourcing contractual volume signed by the Chinese enterprises was RMB560.83 billion and the executed value was RMB349.47 billion, with an increase of 32.1% and 9.8% year on year respectively. Among these, the contractual value of the offshore service outsourcing was RMB387.44 billion and the executed value was RMB224.48 billion, with an increase of 44.6% and 6.2% year on year respectively. Some features are presented as follows:

1. The executed value of onshore service outsourcing witnessed a rapid growth. With the servicizing of China’s manufacturing industry and the development of service-oriented manufacturing, many enterprises transferred their business emphasis to domestic market, which promoted the rapid development of onshore service outsourcing. In the first 7 months, the executed value of China’s onshore service outsourcing was RMB 124.99 billion, up 16.9% year on year, 10.7 percentage points higher than that of offshore service outsourcing.

2. Eastern coastal provinces and cities dominated the leading advantages of industrial development. In the first 7 months, the executed value of offshore outsourcing undertaken by eastern coastal provinces and cities was RMB 212.14 billion, accounting for 94.5% of the national total, up 7.7% year on year. The executed value of onshore service outsourcing of the central and western area reached RMB 15.92 billion, up 60.4% year on year, higher than that of the eastern area. The industrial division between eastern coastal provinces and cities and the central and western area in service outsourcing was even clear.

3. The newly-signed contractual value of the markets of the “Belt and Road” increased rapidly. In the first seven months, the contractual value of the service outsourcing newly signed by the Chinese enterprises with the relevant countries along the line of the “Belt and Road” was RMB67.96 billion, with an increase of 24.1% year on year, mainly including businesses such as information technology service, engineering design, industrial design and supply chain management. Among these, the contractual value of service outsourcing newly signed by the Chinese enterprises with the Southeast Asian countries was RMB 52.14 billion, with an increase of 72.3% year on year. The amount of newly signed contracts with Central and Eastern European countries reached RMB 1.51 billion, up 41.1% year on year.

4. The industrial agglomeration effect of provinces and cities along the Yangtze River Economic Belt was obvious. In the first 7 months, the executed value of provinces and cities along the Yangtze River Economic Belt was RMB 227.8 billion, accounting for 65.2% of the total executed value of service outsourcing; among these, the executed value of the offshore service outsourcing undertaken by 11 provinces and cities along the line of the Yangtze River Economic Belt was RMB133.07 billion, accounting for 59.2% of the national total. Led by Yangtze River Delta Area, the industries of the up and middle reaches developed, and the agglomeration and demonstration effects became even obvious. In January-July, there were 1,328 service outsourcing enterprises that were newly established with 297 thousand employees.

VI. The Coordinators’ Meeting on the Implementation of the Follow-up Actions of the Johannesburg Summit of the Forum on China-Africa Cooperation

On July 28-29, the Coordinators’ Meeting on the Implementation of the Follow-up Actions of the Johannesburg Summit of the Forum on China-Africa Cooperation was held in Beijing, 104 ministerial (or above ministerial) officials from 52 African members of the forum attended the meeting. President Xi Jinping sent his congratulatory letter to the meeting, and pointed out that the meeting is not only an important action of China and Africa to implement the consensus of the leaders of both China and Africa and the achievements of the summit, but also an important measure to bolster China-Africa cooperation and development.

The Chinese Ministry of Commerce and Ministry of Foreign Affairs are both the organization of the dual chairman of Chinese Follow-up Actions Committee of the China-Africa Cooperation Forum and the organization of the dual director of the preparatory committee of the meeting. During the meeting, Minister Gao Hucheng made a work report on the implementation of the new economic and trade measures of the China-Africa "Ten Cooperation Plans" initiated by President Xi Jinping at the Johannesburg Summit of the Forum on China-Africa Cooperation in 2015 and the work plan next, gaining high appraisement from the African parties. Together with the Ministry of Foreign Affairs, the Ministry of Commerce held the Dialogue Meeting between leaders of Chinese financial organizations and the coordinator. During the meeting, the responsible of 6 Chinese financial organizations including Export-Import Bank of China, China Development Bank, Industrial and Commercial Bank of China, China Export & Credit Insurance Corporation, China-Africa Development Fund and China-Africa Capacity Cooperation Fund had in-depth communications with African parties. The Ministry of Commerce also signed 20 inter-governmental economic and trade cooperation agreements with African countries, covering several fields like vocational education, medical treatment, culture, disaster preventing and reducing.

