On September 2, the Ministry of Commerce (MOFCOM) held a regular press conference. Shen Danyang, the spokesman, responded to the hot sensitive issues highly concerned by domestic and overseas media. Details are as follows.

1. G20 Hangzhou Summit will be held. What consensus is expected to reach in economy and trade? What’s the expectation of the Ministry of Commerce on the Summit?

A: On September 4-5, the 11th Summit of G20 will be held in Hangzhou, Zhejiang province. The theme of this Summit is "Toward an Innovative, Invigorated, Interconnected and Inclusive World Economy" with four major issues including “innovating growth patterns”, “improving global economic and financial governance”, “rejuvenating international trade and investment” and “promoting inclusive and interconnected development”. The Ministry of Commerce is mainly responsible for the preparation of the latter two issues.

In the past half year, the Ministry of Commerce sponsored 7 working group meetings in trade, investment and development, and ensured the practical economic and trade achievements for the summit through the Trade Ministers’ meeting in July. The summit is expected to achieve fruits in the following 6 aspects: firstly, approve the Working Responsibilities of the G20 Trade and Investment Working Group, and realize the institutionalization of the G20 cooperation on trade and investment policies. Secondly, approve G20 International trade Growth Strategy, and point out the direction for promoting the sustainable development of the world trade and economy. Thirdly, approve the G20 Guiding Principle for International investment, and make historic contributions to strengthening the coordination of international investment policies.
Fourthly, steadily support multilateral trading system and actively promote Doha Round. Fifthly, help developing countries and small and medium sized enterprises to integrate into global value chain. Sixthly, to approve the important documents including the Action Plan of G20, implement the Sustainable Development Agenda 2030, and deepen G20 cooperation on development. After being approved by Hangzhou Summit, the above achievements will realize the transformation from “China Plan” to the collective initiatives and common action of the G20, so as to promote the status and influence of the G20 in international cooperation and stimulate the cooperation enthusiasm of all the parties.

2. Recently, the video and telephone conference on speeding up the innovation of domestic trade circulation and promoting the structural reform of supply was held in Beijing. Vice Premier Wang Yang made deployment on further bolstering reform and innovation of domestic trade circulation. How will the Ministry of Commerce implement it?

A: On August 24, Vice Premier Wang Yang attended the video and telephone conference on speeding up the innovation of domestic trade circulation and promoting structural reform of supply, and put forward 5 requirements on further promoting structural reform of supply in circulation and expanding consumption. The Ministry of Commerce will sincerely implement them, and take targeted measures through “Two-Year Action Plan”, “Five-Year Development Plan” and “Ten-Year Action Guideline”, so as to vigorously promote the structural reform of supply, satisfy the demands for consumption upgrading and promote the stable development of consumption.

“Two--Year Action Plan” means that the Ministry of Commerce will implement the “Action Plan on Accelerating Innovation of Domestic Trade Circulation, Promoting Structural Reform of Supply and Expanding Consumption” within about two years. It also means deepening circulation reform, strengthening innovation and transformation, implementing “Internet + Circulation”, optimizing supply structure, and making efforts to solve the problems of wrong allocation of supply and demand.

The “Five-Year Development Plan” means that the Ministry of Commerce will, according to the 13th Five-Year Development Plan for Domestic Trade Circulation which is to be published, highlight the structural reform of supply and implement the development strategy of circulation upgrading. The plan has 9 tasks of promoting innovation and transformation of entity business, promoting the level of circulation and supply, bolstering the upgrading of consumption structure, promoting the level of circulation informatization, strengthening standardization construction of circulation, promoting the intensive development of circulation, making an overall plan of the coordination development of rural and urban areas, strengthening opening up and cooperation and creating a legalized and convenient business environment. Revolving around 9 tasks, the Ministry of Commerce will make efforts in the following aspects: optimizing the management and operation mechanism, strengthening financial and fiscal supports, adjusting and optimizing tax policies, optimizing the support of land element, promoting the building of talents team, optimizing the statistic and supervision mechanism and implementing the plan promotion mechanism.

The “Ten-Year Action Guideline” means that the Ministry of Commerce will formulate and implement “China 2025 Action Guideline for Circulation”, so as to build a strong country of circulation, make the informatization, standardization and intensification of circulation reach an internationally advanced level, form a relatively thorough legal system and efficient circulation governance system, and build a modern circulation system combining different regions, combining rural and urban areas and combing domestic and foreign trade. We will make efforts to make the“Chinese Channel” become a new advantage of international competition.

