Dear friends from the media:
Good morning. Welcome to today's press conference. I will brief you on China’s commercial performance in the first three quarters of 2014, and take the questions of your concern.
I. Performance of Domestic Market
The domestic consumer market has remained steady since the beginning of the year, playing an important role in stabilizing economic growth. The sales of 5,000 major retail enterprises monitored by the Ministry of Commerce in January-September were up 6.3% year on year, and up 6.6% in September, stopping falling and beginning to pick up after three consecutive months and 0.3 percentage points slower than that of the previous month. Following are the main characteristics of the consumer market in January-September.
1. Online retail grew fast. According to the monitoring of the Ministry of Commerce on 5,000 major retail enterprises, the online shopping in January-September witnessed a year-on-year growth of 32.2%, and that of September up 44%, 12.1 percentage points higher than that of August.
2. Small and micro businesses enjoyed a good momentum. Influenced by tax preference and targeted RRR cuts and supported by e-commerce platforms, sales of small and micro commerce and trade enterprises kept a good development. According to the statistics, sales of enterprises under the designated size in January-August was up 14.6%, 4.9 percentage points higher than that of enterprises above the designated size.
3. Consumption of information products and services grew steadily. In January-September, sales of communication equipment in the 5.000 major retail enterprises was up 8.4% year on year, 3.7 percentage points higher than that of the same period of 2013. According to the statistics by the Ministry of Industry and Information Technology, telecommunication services in January-August went up 15% year on year, and 3G and 4G users enjoyed a net increase of 100 million.
4. Consumption for culture and tourism kept heating up. With the consumption upgrading driven by the steady growth of resident income, demands for cultural tourism and health care increased. In the first half year, the growth rate of book sales of dangdang.com was over 40%, and in January-August, the film box office was up 31% year on year. According to the statistics by the China Tourism Academy, domestic tourist income in January-September was up 14.6%, and expenditure for outbound tourism up 17.3%. Sales of healthcare products of 5,000 major retail enterprises were up 14.7%, 6.1 percentage points higher year on year.
5. Sales of household appliances and automobiles slowed down. Influenced by the depressed real estate market, sales of household appliances of the 5,000 major retail enterprises were up 5.9%, 4.5 percentage points slower than that of the same period of 2013. Sales of automobiles also slowed down, while that of new energy automobiles grew rapidly. According to the statistics by the China Association of Automobile Manufactures, sales of passenger vehicles in January-September went up 10.2% year on year, 3.8 percentage points slower than that of the same period of last year. With the introducing of a series of popularization and application policies, sales of new energy automobiles sped up season by season, the sales of the first, the second and the third quarter were up 1.6 times, 2.9 times and 3.8 times respectively, and 2.8 times in January-September in total.
6. Consumer prices remained steady. CPI of January-September was up 2.1%, and that of September was up 1.6% year on year, 0.4 percentage points slower than that of August. According to the Ministry of Commerce, in 36 large and medium-sized cities, prices of agro-foodstuff went up 1.3% year on year in January-September, among that, that of September was down 0.5% year on year. In terms of varieties, prices of milk, eggs and fruit were up 8.9%, 9.7% and 15.5% year on year; and that of pork and vegetables was down 5.6% and 7.6% year on year.
II. Foreign Trade
According to Customs figures, China’s total import and export in September reached 2.4417 trillion yuan, up 11.2% year on year (the same below). Export was 1.3159 trillion yuan, up 15.1%, and import 1.1258 trillion yuan, up 6.9%. Trade surplus was 190.1 billion yuan, up 1.1 times. In terms of the U.S. dollar, the total import and export in September reached US$ 396.432 billion, up 11.3%, among which, export was US$ 213.687 billion, up 15.3%, and import US$ 182.745 billion, up 7%; trade surplus was US$ 30.943 billion , 1.1 times. The main characteristics of foreign trade in September are as follows:
1. Export kept a rapid growth, and trade surplus shortened. In terms of the U.S. dollar in September, national import and export was 7.3 percentage points higher than that of August, the highest since May 2013. Among which, export was 5.9 percentage points higher than that of August, and import was 9.4 percentage points higher, the highest in the last seven months. Since the growth of import was higher than that of export, the trade surplus in September was down to US$ 18.9 billion.
