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Regular Press Conference of the Ministry of Commerce (November 24, 2016)

MOFCOM held the regular press conference on November 24. The press secretary Shen Danyang answered the hot and sensitive questions to the high concern of both domestic and overseas media.

1. The China-US Joint Commission on Commerce and Trade has just concluded. Can you introduce the relevant situation of this conference? Does this conference obtain any new achievements?

A: The 27th China-US Joint Commission on Commerce and Trade was successfully held in Washington, the capital city of the United States on November 21-23. The Vice Premier of the State Council Wang Yang, the U.S. Secretary of Commerce Penny Pritzker and the U.S. Trade Representative Michael Froman jointly presided over the conference. Both China and the United States sincerely communicated with each on the common concerned trade and economic issues. The delegations and business circles of both sides profoundly communicated, reached many consensuses and obtained positive fruits, which brought to a successful conclusion for China-US trade and economic high-level dialogue this year.

The China-US trade and economic relationship is the ballast and thruster of the China-US bilateral relationship. Since the establishment of the diplomatic relations 37 years ago, the China-US trade and economic cooperation scale has been constantly extended and the field has been continuously expanded. No matter how the international situation changes, the trade and economic relationships between China and the United States continue to develop so as to bring tangible benefits for the peoples of the two countries. In 2015, China is the biggest trade partner of the United States, the third largest export market and the largest source of imports. The United States is the second largest trade partner of China, the biggest export market and the fourth largest source of imports. According to the statistics of China, the bilateral trade volume of goods reached US$558.4 billion in 2015 and the two-way investment inventory exceeded US$160 billion. The cooperation achievements made by China and the United States are the fruits the two countries in the trend of history, attributable to their positive participation in economic globalization and strong win-win cooperation.

As one of the first high-level trade and economic dialogue mechanisms established by the governments of the two countries, the China-US Joint Commission on Commerce and Trade has been successfully held 26 times since its first Joint Commission in 1983. During the 27th China-US Joint Commission on Commerce and Trade, both China and the United States profoundly exchanged views on significant concerned issues such as export control, trade remedy, certificate obtaining and implementation overseas, agricultural products inspection and quarantine, civil aviation service, investment in the United States, agricultural biotechnology, innovation policy, over capacity, drug and medical equipment, Standardization Method and integrated circuit, etc. Besides, the two countries enhanced understanding, strengthen communication and obtained consensuses in many fields.

During two and a half days, the government delegations and business circles of the two countries closely communicated with each other and successively held a series of activities such as China-US entrepreneurs’ round table conference, digital economy seminar, agriculture food partnership seminar and luncheon party of business circles, g to many fields such as digital economy, enterprise development and agricultural food security. These provided platform for the communication between people of business circles and government officials and practically enriched the trade and economic connotation of the new pattern of relationship between great powers. At this conference, both China and the United States spokes highly of the irresponsible role of the Joint Commission in expanding the bilateral trade and economic cooperation and maintaining the stability of the China-US trade and economic relationship.

2. At the just ended 24th leaders’ informal conference of the APEC, the leaders of 21 economies approved the collective strategic research of the free trade areas of Asia Pacific and jointly issued the Lima Declaration of the Asia-Pacific FTA. How does the MOFCOM comment on this? Besides, recently, some foreign media thinks that the TPP has been dead, and the RCEP is expected to be reached. How does China view these analyses?

A: The leaders of the 21 economics of the APEC have just jointly issued the Lima Declaration of the Asia-Pacific FTA, put forward the specific policy suggestions of finally realizing the Asia-Pacific FTA, further defined the goal and principle of the Asia-Pacific FTA, made a comprehensive plan for promoting the work of the Asia-Pacific FTA and systematically established the report mechanism of promoting the work of the Asia-Pacific FTA.

China is always the positive pusher and participant of the economic integration and economic globalization of the Asia-Pacific region. We believe that the accomplishment of collective strategic research of the Asia-Pacific FTA and the publication of Lima Declaration are of great significance, marking the first substantive action realized by the collective action of the economies of the APEC from the vision of the Asia-Pacific FTA to action. It is also a powerful response to the substantive launching of the Asia-Pacific FTA which was decided by the 2014 Beijing Leaders’ Conference of the APEC. It further strengthens the favorable development momentum of the Asia-Pacific FTA. China is willing to continue to work with all parties of the APEC to jointly implement the Lima Declaration according to the instructions of leaders and to save energy for finally realizing the Asia-Pacific FTA.