This is the first time for China and Africa to hold high level meeting on the implementation of the achievements of the summit. It not only provided important opportunities to the two parties to consolidate confidence, build consensus and gather joint efforts, but also showed that China kept its promise and its commitment to support the development of Africa. In the future, China will continue to follow the policy principle in Africa of “sincerity, real results, affinity and good faith” and the right idea of morality and profit, and accord to the principle of being “scientific, practical and efficient”, which aims to comprehensively implement the “Ten Cooperation Plans", consolidate the economic pillar of China-Africa relation, forge a upgraded China-Africa economic and trade cooperation, and make the substantial achievements better benefit the people of China and Africa as soon as possible.

VII. The Ministry of Commerce launched off the proposing activity of “Building the Tracking system together, Serving the Consumers”

Recently, the ministry of commerce organized some representatives from the industry of wholesaling and retailing, and the industries of meat, vegetable, alcohol, dairy product, Chinese medicine and building material to discuss in the forum of building the origin-tracking system and started “building the tracking system, serving the consumers” activity. About 20 industry organizations including China Business Association, China Chain Management Association, the National Urban Agricultural Trade Center Association, China Food Industry Association, China Meat Association, China Pharmaceutical Business Association, China Building Materials Circulation Association responded positively. They all agreed to influence others with self-discipline and strengthen the sense of principle and responsibility, promote the building of the tracking system.

The next step is to keep promoting, encouraging and supporting more organizations to join the system, form a trustworthy, safe and harmonic environment of market, set a tough base for consumers.

Now, you are welcome to ask any questions.

China Daily: At the AEM and related meetings concluded not long ago, Minister Gao Hucheng made some proposals on behalf of China that were received positively by all parties. Could you further interpret what positive meaning these Chinese proposals have? In addition, we have noticed that Minister Gao had a meeting with the Philippine Secretary of Trade and Industry Ramon M. Lopez on the sidelines of the AEM and related meetings. What was the focus of the two ministers’ conversation? Thank you.

Shen Danyang: Minister Gao Hucheng led an official trade and economic delegation to the AEM and related meetings on 4-5 August. At the meetings, he made a series of constructive and pragmatic proposals and held bilateral meetings with trade ministers from the Lao PDR, Brunei, Malaysia, the ROK, the Philippines, Russia, New Zealand and Canada. On behalf of China, Minister Gao delivered a positive message to the parties attending the meetings, that countries should work together to tackle the downward pressure on world economy and join forces to expand consensus on cooperation. He raised China’s proposals regarding regional economic cooperation, maintaining that the various free trade arrangements in this region should be more open and inclusive, draw on each other’s strength, and support each other’s development, and insisted that regional affairs should be managed through consultations among all parties. These proposals shored up all parties’ confidence in regional economic integration, won broad recognition and positive response from the ministers, and helped shape the broad consensus reached at the two-day long AEM and related meetings. With broad consensus reached amongst all parties on promoting connectivity, intensifying production capacity cooperation, promoting trade and investment, and accelerating regional economic integration, the meetings have been a strong push for trade and economic cooperation in the Asia Pacific region and laid a solid foundation for reaching pragmatic outcomes at the upcoming Leaders’ Meeting in September.

On 5 August, Minister Gao Hucheng had a meeting with Secretary of Trade and Industry Ramon M. Lopez of the Philippines in Vientiane, Laos. It was the first official bilateral meeting between the two trade ministers since President Rodrigo Duterte of the Philippines was sworn in. In the meeting, the two sides had in-depth discussions on key areas of Sino-Philippine commercial cooperation such as strengthening planning and coordination on trade and economic cooperation, expanding bilateral trade and deepening cooperation on two-way investment, infrastructure and tourism, and reached broad consensus. Both sides said that despite the differences that exist between the two countries, such differences are not the whole of the two countries’ relations. The two sides have both the ability and wisdom to manage, control and address the differences. Sino-Philippine trade and economic cooperation is an important driving force for the bilateral relations to move forward, and brings tangible benefits to the two peoples. The two sides agreed to resume the Sino-Philippine Joint Trade and Economic Committee mechanism in the near future. Minister Gao Hucheng invited Secretary Lopez to visit China soon. Secretary Lopez accepted the invitation with delight.

Dragon TV: Recently, the State Council decided to make provisionary adjustments to 51 policy regulations in the pilot free trade zones. What are the considerations behind this? Should relevant provinces and the State Council departments make policy adjustments accordingly?