2. Processing trade grew fast, while import of general trade kept depressed. Import and export of processing trade reached US$ 138.3 billion, up 19.7%, 18.7 percentage points higher than that of August, driving the national import and export up 6.4 percentage points. Import and export of general trade reached US$ 203.3 billion, up 5.3%.
3. Surrounding regions contributed a lot to the growth, and import from emerging economies picked up. In September, import and export with Hong Kong, the ROK, ASEAN, Russia and Taiwan was up 31.6%, 22%, 19.5%, 17.3% and 14.6% respectively, accounting for 35.5% of the national total and contributing 63.7% to the growth of import and export. Import and export with the EU and the U.S. was up 12.6% and 11.2% respectively. Import from ASEAN, South Africa and Russia was up 26.2%, 19% and 15.8% respectively, 17.4, 19.5 and 12.7 percentage points higher than that of August.
4. Export of mechanical and electrical products and high-tech products saw a rapid growth, and import prices of large quantity commodities fell. In September, export of mechanical and electrical products realized US$ 113.6 billion, up 8.3%, and export of high-tech products realized US$ 57 billion, up 6.2%, 3 and 7.3 percentage points higher than that of August. Export of textiles, clothing, bags, shoes, toys, furniture and plastic products reached US$ 45.4 billion, up 9% month on month. Over the same period, import prices of certain large quantity commodities continued falling, with iron ore, coal, grain, soybean, and crude oil down 31.2%, 19.4%, 10.6%, 8.1% and 5% respectively, dragging the import growth down by 3 percentage points. Import of mechanical and electrical products and high-tech products registered US$79.5 billion and US$52.9 billion, up 7% and 7.3% respectively.
5.Central and Western China kept a rapid growth while East China rebounded. In September, the import and export of Central China reached US$ 29.5 billion and Western China US$ 31.8 billion, up 21% and 26.6% respectively. The import and export of Central and Western China accounted for 15.5% of the national total, with an increase of 1.6 percentage points, among others, the growth rate of 8 provinces and regions exceeded 30%. The import and export of East China reached US$ 335.1 billion, up 9.5%, 8.3 percentage points higher than that of the previous month, the largest growth rate within 17 months, among others, Guangdong, Hebei and Zhejiang grew by 31.3%, 13% and 10.7% respectively.
III. Foreign Investment in China
In January-September, a total of 17,247 foreign-funded enterprises were approved, up 5.5% year on year. Actually utilized FDI reached US$83.76 billion (equivalent to 538.1 billion yuan), down 1.4% year on year (excluding data of banking, securities and insurance). In September, 2,047 foreign-funded enterprises were approved, up 9.4% year on year; and actually utilized foreign capital was US$9.01 billion (equivalent to 55.58 billion yuan), up 1.9% year on year. The main characteristics of foreign investment in January-September are as follows:
1.Utilized FDI in the service sector maintained fast growth. In January-September, utilized FDI in the service sector registered US$48.63 billion, up 8.7% year on year, accounting for 55.7% of the national total, of which, utilized FDI in the distribution service industry and transportation service industry took a larger percentage and reached US$6.08 billion and US$2.88 billion respectively. Utilized FDI in agriculture, forestry, animal husbandry and fishery amounted to US$1.18 billion, down 2.5% year on year, accounting for 1.4% of the national total. Utilized FDI in manufacturing was US$29.63 billion, down 16.5% year on year, accounting for 33.9% of the national total, of which, utilized FDI in electronic equipment manufacturing including telecommunications equipment and computers, transportation equipment manufacturing, and general equipment manufacturing took a larger percentage and reached US$4.64 billion, US$3.03 billion and US$2.19 billion respectively.