China has noticed the comments and views on the prospects of TPP and RCEP recently. RCEP is the negotiation initiated and led by the ASEAN. At present, all members have held 15 rounds of negotiations and four trade ministers meetings. China will make efforts to work with all negotiating parties on the basis of fully respecting the core status of the ASEAN, strive to finish the negotiation as soon as possible and make contributions to the development of the economic integration of the Asia-Pacific region. China will continue to focus on deepening reform and expanding opening up, center on realizing the goal of “two one hundred years”, fully consider China’s national conditions and industrial development situations and positively participate in the multilateral and bilateral trade arrangement regardless of the further development of TPP and RCEP. At the same time, China will continue to closely cooperate with the members of the WTO, constantly strengthen the role of the multilateral trade system, create a more free and convenient environment for the global trade and jointly make contributions to the integration process of local region and the development of the world economy.

3. China and Chile have jointly announced to officially launch of the upgrading negotiation of China-Chile FTA. What’s the special background of the upgrading negotiation? What fields will the upgrading negotiation cover?

A: On November 22, during President Xi Jinping’s state visit to Chile, Chinese Minister of Commerce Gao Hucheng and Chile Foreign Minister Heraldo Muñoz jointly signed the Memorandum of Understanding between Chinese Ministry of Commerce and Chile Ministry of Foreign Affairs on Launching Upgrading Negotiation of China-Chile FTA, announcing the start of the upgrading negotiation.

China-Chile FTA was signed in November 2005, and took effect in October 2006, mainly covering the contents on trade in goods and cooperation. It is the second FTA signed between China and foreign countries, and also the first FTA signed by China with Latin American countries. To further promote bilateral cooperation in service and investment, China and Chile signed the supplement agreement on service trade in April 2008, which came into effect in August 2010. In September 2012, the two parties signed the supplement agreement on investment which took effect in February 2014. The signing and implementation of the above agreements drove the fast development of bilateral economic and trade relations. At present, China has become the largest trade partner, the largest import source and largest export destination of Chile in the world.

In November 2014, during President Xi Jinping’s meeting with Chile President in Beijing, the two parties agreed to take the opportunity of the all-round completion of China-Chile FTA to exploit bilateral trade potential, continuously deepen trade structure, seek and cultivate new growth points, and boost the stable growth of bilateral trade.

Seeing that the upgrading of China-Chile FTA will contribute to deepening and strengthening China-Chile bilateral relation, and boosting economic and trade relation, in May 2015, during Premier Li Keqiang’s visit to Chile, the two parties announced to launch the joint study of the upgraded China-Chile FTA.

After one-year effort, the two parties reached consensus on the coverage range and guidance principle of the upgrading negotiation, deciding that the future upgrading negotiation will cover many fields including trade in goods, service trade, trade rules and economic and technological cooperation.

4. It is reported that the Japanese Ministry of Finance planned to remove 5 countries including China and Mexico form the tariff concession list of developing countries. The reason was that Japan thought that those countries are developing continuously, and the necessities of assistance have declined. What’s the opinion of the Ministry of Commerce?

A: We have noticed the related reports. China has still been the largest developing countries in the world. China’s economic aggregate ranks the second in the world, but there are still great gaps between China and developed countries on the per capita GDP, between urban and rural regional developments and social welfares. China still has a long way to go in order to realize modernization.

At present, the world economy still witnesses a weak recovery. International trade and investment are depressed. China and Japan are both large trade countries, and are important economic and trade partners of each other. China and Japan have great economic complementarity, and their development cooperation dovetail with the interests of the two parties. China hopes that the two parties will make joint efforts to promote the healthy development of China-Japan economic and trade relations and make contributions to the world economic growth.

5. The Ministry of Commerce issued related data of China’s service outsourcing development in January-October this year. We noticed that the contractual value and executed value of China’s service outsourcing kept a rapid growth. Could you give us a further analysis?

