Friends from the media:
Good morning! Welcome to the press conference today. Next, I will brief you China’s development in foreign trade and the situation of other commercial work, and answer your questions.
I. Foreign trade in January-November and that in November
According to statistics from the Customs, in January-November, China’s import and export reached RMB 21.8 trillion, down 1.2% year on year. Among these, the export reached RMB 12.5 trillion, down 1.8%; the import amounted to RMB 9.4 trillion, down 0.3%.Though the growth of import and export was still negative, the decreasing growth rate of China’s foreign trade development continued to slow down thanks to the effects of the policies that promote the stable development of foreign trade. Meanwhile, foreign trade structure is further optimized, development power is gathering, and our foreign trade maintains its stable and promising trend.
1. Import and export of November realized positive growth. In November, the export and import were up 5.9% and 13% respectively. In terms of export, the monthly decrease of foreign trade export has slowed down for two consecutive quarters since March, and the monthly export reached the highest volume within the year. Import has witnessed positive growth for four consecutive months since August and realized the largest monthly increase in recent 3 years.
2. Private enterprises were still the major force of export. In January-November, export of private enterprises was up 0.9%, accounting for 46.1% of the national total, 1.4 percentage points higher than that of the same period last year. Export of foreign invested enterprises and state owned enterprises decreased 3.4% and 6.3% respectively.
3. Export of general trade was better than the average. In January-November, export of general trade decreased 1.1%, accounting for 55.1% of the national total and 0.9 percentage points higher than that of the same period last year. Export of processing trade was down 5.2%, but it turned out to have a positive growth of 5.2% in November.
4. Export to traditional markets like EU and Japan realized positive growth. In January-November, China’s exports to EU and Japan were up 1.5% and 1.3% respectively. Exports to part of countries along “Belt and Road” realized positive growth, with exports to Philippines, Russia, India and Thailand realizing 19.2%, 13.8%, 6.8% and 3.0% respectively.
5. Export of large-sized complete sets and products of high added value maintained positive growth. In January-November, export of large-sized complete sets of equipments was up about 9%. In November, the export of mechanical and electrical products was up 5.6%, with export of automobiles, automobile components, electromotor and electric generator rising by 44%, 17.9% and 19.2% respectively.
6. Import and export of new business types of foreign trade enjoyed rapid growth. In January-November, cross-border e-commerce, market purchasing trade and foreign trade’s comprehensive service enterprises maintained the trend of rapid growth, becoming new growth points of foreign trade.
7. Quality and efficiency of import were further improved. In January-November, the import volume of 11kinds of bulk commodities like crude oil, iron ore, natural gas, copper material, and copper ore concentrates increased but the price decreased with the payment decreasing about RMB 440 billion in total, which benefited the enterprises to reduce costs and increase efficiency.
II. Ministry of Commerce will issue the 13th Five-Year Plan for Standardization Construction of Domestic Trade Circulation
Standardization is the technological basis of the transformation and innovation of the circulation industry, and it is also the technological guarantee of standardizing operation practice and market order. In recent years, the standardization of circulation has gained substantial development, but there are still problems that need to be solved, such as the insufficient standard effective supply, and the standard application and implementation mechanism which was still imperfect. On the basis of in-depth study and discussion, drawing on the wisdom of the masses and widely asking for opinions, the Ministry of Commerce compiled the 13th Five-Year Plan for Standardization Construction of Domestic Trade Circulation and planned to issue and implement it recently, which is to implement the strategic deployment of the 5th Plenary Session of the 18th CPC Central Committee on promoting the circulation standardization, to promote the circulation standardization level , the transformation and upgrading of the circulation industry, to reduce circulation cost and enhance circulation efficiency, to optimize market order and promote the supply-side structural reform of domestic trade circulation, .
According to the development concept of innovation, coordination, green, open and sharing, the Plan will sincerely implement the requirements of the government on deepening reform of standardization. Focused on 3 goals like optimizing standardization system, enhancing standardization application level and optimizing work basis of standardization, the Plan put forward 6 major tasks including standards’ system construction, standards’ formulation and revision, standards’ implementation and application, standards’ management system, standards’ basic capacity construction and standards’ internationalization, which made the major fields clear and put forward 4 guarantee measures.