2. Investment from major countries and regions maintained steady growth. In January-September, actual FDI in the Chinese mainland from top 10 investors (Hong Kong, Taiwan, Singapore, the ROK, Japan, the U.S., Germany, the UK, France and the Netherlands) amounted to US$82.19 billion, accounting for 94.1% of the total, up 1.2% year on year. Investment from the ROK and the UK reached US$ 3.23 billion and US$ 1.01 billion respectively, up 32.5% and 32.3%% respectively year on year.
3. Utilized FDI in Central China enjoyed a good momentum. In January-September, utilized FDI in East China was US$73.13 billion, down 1.4% year on year, utilized FDI in Central China was US$8.59 billion, up 9.5% year on year, and utilized FDI in Western China was US$5.63 billion, down 14.6% year on year. Utilized FDI in Central and Western China accounted for 16.2% of the total.
IV. China’s Investment and Economic Cooperation Overseas
Direct investment abroad. In the first three quarters, Chinese investors made direct investment in 4,475 businesses in 152 countries and regions, with a combined investment of US$74.96 billion (equivalent to RMB460.64 billion), up 21.6% year on year. In September alone, the non-financial direct investment reached US$9.79 billion (equivalent to RMB60.17 billion), up 90.5% year on year. By the end of September, China’s non-financial direct investment overseas totaled US$618.4 billion (equivalent to RMB3.8 trillion).
In January-September, the Chinese mainland’s investment in seven major economies, namely Hong Kong, ASEAN, the EU, Australia, the U.S., Russia and Japan, reached US$55.92 billion, taking up 74.6% of the total foreign direct investment during the same period. Investment in Hong Kong was up 19.5% year on year. Investment in the EU, Russia and Japan increased by 218%, 69.7% and 150% respectively. Investment in ASEAN was US$3.56 billion, up 3.2% year on year. Investment in the U.S. reached US$3.95 billion, up28.2% year on year. Investment in Australia totaled US$2.15 billion, up 0.9% year on year.
In the first three quarters, direct investment overseas by local enterprises reached US$30.13 billion, accounting for 40.2% with an increase of 43.2% year on year. The amplification doubled the whole country and Guangdong, Beijing and Shandong were the top three.
Contracted projects overseas. In the first three quarters, the turnover of China’s contracted projects overseas amounted to RMB567.12 billion, equivalent to US$92.29 billion, up 7.4% year on year. The value of new-signed contracts was RMB668.82 billion, equivalent to US$108.84 billion, down 4.2% year on year. The projects each with a contract value of over US$50 million were 416 (25 less than last year’s 441), with a total contract value of US$ 87.4 billion, taking up 80.3% of the total value of newly-signed contracts. The projects each with a contract value of US$100 million or more were 227, 35 less than that in the same period of last year.
In September, the turnover of China’s contracted projects overseas reached US$11.16 billion, up 17% year on year. The value of newly-signed contracts was US$10.82 billion, up 30.5% year on year.
Labor service cooperation overseas. In the first three quarters, labor service personnel dispatched overseas reached 395,000, an increase of 55,000 over the same period of 2013 and up 16.2% year on year. Labor service personnel sent abroad for contracted projects were 189,000, and those for labor cooperation projects were 206,000. In September, all labor service personnel dispatched overseas reached 42,000, an increase of 3,000 over the same period of 2013. By the end of September, all labor service personnel dispatched overseas were 980,000, an increase of 85,000 compared with that at the end of September 2013.
By the end of September, labor service personnel dispatched overseas amounted to 7.31 million.
V. Service Trade
In January-August, China’s service trade maintained a rapid development trend. The total service import and export volume reached US$383.9 billion, with an increase of 12.2% year on year, among which service export totaled US$144.7 billion, up 12.1% year on year and service import reached US$239.2 billion, up 12.2% year on year.
1. The proportion of service trade was on an increasing curve. In January-August, service trade accounted to 12.2% of the total foreign trade, up 1 percentage point compared with the same period last year.