There are mainly 5 specific measures recently: firstly, through strengthening the dynamic management of China time-honored brands further cultivating proprietary brands, and through optimizing the supply of service consumption, automobile consumption and green consumption, the Ministry of Commerce will optimize the policy system of supply transformation in the field of domestic trade circulation, so as to expand consumption hotspots. Secondly, through building a unified market, promoting the construction of the traceability system of important products, carrying out the demonstration of the construction of business integrity system and strengthening the striking of infringement and counterfeit, the Ministry of Commerce will persistently rectify and standardize the market order of domestic trade circulation, so as to optimize the supply of consumption environment. Thirdly, through bolstering the interaction both online and offline, accelerating transformation and upgrading of commercial circulation, conducting the plan of “Internet + Circulation”, the Ministry of Commerce will promote the interaction between online and offline, so as to construct new patterns of supply for expanding consumption through multi channels. Fourthly, the Ministry of Commerce will strengthen the infrastructure construction for circulation like wholesale market of agricultural products for public welfare and cold chain of agricultural products. It will strengthen the standardization construction for circulation and optimize the supply conditions for expanding consumption. Fifthly, make a good job in the comprehensive pilot of systematic reform of domestic trade circulation, promote the comprehensive law enforcement in business, speed up the construction of the statistic system of service consumption and the laws and regulations of domestic trade circulation, and optimize the supply mechanism of expanding consumption.


3. The comprehensive demonstration of domestic trade circulation system reform has been carried out for one year in 9 cities including Shanghai, Nanjing and Zhengzhou. What are the effects?

A: In July last year, approved by the Party Central Committee and the State Council, the Ministry of Commerce, together with the related departments, carried out the comprehensive demonstration of domestic trade circulation system reform for one year in 9 cities including Shanghai, Nanjing, Zhengzhou, Guangzhou, Chengdu, Xiamen, Qingdao, Huangshi and Yiwu.

The pilots have realized their expected achievements at present in four aspects including circulation management system, infrastructure development mode, legal business environment and innovative development of logistics mechanism. They have formed a batch of repeatable experiences and models so as to contribute to the circulation development of domestic trade.

For example, Shanghai city will take the initiative to establish a cooperation mechanism for Yangtze River delta regional integration, break regional blockades, strengthen cross-regional coordination and promote regional market integration. It has actively carried out the negative list for domestic trade circulation and the list of duties and rights and built a new circulation management model with business credit as the core. Qingdao has promoted its local legislation pilots for commodity circulation and issued Qingdao Commodity Circulation Market Construction and Management Rules, which is the first pamphlet of comprehensive regional rules to regulate commodity circulation and market management. Chengdu city has established an innovative investment, construction and operation management model for welfare vegetable markets and uniform urban-rural logistics distribution system. Xiamen city established a safeguard mechanism of circulation facility sharing coordinated platform and a consulting system for the lease of large business facilities. Huangshi city established a work mechanism to promote a large market management system with great circulation.

At present, the pilot cities have concluded the preliminary experience list and MOFCOM has entrusted the third party to evaluate them. On the basis of that, we will put forth a repeatable experience list which will be popularized nationwide and carry it out as soon as possible.

4. China and Philippines may launch the joint commission on trade and economy again recently, so when was the joint commission established and then interrupted ? What are the main function and contents of this mechanism? What contributions did it make to promoting China-Philippines trade and economic cooperation in history?

A: China-Philippines Joint Commission on Trade and Economy is at vice-ministerial level and it was originally called China-Philippines Trade Union Committee. The two governments signed an agreement on establishing China-Philippines Trade Union Committee in Manila in April, 1976. The first China-Philippines Trade Union Committee was held in May, 1977. In 2009, China-Philippines Trade Union Committee was officially renamed as China-Philippines Joint Commission on Trade and Economy and the 26th meeting was held in November that year. The 27th meeting was held in August, 2011. Since then, it has been stagnated for five years.