The Plan mainly has the following features:
1. The major fields of standardization work are highlighted. The Plan pays attention to the combination of demands-orientation and problems-orientation. According to the urgent standardization demands of China’s domestic trade circulation development during the 13th Five-Year Plan, the Plan determines five major fields including agricultural products circulation, commercial and trade logistics, e-commerce and traceability system of major products. The Plan also rolls out several supporting projects, with an emphasis on gathering all strength to make up for the weakness of standardization in related fields.
2. Implementation and application of standards are highlighted. The Plan optimizes the promotion mechanism of standards implementation, innovates the application and popularization methods of standards, makes full play of the role of related associations and enterprises, makes exploration to establish evaluation system of standards implementation to further strengthen the implementation of standards.
3. Joint efforts made by different parties are highlighted. The Plan encourages associations, domestic and foreign enterprises, as well as local governments to participate in the formulation and implementation of standards. It encourages the development of association standards, local standards and enterprises standards, making full play of the strength of different parties, which create public, transparent and open standardization work surroundings.
The full text of the Plan will be issued on the website of the Ministry of Commerce, and your attentions are welcomed.
III. MOFCOM Actively Implements 10 Major Cooperation Projects for China-Africa Cooperation
President Xi Jinping put forward “ten major cooperation projects” at FOCAC Johannesburg Summit in December 2015. Over this year, MOFCOM has done much work to implement “ten major cooperation projects” and positive progress has been made in the following three aspects.
1. Implementing China-Africa industrialization cooperation project, jointly building or upgrading a batch of industrial parks. So far, Chinese enterprises have built 20 cooperation zones in 15 African countries with a combined investment of US$5.38 billion. 435 enterprises were attracted to industrial parks with a total output of US$19.35 billion, paying taxes of US$1.62 billion to host country and creating 33,534 jobs. Among these, four cooperation zones have passed the assessment including China-Egypt Suez Economic and Trade Cooperation Zone, Ethiopia Oriental Industrial Park, Zambia-China Economic and Trade Cooperation Zone and Nigeria Lecky Free Trade Area.
2. Implementing China-Africa infrastructure cooperation project and strengthening mutually beneficial cooperation in infrastructure plan, design, construction, operation and maintenance. Strengthening inter-governmental cooperation on one hand, we have signed inter-governmental cooperation agreements with Morocco and Guinea on the sidelines of King Mohammed VI of Morocco and Guinean president Alpha Conde’s visits to China. Efforts should be made to promote the implementation of major projects at the same time. New terminal of Simbel -eyadema international airport has been put into use and become the latest and the most modern terminal in West Africa. The first stage of Nigeria Modernized Railway Project ran into use and became Nigeria’s first standard railway in operation; SEBTA-ADAMA-MIESO railway in Ethiopia has become the first cross-border electric railway and the longest electric railways in Africa, which was designed, financed, carried out, and supervised by the Chinese side and the first electric railway for which China provides technology, equipment and standard. China is responsible for its follow-up operation.
3.Implementing China-Africa public health cooperation project, supporting Chinese enterprises to localize medicine production in Africa and raising the accessibility of medicine in Africa. We have strengthened negotiations Africa to improve the certification level of Chinese medicine production standard through bilateral and multilateral mechanism; in addition, we also introduced market opportunities, policy and measure, and risk prevention on investment and cooperation in Africa through associations, chambers of commerce and agencies. At present, Humanwell Healthcare Group and ZhongLian Guang Shen Medicine had established medical business in Africa; Beijing Tong Ren Tang Chinese Medicine Company opened five branches in the city of Pretoria, Johannesburg and Durban in South Africa to provide local people with TCM diagnosis and treatment, Chinese patent medicine and TCM drink.
IV. New Achievements in Shanghai Cooperation Organization Regional Economic Cooperation
2016 marks the 15th anniversary for the Shanghai Cooperation Organization and it has entered a new stage of development. In the past year, the Chinese side has joined efforts with other SCO members to implement trade and economic consensus reached at SCO Summit, and has made remarkable achievements in promoting regional trade and investment and connectivity construction.