2. High value-added service import and export increased rapidly. In January-August, financial service, film, audio and video, computer and information service, advertising, patent royalty and license fee, consultation service import and export increased by 43%, 31.8%, 24%, 22.6%, 17.9% and 15.5% year on year respectively.
3. The increase in service trade deficit showed a narrowing trend. The deficit of service trade continued to expand, but the amplification of deficit showed a narrowing trend In January-August, the deficit of service trade added up to US$94.5billion, up 12.4% year on year. Service trade deficit mainly focused on tourism, transportation service, patent royalty and license fee and insurance service.
VI. Service Outsourcing
In the first three quarters of 2014, the contracts on service outsourcing totaled 134,319, with the contract value and executed contract value of US$73.39 and 54.52 billion, an increase of 26.3% and 32% respectively year on year. Major characters are listed below.
1. The growth of onshore service outsourcing gained speed. In the first three quarters, the contract value and the executed contract value of offshore service outsourcing totaled US$48.16 billion and US$37.07 billion, with an increase of 18.6% and 27.6% respectively. the contact value and the executed contract value of onshore service outsourcing reached US$25.23 billion and 17.45$ billion, with an increase of 44.4% and 42.6%. The reason why the growth of onshore service outsourcing was speeding up was that the domestic industrial structure was adjusted and upgraded to promote the improvement of professionalization and informatization of service and free a large amount of service outsourcing business.
2. Major markets of service outsourcing were the U.S., the EU, China’s Hong Kong, and Japan. In first three quarters of 2014, the executed contract value in offshore service outsourcing from the U.S., the EU, Hong Kong and Japan was US$8.55 billion, US$5.36 billion, US$5.19 billion and US$3.86 billion respectively, adding up to US$22.96 billion and accounting for 62% among the total execution value.
3. Jobs in service outsourcing increased steadily. In the first three quarters of 2014, newly increased employees in the service outsourcing sector reached 549,000, among which 381,000 with college (including junior college) education or above, accounting for 69.5% of the total employees. As of the end of September, the number of enterprises in the service outsourcing sector totaled 27,163 with 5,910,000 employees, including 3,940,000 with college education or above, accounting for 66.7% of the total.
4. Service outsourcing industry was expanded to high-end business. In the first three quarters, the executed contract value of offshore information technology outsourcing (ITO), knowledge process outsourcing (KPO) and business process outsourcing (BPO) reached US$19.32 billion, US$12.52 billion and US$ 5.23 billion, accounting for 52.1%, 33.8% and 14.1% respectively and with an increase of 22.3%, 35.6% and 30.1% respectively year on year. The delivery abilities and professional service level of enterprises were improved continuously. The service outsourcing industry was expanded to high-end business gradually and the proportion of high value added information technology outsourcing such as biological medicine research and development, technology research and development and industrial design and business process outsourcing which provides commercial solutions was growing.
The above is the information about the situation of economic operation in China in the first three quarters. Now, you are welcome to ask any questions.
CRI: We have noticed that export grew by 15.1% in September this year, a new high for the past 19 months. However, some economists and media raised doubts, that this figure was bloated, and that speculation and capital flows disguised in the form of trade might have reoccurred. What is MOFCOM’s response to such views? Second question, could you briefly inform us of the outcomes of the reforms in the field of commerce since the beginning of this year? And how are the reforms to be carried out going forward? Thank you.
Shen Danyang: From the foreign trade statistics I just briefed you on, the year-on-year growth rate of total import and export in September was 15.3%, which was 5.9 percentage points higher than in the month before. We believe that this rate of growth was normal, and that it had to do with both the payoff of policy measures to stabilize foreign trade growth and the recovery of international market demand, and with a relatively low base value during the same period last year.