China-Philippines Joint Commission on Trade and Economy is an important channel and platform for inter-governmental trade and economic cooperation. For a long time, the two countries’ departments in charge of business have adhered to principles of equality and win-win cooperation, sustained close exchanges and coordination through this mechanism. They have made overall planning for bilateral trade and economic cooperation, dug out new cooperation opportunity and growth points, tackled problems well and promoted new progress on bilateral trade and economic cooperation through this platform.

The joint commission has played an irreplaceable role in promoting China-Philippines trade and economic cooperation and bilateral friendly ties. The two sides have reached consensus on major issues like bilateral trade, investment, infrastructure, agriculture, and cooperation under the regional and multilateral framework of former joint commissions. For example: proposing policy and suggestion to optimize trade structure, and digging out potential for trade growth; discussing to create favorable conditions for increasing Philippines’ advantageous farm produce’s export to China; boosting two-way investment; carrying out a batch of infrastructure cooperation projects in highway, railway and power station areas; establishing agricultural technological cooperation centers in Philippines to improve the life of local people; strengthening the coordination and support under regional and multilateral framework like China-ASEAN, APEC, Asia-Europe Meeting and WTO. In addition, the two sides conducted in-depth talks on China-ASEAN FTA construction and strongly enhance the negotiations and implementation of the FTA.

The new Philippines government has expressed for more than once that they would like to have dialogue through bilateral channels to improve China-Philippines relation and create favorable conditions for bilateral cooperation. On that basis, Minister Gao Hucheng and Philippines Minister of Trade and Industry Ramon Lopez reached consensus on starting the 28th joint commission this year during the meeting in Laos in early August. They expressed the common wish of promoting bilateral trade and economic relations to go back to normal path of development, leashing a strong signal of strengthening trade and economic cooperation and benefiting people and business of both sides.

5. US Ministry of Commerce announced a preliminary ruling on August 29 that dumping existed in the tyres of trucks and public buses imported from China. On the basis of dumping degree, the US Ministry of Commerce will notify the US Customs to levy cash deposit on the above products. What’s your comment on it?

A: We have noticed the ruling made by the US Ministry of Commerce on trucks and public buses originating in China. The US has begun to launch trade remedy investigation and measures against the tyre products imported from China since 2007. That has severely impeded Chinese normal exports of tyre products to the US and Chinese tyres enterprises are strongly against the US abuse of trade remedy measures. Actually, the frequent limits on Chinese products also affect the interest of its downstream users and some main US tyre enterprises do not support them either.

China has insisted on resolving trade frictions through negotiations and cooperation. We are prudent with trade remedy measures and fight against the trade protectionism. The Chinese side will continue to support its enterprises to defend themselves in accordance with laws and uphold the legitimate rights of Chinese industries by WTO rules.

6. The China-Switzerland FTA, the first FTA that China has signed with European countries, have been implemented for two years. What highlights do we have in bilateral trade over two years?

A: China-Switzerland FTA is one of the highest level and most comprehensive free trade agreements that China has signed in recent years. It has advanced the imports and exports of bilateral advantageous products. China’s main imports include watches and parts, medicine and instruments, and China’s main exports are watches and clocks, electrical equipment, organic chemicals, mechanical appliance and clothing. The FTA has further strengthened the bilateral trade and industrial cooperation and has raised the China-Switzerland trade and economic relations to a new step.

According to the statistics of China Customs, since the implementation of China-Switzerland free trade agreement in July 2014, the bilateral trade volume has turned around from decreasing 27% in 2014 to increasing 1.7% in 2015 and the bilateral trade volume reached US$44.26 billion. Among these, China’s export to Switzerland increased 2.5% and the import from Switzerland increased 1.5%. In 2015, China-Switzerland bilateral trade was 8.7 percentage points higher than the growth of China’s foreign trade, 10.8 percentage points higher than the growth of China-EU trade.

Under the circumstances of the generally bleak global trade, the bilateral trade between China and Switzerland in the first half of this year, China’s export to Switzerland in particular, maintains a favorable momentum. According to China Customs, in January-June, China-Switzerland bilateral trade volume exceeded RMB100 billion, reaching RMB100.25 billion. Among these, China’s export reached RMB9.848 billion, up 5.6% year on year, 8.1 percentage points higher than the average export growth of the whole country.

At present, both sides are working on the next implementation work of the agreement. We believe that, in time, China-Switzerland free trade agreement will exert more positive influence on the trade and investment promotion and benefit more enterprises and the people of the two countries.