Shen Danyang: In order to ensure the smooth implementation of relevant reform and opening up measures at the pilot free trade zones according to law, the State Council, based on the NPC’s decision that granted the former with the mandate for administrative examination and approval concerning provisionary adjustments to relevant laws and regulations in the four pilot free trade zones, and according to the plans for the four pilot zones, published on 1 July 2016 The Decision Regarding the Provisionary Adjustments of Relevant Administrative Laws and Regulations, State Council Documents and Departmental Regulations Approved by the State Council in the Pilot Free Trade Zones. The Decision sets out provisionary adjustments of 18 administrative laws and regulations including the Implementation Rules of the Law of the People’s Republic of China on Foreign-Capital Enterprises, 4 State Council documents including the State Council Decision on the Reform of the Investment System, and 4 departmental regulations approved by the State Council including the Catalogue for the Guidance of Foreign Investment Industries (Amended in 2015).

We emphasize that reforms and opening up measures in the pilot free trade zones should be carried out according to law. Making these provisionary adjustments can help further deepen reform and expand opening up in the pilot free trade zones according to law, and contribute to better developed pilot free trade zones with greater experimental and exemplary effects for other regions.

According the State Council decision, relevant State Council departments and the People’s Governments of Tianjin, Shanghai, Fujian and Guangdong should make adjustments to their own regulations and normative documents accordingly, and establish administrative systems that are compatible with the requirements of the pilot free trade zones.

China Business News (CBN): My first question is the merger of Didi and Uber which has caught close attention of the market. How do things stand now? Does MOFCOM think their merger should fulfill the filing requirement of concentration of undertakings? My second question is about private Chinese businesses. In the first seven months of this year, private enterprises’ exports and imports grew faster and have a notable rise in China’s total foreign trade compared with last year. Why? Does this mean that the stabilization and growth of China’s foreign trade is mainly driven by the private sector?

Shen: The media are paying close attention to Didi’s announcement that it has reached a strategic agreement with Uber. We already responded to this in the press conference early this month. Given close media attention to this issue, please allow me to add a few points. According to Provisions of the State Council on Notification Thresholds for Concentrations of Undertakings, concentration of undertakings is notified on the basis of business turnover. The Measures on Notification of Concentration of Undertakings released by MOFCOM stipulate how business turnover be calculated. Businesses should closely follow relevant provisions in calculating their turnover and file notification. If some business should file notification to MOFCOM, but fails to do so before its merger, it will be held legally accountable. According to Article 4 of Provisions of the State Council on Notification Thresholds for Concentrations of Undertakings, where a concentration of undertakings does not reach any of the thresholds specified in Article 3 of the Provisions, but facts and evidence collected in accordance with the prescribed procedures establish that such concentration effects, or is likely to effect, the elimination or restriction of competition, MOFCOM shall initiate an investigation in accordance with law.

Your second question is about fast growth in foreign trade by private Chinese enterprises. The statistics in my briefing just now indicates that since this year foreign trade of private businesses, particularly exports, enjoys robust growth momentum, be it export growth or its share in China’s total. Recent years have seen growing dynamism in exports by the private sector. In the first seven months this year, private businesses exported RMB 3556.2 billion, up 3.6% year on year, much higher than China’s average export growth. It accounted for 46.8% of China’s total exports, up 2.2 percentage points over the same period last year.

The private sector’s notably better performance in exports is attributable to its flexible operation and growing capability in market exploration and innovation. In terms of export destinations, private businesses’ export to emerging market economies has been growing quickly. In recent years, emerging market economies are on the rapid rise, while developed economies are suffering the financial crisis and sluggish recovery in their market demand. Private Chinese businesses seized this opportunity and expanded their market with fruitful gains, particularly in emerging market economies. In terms of way of trade, private Chinese exports usually do general trade, which is firmly based and quite stable. In particular, new business models such as market procurement, cross-border e-commerce and general service business have emerged, which have become important growth drivers in China’s foreign trade. Private enterprises are the main players in this new trend. In terms of product mix, private Chinese companies mainly export telecom equipment, household appliances, automobiles, lighting equipment and daily consumer goods. Compared with other sectors, market demand in these sectors enjoys quite good growth. Moreover, demand for daily consumer goods is largely rigid, which means it will be less affected by market fluctuations.

We believe, as we are building and improving the new open economic system, private Chinese businesses will continue to enjoy robust growth, become more competitive internationally and play a more important role in the sustained growth of China’s foreign trade. Thank you.