1.Mutual trade and investment maintains sound momentum of development. Since this year, the Chinese side and other SCO members have jointly taken measures to promote SCO trade and investment cooperation. The trade value in January-October amounted to US$75.136 billion, down 1%, the slowdown has been narrowed ( falling by 29.1% last year). Trade structures have been constantly optimized and trade modes innovated. Mechanical and electrical products, hi-tech products and agricultural products have become new engine for trade growth, and cross-border e-commerce has become the highlight. Meanwhile, the mutual investment stock between China and other member countries sustained itse growth and a batch of capacity and economic and technological cooperation projects have been carried out smoothly.
2. The “belt and road” initiative has injected strong vigor into regional economic cooperation. At Tashkent Summit of Shanghai Cooperation held this year, all members reiterated to support the Silk Road Economic Belt initiative and it was written in the summit’s declaration that continuous efforts will be made to implement the initiative and promotion of regional economic cooperation. The idea of inclusive development proposed by the Chinese side accords with development vision and strategy of SCO countries. SCO has become an efficient platform for China to dock development strategies with all SCO members.
3. The “Five-Year Plan” for regional economic cooperation was released. With more than one year’s negotiations through trade ministers’ meeting, all sides negotiated on Measures List for Further Promoting Project Cooperation in 2017-2021 and summited it to the Premiers’ Meeting for approval in November. The measure list covered 38 cooperation measures and projects in seven areas including trade and economic area, Customs, quality inspection and transport infrastructure, indicating direction for regional economic cooperation in the coming five years.
4. Further promoting trade and investment facilitation mechanism construction. President Xi Jinping proposed to provide all sides with talents training, Customs supplies and assist in the construction of quality inspection lab at Tashkent Summit of Shanghai Cooperation. We have completed the establishment of trade facilitation work group under the mechanism of trade ministers’ meeting. Next , we will strengthen overall measures in Customs clearance, inspection and quarantine, logistics transportation and payment and settlement. Besides, we will upgrade business facilitation level of SCO countries in aspects of both soft and hard power. Cross-border E-commerce is popular among people from SCO members and all sides reached consensus on establishing e-commerce business exchanges platform and perfecting regional financing mechanism.
5. Starting a new chapter in connectivity construction. The uniform brand of China Railway Express was officially launched this year and that passing through Central Asian countries grew up 150% year on year; Both sections of China-Russia cross-river railway bridge have been under construction and will be completed in 2018 hopefully, altering the history of no cross-river bridge between China and Russia; International Transit Corridor Western Europe-Western China project is accelerated; Preliminary study on China-Kyrgyzstan-Uzbekistan railway is continuously promoted; the tunnels in Uzbekistan and Tajikistan undertaken by Chinese enterprises have run through successively, improving people’s life on both sides; China and other SCO members jointly implemented SCO Agreement on Facilitation of International Road Transport, enhancing regional connectivity.
V. China-Germany Trade and Economic Relationship Has Made Positive Progress Since This Year and Senior Executive Dialogue of 2016 China-Germany Cooperation Will Be Held
Since this year, China-Germany trade and economic relationship has made positive progress and presented following features:
1. The high-level exchanges are frequent and the trade and economic cooperation mechanism is constantly enriched. Within this year, President Joachim Gauck visited China for the first time, Chancellor Angela Merkel visited China twice and President Xi Jinping and Premier Li Keqiang respectively met with President Gauck and Chancellor Merkel. In June, Premier Li and Chancellor Merkel jointly presided over and held the 4th round of China-Germany government negotiation. Heads of 26 government departments of the two sides took part in this conference and reached consensuses on continuing to implement the Action Plan of China-Germany Cooperation and creating new energy for the upgrading of China-Germany cooperation. MOFCOM and German Ministry of Economics signed the Joint Statement under the Framework of China-Germany Joint Economic Cooperation Committee. Both sides agreed to promote the trade and economic cooperation between Chinese provinces such as Anhui, Sichuan, Liaoning and Germany so as to push forward the economic transformation and upgrading and sustainable development of local regions. Chinese Premier and German Chancellor and the representatives from the China-Germany economic consultative committee held the 3rd symposium. Besides, in November, Minister Gao Hucheng jointly presided over and held the 16th conference of China-Germany Joint Economic Cooperation Committee with the Vice-Chancellor of Germany and Minister of Economy and Energy Gabriel in Beijing.