Since last May when the General Office of the State Council issued the Document No. 19, enterprises have seen both their order numbers and confidence rise, and export growth accelerate quarter by quarter. According to a survey with some enterprises of MOFCOM’s key contact, 66% of the respondents reported a decrease in the number of product categories that required export inspection, 60% of the respondents reported the lessening of burdens in terms of overall expenses, and 48% of the respondents reckoned a speed-up in customs clearance. Such is a very important factor. The second factor is that since Q3, the world economy has been in a moderate recovery, while growth of international trade has been accelerating. In July, the growth rate of imports from the EU rose from 3.3% to 6.8%. In August, the growth rates of imports from Malaysia and Indonesia went up by 10.3 and 18.4 percentage points respectively. The third factor is that exports in September last year declined by 0.4% year on year, marking the second lowest of export growth of the year. This relatively low base figure is also a major reason for the rapid growth of export in September this year.
These factors combined have led to the rapid growth of China’s exports to most markets in September. Perhaps you have noticed from the statistics I briefed you on just now that exports to Hong Kong grew relatively fast. In fact, not only did exports to Hong Kong grow fast, but also exports to the EU and ASEAN markets, which increased by 14.5% and 14%, up 2 and 1 percentage points from the previous months respectively. Overall, such growth is rather in line with the development trend and logic.
Of course, we have noted that in the exports to Hong Kong in September, some individual products and regions experienced a surge. We will work together with relevant departments to further monitor and analyze this before making any judgement. It will be premature to draw a conclusion without any prior investigation, research or analysis.
Shen Danyang: On the other question you raised, people are rather concerned about the progress of reforms. Since the beginning of this year, the overall progress with reform efforts in the commerce field has been smooth. Some reform tasks have seen initial success, while the effect of the reforms is also coming into focus. Four major reform results merit particular attention: First, innovation measures in the China (Shanghai) Pilot Free Trade Zone have witnessed marked results. Following a year’s pilot operation, the foreign investment management model based on negative listing was established in the pilot zone. Business registration system was established. Pilot for trade facilitation was launched. Efforts were made to further open up the services sector, and the innovation and development of the financial sector. There were also efforts to explore the establishment of an institutional framework featuring interim and ex-post supervision by the government. The implementation of these reform measures has brought good social and economic benefits to the pilot zone. For instance, in the first eight months of the year, the value of import and export of the pilot zone grew by 11% year on year, whereas the number of newly established enterprises rose by 10.9 fold.
Second, there were major reforms on the approval and examination system for outward investment. On 6 September, MOFCOM published revised Administrative Measures on Outward Investment, which set out a management model based mainly on registration and supplemented by approval. Except for some sensitive countries and regions, as well as sensitive industries for which investment approval is still required, all others are subject to registration management to establish the outward investor status of enterprises. The implementation of these Measures, which began on 6 October, has greatly improved trade facilitation, and was very well received by the public.
Third, negotiations on free trade agreements were taken forward actively. On 1 July, the China-Switzerland and China-Iceland Free Trade Agreements came officially into effect. This will have a long-term and positive impact on the bilateral trade and economic relations, and play a positive role in promoting institutional reform at home. Currently China is actively engaged in negotiating free trade agreements with many countries. For instance, just last month, the 13th round of China-Korea FTA and the 21st round of China-Australia FTA negotiations were held, where parties managed to make positive progress in multiple areas, and further narrowed their differences. Also last month, China-Sri Lanka FTA negotiations were formally launched. The two sides agreed to speed up the negotiation process.
Fourth, new results have been achieved in rectifying and regulating market order and in establishing a single domestic market. Since the beginning of this year, MOFCOM has been working together with other related departments in carrying out nationwide reviewing programs on regulations to clear up stipulations that support regional blockade. By the end of the campaign in the end of June, a total of 236,000 pieces of government regulations and normative documents had been reviewed. Among them 476 pieces involved regional blockade and therefore were amended, abolished or nullified. This has effectively promoted the single market in the country. We have also promulgated the Opinion Regarding the Disclosure According to Law Information on Administrative Penalties for the Manufacturing of Counterfeit and Shoddy Goods and Intellectual Property Infringements, and supported many provinces and municipalities in the establishment of information sharing platforms for administrative and criminal enforcement, thus safeguarding the market order based on fair competition.