A: Yesterday, the website of the Ministry of Commerce issued the related data of China’s service outsourcing development in January-October this year. In the first 10 months, the newly signed contractual value was up 9.5%, and the executed value was up 6.9%. It looks good generally, but analyzing through structured data, we could see that the development of service outsourcing also show ups and downs affected by the current international economic trend.

Firstly, business process outsourcing performed best. In January-October, the data processing service, supply chain management service and call center service undertaken by Chinese enterprises increased by more than 50%, which is the main cause of the rapid growth of business process outsourcing. The executed value of offshore business process outsourcing and knowledge process outsourcing were RMB 54.42 billion and RMB 117.05 billion respectively, up 26.9% and 5.3% respectively. The executed value of off-shore information technology outsourcing was RMB 157.48 billion, the same as that of last year.

Secondly, the service outsourcing of the provinces of the up and middle reaches of Yangtze River Economic Zone witnessed a rapid growth. In January-October, the contract value of offshore service outsourcing undertaken by provinces and municipalities along Yangtze River Economic Belt was RMB 248.56 billion, up 5.2%; the executed value was RMB 201.63 billion, up 3.1%. Among these, the offshore service outsourcing of provinces in the up and middle reaches like Hunan, Jiangxi and Chongqing grew rapidly, with the executed value RMB 2.38 billion, RMB 2 billion and RMB 5.85 billion respectively, up 45.1%, 39.4% and 17% respectively.

Thirdly, growth of offshore service outsourcing business undertaken by enterprises slowed down. In the first 10 months this year, the executed value of offshore service sourcing undertaken by Chinese enterprises was up 5.7%, 2.1 percentage points slower than that of the first three quarters. The main reason is that the US$-RMB exchange rate increased largely in October and the enterprises’ willingness to convert foreign currency to RMB decreased, which made the executed value of offshore service outsourcing in October fall by 12.7%. The executed vale of offshore service outsourcing of major provinces and municipalities like Shanghai, Beijing and Shandong was down 47.1%, 41.9% and 40.3% year on year respectively.

Besides, the service outsourcing market of countries along “Belt and Road” sometimes increased and sometimes decreased. In January-October, the executed value of service outsourcing undertaken by Chinese enterprises in Russia and Central Asia, Central and Eastern Europe was RMB 3.74 billion and RMB 2.11 billion, up 5.5% and 30.1% respectively; that in Southeast Asia was RMB 31.03 billion, the same as that of the previous year; those in South Asia, and West Asia, North Africa were RMB 7.39 billion, and RMB 7.59 billion, down 16% and 14.3% respectively.

6. Affected by cold air, extreme weather like strong wind and heavy snow spreads across the country. Has MOFCOM taken emergency measures to safeguard market supply facing extreme weather changes recently?

A: MOFCOM has guided local business departments to adopt emergency measures to cope with the extreme weather actively. 1. Strengthen market supervision and emergency duty. Efforts were made to acquire information of market supply and demand and price changes. We have released information in time, guided consumers and stabilized expectations through various ways. We also designate special person to charge, ensure contacts for 24 hours, pay attention to the possible impact on life necessaries market because of weather changes and make sure to respond to any emergency timely. 2. Make good preparation for emergency. We sort out the database of emergency goods, know the repertory and location of necessaries. Besides, we are ready to launch emergency plan and to dispatch goods at any time. Tianjin and Shaanxi have increased vegetable reserve and strengthened check on the storage enterprises of collection and storage of necessaries (grain, oil and meat) to ensure quantity and quality safety. 3. Make active efforts to organize the source of gooods. For example, Beijing launched emergency plan, required major retail markets to play the role of vegetable base and large seller, prepared for vegetable source, transport arrangement and warm measures in advance, and strengthened allocation, which is to safeguard enough the quantity of varieties of supplies.

Regarding the domestic markets, the market supply is sufficient and prices of life necessaries are stable. According to the watchdog of MOFCOM, last week (November 14-20), the price index of national edible farm products fell by 02% week on week. In terms of the main categories, the prices of grain and edible oil rose slightly, up 0.1% and 0.3% respectively. The prices of meat also increased, with those of pork, beef and mutton up 0.5%, 0.6% and 0.8% week on week respectively. The prices of poultry decreased, with those of chicken and duck down 0.4% and 0.2% respectively, and that of eggs remaining unchanged. The average price of 30 kinds of vegetables fell by 2.2% week on week. Next, MOFCOM and local commercial departments will continue to monitor market and provide emergency supply to strive for sufficient supply and stable price.