2. The two-way investment accelerates growth and trade value decremental narrows down. According to China’s statistics, in January-October 2016, the volume of Germany’s non-financial direct investment in China reached US$2.44 billion, up 79.1% year on year, equivalent to one third of the EU’s actual investment to China. China’s volume of non-financial direct investment in Germany reached US$2.21 billion. In particular, the competitive industries such as machine manufacturing, environmental protection and robot were appreciated by Chinese investors and the merger and acquisition project sprung up constantly. At the same time, Germany continued to maintain the status of the largest trade partner of China in Europe. According to China’s statistics, in January-October 2016, China-Germany bilateral trade volume reached US$124.28 billion. Although this number decreased 4.5%, the decremental narrowed compared with the double-digit number in 2015. China’s import from Germany in particular was clearly better.
3. The cooperation between local regions, the third-party markets and intelligent manufacturing have become the new highlight of the trade and economic cooperation between the two countries. At present, local provinces and cities pay more attention to carrying out the trade and economic cooperation in all kinds of fields, including almost 10 cooperation gardens such as China-Germany ecological garden in Qingdao and China-Germany enterprises cooperation base in Taicang. In November, Vice-Chancellor of Germany and Minister of Economy and Energy Gabriel came to China to attend the Guest of Honor Activity of the 16th Western Fair. With the gradual implementation of China’s “Belt and Road” Initiative and the international capacity cooperation, Chinese and German enterprises will enjoy broader opportunities in the third-party markets. The 4th Round of China-Germany Government Negotiation Joint Declaration clearly put forward that both sides will discuss how to promote the enterprises of the two countries to cooperate in the third-party markets under the current mechanism, and how to support China Railway Group and CRRC Corporation Limited and German enterprises to accelerate the strategic cooperation in the third-party markets. Besides, China and Germany made positive progress in the docking between Chinese “Made in China 2025” and German “Industry 4.0”. The pilot demonstration projects between enterprises increased constantly.
4. China and Germany take G20’s rotating chair successively and will join hands to promote the world economic development. In 2016, China assumes the rotating presidency of the G20 for the first time, focusing on the theme of “building innovative, energetic, linked and inclusive world economy” and promoting the G20 to transform from a crisis responding mechanism to a long-acting governance mechanism. During China’s rotating presidency, Chinese government promoted to set up trade investment working group and successfully held the first conference after the institutionalization of the G20 trade ministers’ conference with rich fruits. On December 1 2016, Germany officially took over the presidency of the G20. The G20 Hamburg Summit next year will continue the inclusive development concept which was emphasized at the G20 Hangzhou Summit. China and Germany will work together to make greater contribution to promoting the growth of the world economy and perfecting the global economic governance.
On December 12, “Senior Executive Dialogue of 2016 China-Germany Cooperation” of China-Germany Council of Economic Advisors will be held in Beijing. The Council was officially established in May 2013 when Premier Li Keqiang visited Germany. It is the first bilateral economic cooperation advisors’ mechanism established between China and the major world economy. The Council is composed of representatives from famous enterprises of the two countries. Premier Li said that the Council is the “second pathway” in parallel with the negotiation between Chinese and German governments, aiming at promoting the trade and economic cooperation between the two countries. This mechanism always plays positive role in the development of trade and economic relationship between the two countries. As an annual activity hosted by Chinese Secretariat of the Council, “Senior Executive Dialogue of China-Germany Cooperation” has been held for three times since 2014. This dialogue will focus on the themes of “structural transformation and China-Germany investment cooperation” and “digital economy and China-Germany innovative cooperation”. Almost 80 people such as Chinese members of the Council, representatives of local governments and relevant experts and scholars will attend the conference.