Going forward, MOFCOM will continue to push ahead reform initiatives in the field of commerce according to the spirit of the important speeches made by President Xi Jinxing at past meetings of the Central Leadership Group on Comprehensively Deepening Reform, and focus its efforts on the following three tasks: First, speeding up the pace of work, and working towards the successfully completion of reform tasks for this year. Second, strengthening supervision on the implementation of the reform measures promulgated so far, ensuring good interim and ex-post supervision, and greater results from the implementation. Third, deepening the research into economic situations both at home and abroad, and carefully planning the reform efforts for the next year.
Thank you for your question.
China Business Network: First, the newly published FDI statistics suggest that in September FDI increased by 1.9% year on year, which was a relatively big increase from July and August, both of which recorded more than 10% decreases. What is your comment about such an unexpected rebound? What are the reasons behind it? At the same time, we have noted that during the National Day holidays, tourism was again very hot, whereas the consumer market was not so hot. How does MOFCOM see such a phenomenon? Thank you.
Shen Danyang: In fact, we talk about FDI every month. China is fully confident about FDI utilization. Many multinationals and firms investing in China are also confident of China’s investment climate. Why so? There are five critical factors: First, China enjoys political, economic and social stability. Second, China’s domestic market, or domestic demand, has huge potential. Third, China has a pool of well-educated talent. Fourth, China’s ever-improving infrastructure is a very important factor in investment environment. Fifth, China’s industrial support capability is growing day by day.
These five factors combined represent some pronounced advantages for China in attracting foreign investment. As for the market factor, China is still the world’s most attractive and fastest growing market. Foreign investors have no reason to withdraw from the Chinese market like what was said by some individual commentators. More important, as the reform measures announced at the 3rd Plenum of the 18th CPC Central Committee continue to be implemented, new institutional dividends and market vitality will be unleashed, which will further shore up the confidence of investors from around the world. Therefore, China’s appeal to foreign investment will further increase. Unless there is major international or domestic volatility, we expect to maintain a steady momentum in attracting FDI this year. The increases over the past couple of months or last month in the amount of foreign investment are all very normal.
Speaking of the past Golden Week, or the National Day holidays, not only was the tourism market very hot, consumer sites across the country were in fact pretty hot too. According to MOFCOM’s monitoring, during the seven days of the National Day Golden Week, sales revenue from the country’s retail and catering businesses reached nearly 1 trillion RMB, up by 12.1% year on year. Take the year-on-year sales figures of enterprises that are on MOFCOM’s priority watch list for example. During the Golden Week, car sales in Shandong almost doubled. Gome's home appliance sales rose by 27% in Chongqing. Smartphone sales in Liaoning increased by 26.4%. Popular catering in Jilin went up by 20%.
People may have the feeling that this year’s consumption during the National Day holidays did not go up as high as it had done in previous years. In fact, I believe that this is because nowadays people no long do as much shopping in department stores as they did in the past during festivals. The real popular way of shopping now takes place online. Besides, there is the consumption of popular services such as tourism, cultural, wedding and health services. These forms of consumption are unlike doing shopping in stores in the old days, which is why we did not see as many people in stores and carrying their purchases home as before.
Since the beginning of this year, the state has promulgated a series of policies to promote consumption, such as the consumption of information, old-age consumption, health consumption, and energy-saving and environmental protection consumption. These policies are paying off. Popular consumption areas such as catering, recreation and entertainment, as well as online consumption, are taking shape. The consumer market continues to maintain a momentum of steady and rapid development. It is forecast that in the coming months this year the consumer market will continue with this momentum of steady and rapid growth, and that total social retail sales is likely to grow at above 12% per annum. Thank you for your questions.