7. On November 21, the first direct freight train from Tianjin Pilot Free Trade Zone to Europe was launched. How about the present China-Europe freight trains? What positive impacts do they have on promoting China-Europe trade?

A: According to incomplete statistics, since the first train was put into use in January 2011, the number of departure cities of China-Europe freight trains has reached 25, and the trains have reached more than 10 distributing centers across 10 countries overseas. Among these, 8 departure cities such as Chongqing, Chengdu, Zhengzhou, Wuhan, Changsha, Suzhou, Dongguan and Yiwu have launched uniform brand of China-Europe freight train on June 8, 2016. The China-Europe freight trains have unleashed the potential of Eurasian land logistics and trade channels, promoted trade and economic cooperation between China and border countries as well as other European countries, and become an important carrier to enhance the “belt and road” construction.

The China-Europe freight trains start new channels for the inland regions to trade with Eurasian countries. Railway has its unique advantages, which is more efficient than maritime transport and more economical than air lift, especially suitable for cross-border port-to-port transport between inland cities and is significant to realize trade between China’s inland districts and Eurasian countries. With the increase of China-Europe freight trains, goods sources have become richer, which drives regional development with stronger and more influential capacity. Besides, China-Europe freight trains invigorated Chinese investment in countries along the “belt and road”. With the development of China-Europe freight trains, Chinese enterprises have stronger intention of engaging in the relevant countries’ infrastructure construction in railway, port, load and unload, distribution and logistics areas. At present, many enterprises begin to set up sites for investment, , establish distribution centers and overseas branches in relevant countries and build transport stations and storage houses.

8. Data shows that in January-October, national catering revenue grew 10.9% year on year. What are the main factors for continuous “picking up” of catering industry? Is popular catering still the main force? Why can the catering transformation be successful?

A: According to statistics by National Bureau of Statistics, the catering revenue in the first ten months grew 10.9%, hitting a new high along with the sound momentum of development in recent years. In October, the catering revenue of units above the designated size reached RMB85.48 billion, up 4.7% year on year, with positive growth for 25 months in a row since October, 2014. Overall, the catering development has unleashed strong vigor and some high-end catering business also reversed the slowdown situation through transformation.

In recent years, catering revenue has maintained an annual growth of 10%, which mainly can be attributed to the fact that popular catering has become the stable main force. It is also because that MOFCOM has promoted catering industry to follow the trend and meet the market demands, build new ideas of development, take initiative in innovation and transformation in accordance with the spirits of Eight Rules proposed by the central committee. That is reflected in three aspects:

1. Meet the requirements of supply-side structural reform and constantly optimize the supply structure of catering industry. At present, catering industry has gradually formed a landscape featuring popular catering with balanced development of various types of catering industry. According to the statistics by National Bureau of Statistics, in January-October, the market share of catering business below the designated size reached 74.5%; most of those above the designated size also satisfy the popular demands, so their market share both exceeded 80%. Other business types like special chain stores and food street stalls satisfy young consumers’ characteristics needs, breakfast, fast food, group dinner, and special snack meets the needs of the elderly in community and the primary and secondary school students, and online ordering and semi-finished package could satisfy the needs of the people with salary.

2. Meet the requirements of ideas of new development, and “Internet+catering” integration innovation is speeding up. Catering business actively uses O2O integration innovation, combines online capital flow and information flow with offline logistics, experience and services, creates smooth consumption channels, reduces cost and develops fast, convenient and beneficial service models. According to iResearch, in 2015, the size of national online catering market grew 45.0%, 33.8 percentage points higher than the overall growth of catering industry.

3. Meet the mass needs to develop marketable goods. With rising life level and fast pace of life, consumers tend to be fond of safe and nutritious snacks. The catering industry should actively cater to market demands, develop popular catering network and brands, popularize characteristic products and provide professional and intimate services to win extensive recognition from consumers.

We believe that with continuous promotion of transformation, constant optimization of supply-side structure and acceleration of integration innovation, China’s catering industry is bound to sustain the sound momentum of development.

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

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