VI. The 5th Conference of China-Thailand Joint Trade and Economic Committee Is To Be Held Today
The 5th Conference of China-Thailand Trade, Investment and Economic Cooperation Joint Committee is held on December 9 in Beijing. State Councilor Wang Yong and Vice Premier of Thailand Somkid jointly preside over this activity. As the highest-level trade and economic cooperation mechanism between the governments of China and Thailand, this conference aims at implementing the cooperation consensuses reached by the leaders of the two countries, deepening the practical cooperation in all fields and profoundly promoting the construction of the “Belt and Road”. Both sides will discuss cooperation in fields such as trade investment, infrastructure, information and communication technology, scientific and technological innovation, inspection and quarantine, finance, tourism, energy, local trade and economy and regional economic integration, etc. After the conference, both sides will sign relevant cooperation documents.
The above is the latest information. You are welcome to ask any questions.
China Radio International: Article 15 of the Protocol on the Accession of China to the World Trade Organization clearly stipulates that the “surrogate country” practice involved in anti-dumping investigations against China shall be terminated on December 11th 2016. However the attitude of some WTO members like the US, the EU and Japan shows that China can hardly be recognized as a market economy. What’s the comment of the Ministry of Commerce?
Shen Danyang: According to Article 15 of the Protocol, the “surrogate country” practice employed by WTO members in anti-dumping investigations against China shall be terminated on December 11th this year. Since that date no WTO members shall adopt the price of a third country under Article 15 to calculate dumping margins in investigations against China.
On the relationship between obligations under Article 15 and the so-called “market economy” issue, the concept of market economy was originated from domestic laws of particular members like the US and EU which were formulated during the Cold War and therefore had strong political undertones in the East-West trade in that era. It should be pointed out that WTO rules do not stipulate on the definition or criteria of market economy.
Some people in the western media intently confuse the market economy concept with Article 15 obligations, put one-sided emphasis on the standards set in domestic laws of a few members, and deliberately dilute the international obligations accorded by Article 15. Such a view is ungrounded in international law. A fundamental principle of international law is that agreements must be kept. It is clear and unquestionable that the international treaty obligation of terminating the “surrogate country” practice in time as requested by Article 15 must be faithfully honored. This obligation has nothing to do with the so-called market economy.
The Protocol, including Article 15, is an international treaty upon which China agreed with all relevant parties when joining the World Trade Organization. It is a part of the WTO rules, and is legally binding. Spirit of contract is the cornerstone of market economy and honoring agreements is the foundational norm of international law. It is the common obligations and serves the common interests of all WTO members to safeguard the sanctity of treaty obligations and authority of multilateral trading system.
China has been strictly abiding by all its accession commitments and obligations and is lawfully entitled to all the rights and interests accorded by the WTO. Many WTO members have promised to abandon the “surrogate country” practice and observe the Article 15 obligations, of which China is appreciative.
However we also notice that a small number of WTO members still maintain ambiguous positions on the issue of honoring Article 15 obligations and attempt to continue the surrogate country practice in anti-dumping investigations against China. We express strong dissatisfaction and firm opposition to it. China wants to stress on the following principle positions: as of December 11th 2016 all WTO members must faithfully honor their obligations stipulated in Article 15 by completely terminating the surrogate country practice; all WTO members shall abide by WTO’s Anti-dumping Agreement and relevant rules, conduct anti-dumping investigations on Chinese products in a fair, reasonable and transparent manner, and shall not extend the surrogate country practice in any disguised forms.
China also urges those members that haven’t honored the Article 15 obligations to do so in time for not affecting the normal development of economic and trade relations with China. As for the small number of WTO members that insist on continuation of the surrogate country practice, China will take necessary action pursuant to WTO rules to defend its legitimate rights and interests.
CCTV News: E-Commerce has developed rapidly in China in recent years with new trends and new situations emerging. Does the Ministry of Commerce have any new ideas on promoting e-Commerce in China?