China Consumer Journal: Some while ago MOFCOM jointly published with the NDRC the Administrative Measures for the Catering Business. What do these Measures mean for the catering industry? The Measures clearly forbid minimum consumption fees in restaurants. Could you tell us why you set this provision? Perhaps some restaurants will try to circumvent this stipulation through other forms of charges. Does MOFCOM have any measures to check on the implementation? Thank you.
Shen Danyang: On 22 September this year, MOFCOM and the NDRC jointly published the Administrative Measures for the Catering Business, which is a trial version. We have noted that people are quite interested in Article 12 of the trial Measures, which forbids the setting up of a minimum charge by restaurant owners. I would like to take this opportunity to explain.
For long there has been much controversy over the “Three Fees” issue at restaurants, namely the charging of “corkage fee”, “box fee” and “minimum fee”. Restaurant owners, from their business perspective, believe that charging and setting up these “Three Fees” is reasonable because they provide consumers with their venues, spend money on labor, rent, water and electricity, and provide relevant services. However, consumers, from their own rights’ and interests’ perspective, generally believe that restaurants should not charge or set up such “Three Fees". The current Contract Law, Consumer Rights Protection Law, Anti-unfair Competition Law and Price Law, amongst others, have no explicit prohibitive stipulation on the “Three Fees” issue in the catering industry. According to past court rulings, the court only decides whether the consumer’s right to know is violated as a result of the behaviors of the catering business.
In the drafting process of the trial Measures, MOFCOM and the NDRC solicited opinions from all walks of the society and related departments in a very extensive manner. Our draft was also put online for public comments. We conducted in-depth research on the issues in question. After careful deliberations, we made an explicit prohibitive regulation on the setting up of minimum fees, which was based mainly on the following three considerations: First, setting up minimum fees is of apparently a compulsory nature, and infringes upon consumers’ rights and interests. Second, according to relevant judicial interpretations produced by the Supreme People’s Court last February, setting up minimum fees by catering businesses falls into unfair and unreasonable regulations imposed by restaurant owners using their dominant position to increase the burdens on consumers. Third, setting up minimum fees often leads to excessive consumption, and gives rise to extravagance and waste. Last March, the General Office of the Central Committee of the CPC and the General Office of the State Council jointly issued the Opinions on Practicing Thrift and Resisting Waste of Food, advocating a catering consumption pattern that is scientific and civil, and prohibiting the establishment of minimum consumption by catering businesses. Since the trial Measures were published, those at the receiving end generally believe that explicitly prohibiting the establishment of minimum consumption fees is conducive to bringing order to the catering market, protecting consumer rights, helping guide new consumption patterns that are civil, scientific and healthy, and leading the further transformation and development of the catering industry.
As for how these Measures are going to be implemented, we are still studying with local departments of commerce and other State Council departments such as the NDRC and administrations of commerce and industry the specific ways to implement them. Catering enterprises, consumers and service personnel are the three core parties in catering. The adoption of these Measures has a realistic bearing on regulating the responsibilities, rights and obligations of the three parties. In the event of a dispute, they will have the legal basis for resolution, which sheds a positive light on the sound and sustainable development of the catering industry. The adoption of these Measures will also have some positive impact on the efforts to practice thrift, resist the waste of food, and establish a credibility system in the catering industry. Thank you for your questions.
CCTV 1: Recently there were reports in the press claiming that Chinese enterprises had stepped up their investments in Europe as they took advantage of the opportunities brought about by the economic difficulties facing the European countries. How do you view China’s current outward investment status? Thank you.
Shen Danyang: In recent years as China-EU trade and economic cooperation rapidly develops, China’s investment in the EU has entered into a new phase. Through cooperation in outbound investment, China and the EU have achieved mutual benefits and win-win, and elevated the level and quality of their cooperation. Such cooperation has injected important impetus into the bilateral relations. By the end of 2013, Chinese investors had established nearly 2,000 enterprises in the EU, hiring nearly 50,000 local employees. We sincerely hope to share experience with EU member states in outbound investment cooperation, deepen comprehensive and mutually-beneficial cooperation, and contribute more to the Chinese and European economy, and to the global economy at large.