Global Times (English Edition): After the United States took on China in the WTO over export duties of nine metal and mineral products, the EU launched a legal challenge against China in the WTO on July 19, accusing China of not removing export duties on eleven raw materials, including graphite, cobalt and copper? What’s your comment?

Shen: This is nothing new. The United States and the EU keep raising this issue. We have stated China’s position for a number of times. China always respects WTO rules. In introducing export administrative measures on those raw materials, China has given overall consideration to its resource bearing capacity, requirements for ecological protection and requirements by WTO rules. We believe these export restrictive measures adopted on the basis of balanced consideration are not only conducive to sustainable economic development and orderly use of resources and the environment, but also conform to WTO rules.

Therefore, China will properly handle this dispute in accordance with WTO dispute settlement procedures and continue to administer its exports in accordance with WTO rules for healthy development of its foreign trade.

Thank you.

China News Agency: We noted MOFCOM’s statement on August 4th, which expressed regret over the EU decision on steel anti-dumping. Does it mean that a new round of trade war has broken out between China and the EU given global excess capacity in the steel industry? What’s China’s comment on frequent trade protective measures by the EU in the steel sector? (2016-08-17 11:37:36)

Shen: First, China does not agree that a new round of China-EU trade war has or will break out, but China is very concerned about rising protectionist tendency of the EU in the steel sector. It is regretful that, facing protectionist calls, the EU has adopted trade remedy measures and a series of unfair and unreasonable practices that have violated international rules against many Chinese steel products. The EU has tightened its policy on steel trade with tougher measures, more frequent investigations and rising protectionist tendency.

It is worth noting that Chinese steel products account for less than 5% of the EU steel market, which means it cannot bring disruption to the EU steel industry. So what is the root cause of the current difficulties facing the EU steel industry? Many experts and reasonable people have identified that the current difficulties do not lie in trade, but in sluggish economic growth. If the EU can’t recognize that it is about growth but adopt such erroneous practices as trade protection and restriction on fair market competition, then it will get lost on the development direction of its steel industry. Therefore, we hope the EU will conduct rational analysis and take an objective view of the challenges facing its steel industry. It should engage the media in a positive way and be cautious in launching trade remedy investigation and adopting trade restrictive measures, rather than frequently send trade protection signals and inflame trade protectionist sentiments.

It should also be pointed out that the China-EU steel trade is mutually beneficial. China’s steel market is open and China imports a large amount of steel from the EU. China’s steel exports help the EU build infrastructure in difficult times and bring tangible benefits to consumers and some businesses in Europe. It has also made the downstream industries in Europe more competitive globally. In addition, the EU has also benefitted from the development of China’s steel industry. For example, a lot of steel production equipment in China is imported from the EU. Therefore, China and the EU have broad potentials and space for cooperation. We are willing to work more closely with the EU to properly resolve the problems facing the steel industry.

The Chinese government is always in favor of cautious, restrained and standardized use of trade remedy measures. They should be used in a fair, equitable and transparent way according to WTO rules. We hope the EU will abide by relevant WTO rules and fully protect the rights of Chinese companies to defend. We advocate for resolution of frictions through consultation, exchanges and cooperation between the two industries in order to realize win-win outcomes. There are already such successful precedents. Of course, goodwill alone is not enough. We have to take countermeasures if necessary. We will take legal means and concrete steps to protect the lawful rights and interests of Chinese enterprises. Thank you for your question.

International Business Daily: Statistics show that online retail in the countryside beat that of the cities in the first half of the year. Could MOFCOM share a more rounded picture? Could you shed some light on the performance of rural e-commerce in the first half of the year? Thank you.

Shen Danyang: Online retail fared very well in the first half of the year. According to preliminary statistics, the total sales of rural online retail stood above RMB 310 billion. In breakdown, the figure for physical goods was over RMB 200 billion; services, or intangible goods sold online exceeded RMB 110 billion. Besides, in the first six months of the year, national online agro-produce retail hit RMB 50 billion.

This year, rural online retail has continued to grow rapidly, far outperforming the cities. In the first quarter, rural online retail booked RMB 148 billion; in the second quarter, the figure jumped to RMB 168 billion, up by 13.48% over the previous quarter, which is over four percentage points higher than the urban growth. The share of rural sales also keeps rising in the national total, reaching 14.14% in the first half.