Shen Danyang: The Ministry of Commerce pays attention both to some key work at present such as e-Commerce in rural areas and integration of e-Commerce and conventional industries and physical marketplace and to some medium-term to long-term development issues. An important job for the Ministry this year was to formulate the E-Commerce Development Plan in the 13th Five-Year Period. After seven months of formulation, this Plan was already reviewed and passed by the executive meeting of the Ministry and will soon be jointly issued by the Ministry of Commerce, the Office of the Central Leading Group for Cyberspace Affairs and the National Development and Reform Commission. More information regarding the details of the Plan as well as follow-up work will be released at the official website of the Ministry of Commerce and your continued attention is encouraged.
Taking this opportunity, I’d like to introduce to you several features of the Plan. First, it is the third Five-Year e-Commerce Development Plan, but it is the first formulated with the Ministry of Commerce as the lead government agency. Therefore we pay special attention to the coherence of this Plan with the two previous plans. On top of the two plans, we made thorough research on the new role of e-Commerce in national economy and new phenomena, and came up with new thoughts. Second, we observed the new developments, new trends and new requirements of e-Commerce, understand accurately the law of the sector and made our stance clear cut, that is, e-Commerce should be promoted and at the same time be governed more effectively. Third, we adopted new formulation methods that suit the e-Commerce sector such as soliciting opinions of Internet users and e-Commerce businesses through our website and other social networks. Fourth, we made sure the new plan is well connected to existing policy papers and guaranteed the coherence and consistency so that there would be policy synergy enabling e-Commerce development.
21st Century Business Herald: There was a recent new release by the Ministry of Commerce and three other government agencies regarding foreign investment supervision. Will MOFCOM or the other government agencies take further steps to regulate foreign investment? Thank you.
Shen Danyang: The four government agencies have made two announcements over this issue and there is no further information to disclose now. We will make timely announcement via our website if there is any new information.
China News Agency: Could you brief us on the situation of steel trade this year? What measures has China taken to address steel overcapacity since the beginning of this year and what progress has been made? Thank you.
Shen Danyang: We have introduced on many occasions the issue of steel excess capacity and trade frictions facing China’s steel export as well as China’s position in this regard.
I want to reiterate that steel overcapacity stems from weak demand caused by the financial crisis and prolonged sluggish world economy. It is a common issue for the global steel industry which can only be addressed by joint efforts and actions by all countries instead of fixing the eyes on China only.
With respect to China’s measures to address the excess capacity, I think there is no need to repeat the fact, which is for all to see, that China is the first country to react with the most concrete, resolute and effective restructuring and decapacity measures. For example, by November 2016, China had met the whole year’s target for steel capacity cuts of 45 million tonnes ahead of schedule. Steel makers have seen profits up since the beginning of this year. CISA members made a profit of RMB 21.47 billion in the first eight months, increasing by RMB 39.35 billion. Thanks to stronger enforcement, no new capacity has been added illegally, illegal on-going projects have been put to a stop and illegal production activities curbed effectively.
It is also worth mentioning that the majority of Chinese steel is used to meet domestic demand and only a small share for export. In the first ten months this year, China exported 92.626 million tonnes of steel with a YOY growth of 0.5% and 11,000 tonnes of billet and ingots. Total export of crude steel reached 96.086 million tonnes, up by 0.5% year on year. Chinese steel import increased by 2.1% year on year to 10.905 million tonnes and billet and ingot import decreased by 2.8% year on year to 267,000 tonnes. Total crude steel import reached 11.578 million tonnes with a YOY growth of 1.9%. The top six export destinations of Chinese steel products in the first ten months were ROK, Vietnam, the Philippines, Thailand, Indonesia and Malaysia, receiving 44.1% of China’s steel export.
China is also a major steel importer. From January to October 2016, Chinese steel import grew by 2.1% compared with the same period of last year. The top six import sources were Japan, ROK, Taiwan, Germany, France and Sweden, accounting for 93.1% of China’s steel import.