7. There were reports that McDonald’s and KFC would sell Chinese operation power. Is it true? What is the situation of the newly established fast food service enterprises invested by foreign businessmen?

A: In the fourth quarter of 2015, Yum announced that it planned to split Yum Restaurants and Yum China into two separate listed companies with strong development potential, and declared that this move was business strategy adjustment for optimizing the capital structure, which would stimulate the growth potential and create more value. Yam plans to expand the operation scales, products and services in China in the future. Chinese business accounts for half of the global business of Yum. In 2015, the turnover of Yum China exceeded RMB50 billion. Yum has full confidence in its long-term development prospect in China.

McDonald’s decided to let its already set up McDonald’s in China to bring in strategic investors in the first half of this year. This is to realize win-win cooperation, complement each other’s advantages and speed up business development. After adjustment, McDonald’s continues to possess the shares of the new company. According to information, in 2015, McDonald’s increased RMB1-billion investment in China. By now, McDonald’s has opened more than 2,200 restaurants in China. In the next five years, McDonald’s plans to newly open about 250 restaurants every year in China. At that time, Chinese mainland will become the second largest market of McDonald’s following the United States.

In January-July 2016, foreign investors newly set up four fast food service enterprises in China, with an actual foreign investment input of US$57.37 million, up 69.1% year on year. By this July, foreign investors had set up more than 400 fast food service enterprises in China accumulatively, with an actual foreign investment input of about US$520 million.

In recent years, Chinese catering industry has been steadily picking up. In 2015, its turnover’s proportion in the total retail sales of consumer goods exceeded 10% and the contribution of catering industry to the national economy was increasingly obvious. We believe that the foreign fast food service enterprises will continue to be optimistic about Chinese market, and will invest in China and share the bonus of Chinese reform and opening up and the economic development.

8. Marriott International and Starwood Hotels and Resorts Worldwide have recently said that the Ministry of Commerce had decided to prolong the review period of the merger of Marriott International and Starwood hotels. Is it true? Besides, Comcast Corporation has completed the acquisition of DreamWorks Animation and said that they will vigorously develop Chinese animated movie and theme park businesses. How will the MOFCOM comment on this?

A: MOFCOM filed and checked the case of Marriott purchasing Starwood Hotels on April 11，2016. This case entered a further review stage on May 11，2016. On August 9 2016, the case entered a stage of prolonging the further review. The deadline of this stage is October 7 2016. At present, MOFCOM is investigating this acquisition case according to law. The commodity market and regional market related to this case is complex. We will assess that if this concentration will exert adverse negative influence on the competition. On the bases of comprehensive and profound investigation, we will make objective and fair decision of examination according to law.

Recently, MOFCOM has received the report of Comcast Corporation purchasing DreamWorks Animation, saying that this deal will exert negative influence on the relevant market competition of China. To this end, MOFCOM will investigate and verify the report case according to the Antimonopoly Law and the relevant regulations.

9. Has the MOFCOM conducted an anti-monopoly investigation on the merger case of Didi and Uber? How is the investigation going?

A: On August 1 2016, Didi announced to reach a strategic agreement with Uber Global and would purchase the whole assets of Uber China. On August 2, both sides performed the registration procedure of shareholding transfer and completed the delivery. This case didn’t declare to the MOFCOM before. After the extensive attention caused by this case in society, someone reported to the MOFCOM that the disputing parties of this case didn’t declare according to law.

MOFCOM is conducting investigation on this case according to relevant laws and regulations such as the Anti-monopoly Law, the Regulations of Declaration Standards of Concentration of Undertakings by the State Council, the Declaration Measures of Concentration of Undertakings and the Interim Measures of Investigation and Disposal of Declaring Concentration of Undertakings Failing to Pursuant to the Law. Up to now, MOFCOM Anti-monopoly Bureau has met with Didi twice, asking them to explain the transaction and the undeclared reason, to submit relevant documents, materials according to the problem list proposed by the MOFCOM, to have an informal discussion with relevant departments and enterprises and to know the operation pattern of taking a taxi by internet and the relevant market competition situation.

Next, the MOFCOM will continue to promote the investigation work of this case according to law, protect the fair competition of the relevant market and safeguard the consumer benefits and the public interests.

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