In the first half of the year, apart from the continuous rapid growth, national rural online retail also registered the following four characteristics:

First, the introduction of the countryside to e-commerce showed initial results. MOFCOM is actively launching e-commerce in rural China, which has been proved effective by the figures of the first half of the year. In central and western China, rural online retail soared 24.57% quarter on quarter, which is more than 10 percentage points higher the growth in the rural areas of more developed regions. The regional development of rural e-commerce is displaying new dynamics.

Second, service-based online retail has boomed. Rural online tourism continued to flourish, reporting RMB 44.535 billion in retail sales in the first half of the year. It accounts for 38.52% of and ranks top among online service retail in the countryside. Tourism comes first in rural online service sales, which is leading cities by 12 percentage points in terms of share in total service sales. Tourism has become a strong pillar for rural e-commerce in services.

Third, physical industries demonstrated distinct features. Among physical goods, apparel, footwear and headgear, home decorations and 3C digital goods ranked top three in rural online retail in the first half of the year, accounting for 44.29% of the sales. Rural areas led by Jiangsu and Zhejiang built upon strong county-level industrial bases and developed advantages in home decorations and furnishings, while food and health products were the mainstay in central and western China, which counted specialty agro-produce, food reprocessing and TCM products among the strongest industries.

Fourth, the categorization of agro-produce in e-commerce advanced markedly. Fruits topped national online sales of agro-produce, followed by tea, herbal products, grain and oil, nuts, poultry, aquatics, vegetables and flowers. These products booked higher sales and bigger shares in online selling, with the top three making up 56.11% of the total. Moving faster in standardization, fruits are gathering pace in online sales, accounting for 22.23% of agro-produce retail conducted online.

Thank you for your question.

CRI: According to the Australian press, Australia recently blocked State Grid’s bid for Ausgrid on the ground of national security. What are your comments on that?

Shen Danyang: A few days ago, the Treasurer of Australia issued a statement in which he discouraged foreign bidders for a 99-year lease of Ausgrid citing national security reasons. We are highly concerned about this matter.

MOFCOM has noted that State Grid, having followed the project for a long time, already entered the binding bidding stage. MOFCOM has also noted that this is the second instance of the year in which the Australian government knocks back Chinese investment proposals. With a marked protectionist proclivity, the decision has grossly dented the enthusiasm of Chinese businesses for investing in Australia.

China and Australia are major trading and investment partners to each other. In late 2014, the bilateral relationship was officially elevated to a comprehensive strategic cooperative partnership, which was followed by the signing and enforcement of an FTA in 2015. Australia has repeatedly stated that it welcomes Chinese investors while making decisions to the opposite effect. MOFCOM would like Australia to work hard to create a fairer, better and more transparent trade and investment environment for Chinese companies. Thank you for your question.

China Business Journal: It is reported that the third round of China-Sri Lanka FTA talks was recently held in Sri Lanka. What is the major progress of this round and what are the next steps? Separately, some media reports that Sri Lanka is working with Chinese companies to create an industrial park in the special economic zone. Is it true? How is it progressing?

Shen Danyang: The third round of China-Sri Lanka FTA talks was held from the 2nd to the 4th of August in Colombo, the capital of Sri Lanka. The two sides conducted comprehensive and in-depth consultations on trade in goods, rules of origin, customs procedures and trade facilitation, TBT, SPS, trade remedies, trade in services, investment, economic and technical cooperation and legal issues. Moving forward, the two sides will speed up the negotiating process to bring about a China-Sri Lanka FTA at an early date and real benefits for the businesses and peoples on both sides.

As for industrial park cooperation, the bilateral practical cooperation in recent years has maintained a sound momentum of development. Chinese companies have invested and undertaken several major projects in Sri Lanka, making positive contributions to local economic and social development. Financed by China EXIM Bank and undertaken by CHEC, the Port of Hambantota is partially operational with two phases of construction completed. Sri Lanka intends to charge Chinese companies with the running of the port and allot the land adjacent to the port for an industrial park to be developed by China.

CHEC has completed the preliminary planning and part of the feasibility study for the industrial park, with plans for ship services, seafood processing, and agro-processing, among other processing and manufacturing industries based on commerce and logistics. It has reached cooperation intentions with several Chinese companies for investing in the park. The construction of the Port of Hambantota and the industrial park will drive the overall development of the south region, which will serve the country’s goal to build a high value-added product processing center, international shipping center and international business center and the two-way investment and capacity cooperation between the two countries. So the company has applied to Sri Lanka for 50 km2 of land. The latter has pledged to offer part of the land needed. Thank you for your questions.

Shen Danyang: This concludes today’s press conference. Thank you.

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