However, it was against such a backdrop that 41 trade remedy investigation cases were initiated against China’s steel export by 16 countries and regions in the first 11 months this year. In breakdown, there were 26 anti-dumping cases, eight on countervailing duties and seven on safeguard measures that involved USD 6.8 billion worth of products. The number of cases increases by 24% and value by 59% compared with the same period of last year. Although WTO members have every right to launch trade remedy investigations, they must strictly comply with relevant WTO rules while fully safeguard legitimate rights and interests of Chinese enterprises. We will not be shy about using legal tools for protecting rights and interests of Chinese enterprises.
Last but not the least, in recent years China and some of its trading partners have addressed a series of major trade frictions properly through friendly consultations in the spirit of win-win cooperation, setting an example for handling steel trade issues. In the same spirit, China is ready to work towards the fundamental goal of win-win development, keep talking with its major trading partners, encourage cooperation between business communities, uphold fair and free global trade and seek effective ways to resolve trade frictions in steel industry.
Market News International: There are many highlights in the foreign trade data in November. Why is that and is MOFCOM confident in the stable growth in foreign trade this year? Thank you.
Shen Danyang: Foreign trade remained complicated and severe this year. We have taken a series of measures to achieve growth and adjust structure and made headway towards stable and robust foreign trade. The eye-catching November data on foreign trade is attributed to first of all the step-by-step implementation of the pro-trade policies and measures since the beginning of this year.
Foreign trade has grown at a stable rate. First, since the beginning of 2016, the growth rate has moved upward on a quarterly basis. Import and export in Q1 and Q2 decreased by 7.2% and 0.2% respectively and grew by 1.1% in Q3, showing a sign of improvement in each quarter. The momentum continued in October and November. Import and export in November increased by 8.9%. In breakdown, export was up by 5.9%, hitting a new record in 2016, and import grew by 13%, which was the biggest monthly growth in three years. Second, since January 2016, the growth rate has been more stable than the same period of last year. From January to November this year, import and export had decreased by 1%, 6.8 percentage points lower than 7.8% in the first 11 months in 2015. Export and import in the same period had dropped by 1.4% and 0.4%, with decrease rates down by 0.8 and 14 percentage points respectively.
The foreign trade structure has been refined. The commodity mix has continued to improve. The share of traditional competitive labor-intensive products has decreased while technology-intensive ones representing new advantages have made up a larger share. In the first ten months of 2016, export of labor-intensive products fell by 4.5% and its share of total export was down by 42.4%, decreasing by 0.9 percentage points. Export of technology-intensive products fell by 1.1% and its share grew by 0.5 percentage points to 31.4%. In breakdown, export of large complete sets of equipment increased by 9% with share up by 0.6 percentage points to 6%. Structures related to trading methods, entities and markets have been further optimized. From January to October 2016, the share of general trade in export had increased by 1.3 percentage points to 55% and export by private enterprises had accounted for 46.4% of the total, up by 1.7 percentage points. The share of export to countries along the Belt and Road had grown by 0.6 percentage points to 27.8%.
Outlook Weekly: Recently, the government of China released its second policy paper on Latin America and the Caribbean. Compared with the first policy paper in 2008, what new features does this second paper have regarding business and trade?
Shen Danyang: Compared with China’s first policy paper on Latin America and the Caribbean in 2008, the new policy paper released recently has four features on business and trade.
First, advance the implementation of new initiatives on China's cooperation with Latin America. In recent years, China has set forth a series of new initiatives on its cooperation with Latin America, such as jointly building the new "1+3+6" cooperation framework and exploring the new "3x3" model for capacity cooperation. The trade and commercial cooperation outlined in the new policy paper are all based on these new cooperation framework and models.
Second, highlight new principles on investment and cooperation. When upholding the principle of business-led and market-oriented cooperation for mutual economic and social benefits, on one hand, business should play a leading role and conduct market-oriented operations; on the other hand, enterprises should fulfill their corporate social responsibilities abroad and abide by local laws and regulations for mutual benefit and win-win results.
Third, introduce new cooperation models. This includes strengthening trade in services and e-commerce cooperation, adopting new financing models and exploring new ways of infrastructure cooperation, such as the Public-Private Partnership (PPP) model. We have outlined the fields and models of manufacturing cooperation in more details. While gradually expanding the scale of assistance, we will focus more on quality improvement and innovating models.
Fourth, match new needs from the development in Latin American and Caribbean countries. This includes aligning high-quality capacity and advantageous equipment of China with the needs of Latin American and Caribbean countries, in order to help the countries in need to enhance their capacity for independent development. China is ready to carry out trilateral development cooperation in Latin American and Caribbean countries with relevant countries outside the region and international organizations under the premise that such cooperation is proposed, agreed upon and dominated by countries in the region.
International Business Daily: Recently, the State Council released a poverty alleviation plan for the 13th Five-Year Plan period (2016-2020), identifying rural e-commerce as an important way of targeted poverty alleviation. What measures have been taken by the Ministry of Commerce and what are their effects? Thank you.
Shen Danyang: Identifying rural e-commerce as an important way of targeted poverty alleviation, or “e-commerce poverty alleviation” in the media, is an information-based poverty alleviation model boosting online entrepreneurship and consumption, with the aim to increase sales of featured products from poor areas with the help of e-commerce. This model is based on the great development of e-commerce in rural areas.
In recent years, the Ministry of Commerce has vigorously promoted rural e-commerce. In particular, after more than two years of development, the comprehensive rural e-commerce demonstration counties designated by the Ministry of Commerce with the Ministry of Finance and other departments have made some initial progress. According to statistics, in the first nine months of this year, rural online retail sales nationwide reached RMB 604.2 billion, including RMB 377.9 billion in physical goods and RMB 226.4 billion in services. The online sales of agricultural products nationwide were RMB 74.6 billion. The growth of rural online retail sales was 2.16 percentage points higher than that of urban areas and its proportion in national online retail sales was increased to 17.43%. Rural areas registered RMB 20.9 billion worth of online sales for agricultural products, accounting for 28% of the total, or 13.6 percentage points higher than the proportion of rural online sales of physical goods in national total.
The progress is more obvious for 256 demonstration counties in China. In the first nine months of this year, their online retail sales reached RMB 141.425 billion, accounting for 23.4% in national rural online retail sales. The average quarter on quarter growth was 9.4%, 3.11 percentage points higher than that of the urban area. The average online retail sales were 88.52% higher than non-demonstration counties; the average online retail sales of state-level impoverished counties under this program were 71.81% higher than other state-level impoverished counties. This also shows that as long as we take appropriate measures and complete all necessary work, rural e-commerce can serve as an effective and important way of targeted poverty alleviation.
The Economic Observer: I have two questions. First, on December 2, US President Obama issued an order prohibiting the acquisition of the U.S. business of German semiconductor company Aixtron SE (“Aixtron”) by Chinese investor Fujian Grand Chip Investment Fund LP (“FGC”). This marks only the second time that a U.S. President has ordered an acquisition by a Chinese enterprise blocked. What is the view of the Ministry of Commerce on the US block of acquisitions by Chinese enterprises due to national security concerns? Second, on December 7, Foxconn issued a statement saying that it is initially evaluating potential investment opportunities in the United States. Donald Trump has also said recently that he hopes Apple will build factories in the United States instead of China or Vietnam. This shows that perhaps Apples is one step closer towards manufacturing its products in the US. What is the view of the Ministry of Commerce on this? Thank you.
Shen Danyang: The first question. The acquisition of the U.S. business of German semiconductor company Aixtron SE by Chinese investor Fujian Grand Chip Investment Fund LP is merely a normal commercial activity conducted by enterprises of two countries under their respective legal framework, following international business practice and market rules. This should not be interfered by political factors. This is another typical case where the US is interfering in normal commercial activities in the name of “national security” against market and commercial rules. We hope that the US will objectively view investment of Chinese enterprises in foreign countries and refrain from such behavior interfering normal business activities.
For the second question, we hold the same principle and attitude. No matter speaking of Chinese enterprises’ investment in the United States, or vice versa, as long as they are normal commercial activities, we should not interfere too much, especially not based on political factors.
Shen Danyang: This concludes today’s press conference. Thank you.
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