Speaking of the current state of outbound direct investment, the statistics of the first three quarters, which I just showed you, suggest that China’s outward investment rose by 21.6% year on year. It is fair to say that China’s current state of outward investment is encouraging. You might have noticed that in some months during the first half of this year China’s outward direct investment suffered some fluctuations. That was mainly because Chinese enterprises conducting overseas acquisitions and mergers had encountered some uncertain factors, such as changes in the delivery time of some projects, which led to variations in base values. In fact, China has maintained a good momentum of outward direct investment so far this year. Since July, China’s non-financial direct outward investment has quickly rebounded, and registered a 84.9% year-on-year growth in July alone, and a 112.1% year-on-year growth in August. Such is a very good momentum. China has maintained a sound momentum when it came to its outward direct investment to many countries and regions. For instance, its direct investment in the EU in the first nine months of the year rose more than two times to 9 billion US dollars cumulatively, up by 218% year on year. China’s direct investment in the US rose by 28.2%. Even if this growth rate is not as high as that with the EU, it is already pretty high growth given that investment to the US in previous months was already growing at a very high speed. China’s direct investment in Russia grew by 69.7% in the first nine months. Chinese enterprises were active in cross-border mergers and acquisitions in mining and manufacturing, which was also a highlight in China’s outbound investment.
The statistics I briefed you on suggest that Chinese enterprises are quickening their pace in participating in global economic integration, and that their investment is embraced across the world. Many people are wondering why China’s outbound investment grew so rapidly. The fundamental reasons are twofold: First, strong driving forces in the market. Some of these forces come from the internal factors of the Chinese enterprises and Chinese market that drive companies to “go global”, whereas some come from the host countries at the receiving end of the investment, namely, their market demand. Second, policy support, which is also twofold. There is not only the policy factor of the Chinese government’s effort to actively support enterprises to go global, but also the policy factor of other countries’ endeavor to embrace Chinese investors and investment. Therefore, the overall fundamentals are very good, and we are confident that China’s outward investment cooperation will maintain the momentum of rapid development going forward. Thank you for your questions.
China News Service: The APEC Economic Leaders’ Week will be in next month. How is the progress with the preparations on trade and economic topics? What are China’s expectations of the meeting’s outcomes on the trade and economic front? Thank you.
Shen Danyang: On the 10 and 11 November, the 22nd Economic Leaders’ Meeting of APEC will be held in Beijing. Prior to this meeting, the APEC Ministerial Meeting will be held on 7 and 8 November. The theme of this year’s APEC Economic Leaders’ Meeting is “Shaping the Future through Asia-Pacific Partnership”. Under this theme are three priority topics: advancing regional economic integration; promoting innovative development, economic reform and growth; and strengthening comprehensive connectivity and infrastructure development. Judging from these three topics we can tell that the trade and economic topics are going to be the highlights. Bearing in mind the main thread of regional economic integration, China will focus on advancing Asia-Pacific FTA development, supporting the multilateral trading system and resisting trade protectionism, promoting global value chain and supply chain connectivity and cooperation, and promoting investment liberalization and facilitation.
As we all know, this year marks the 25th anniversary of the APEC, and the 20th anniversary of the Bogor Goals. The APEC meetings this year carry the special mission of inheriting the past and heralding the future, and are of great significance to the future direction of trade and economic cooperation in the Asia-Pacific region. China hopes to work together with other parties to promote meaningful, future-oriented outcomes in the trade and economic field during the APEC China Year in order to benefit the Asia-Pacific region, and make new contribution to building an Asia-Pacific partnership facing the future and to the common prosperity and development of the Asia-Pacific region. Thank you for your questions.
People.cn: International oil price has plummeted during this cycle. There are forecasts saying that the downward adjustment of the domestic petrol price may become a trend, and that it is very likely a “sixth consecutive downward adjustment” of the petrol price may occur. What is your view on this?
Shen Danyang: On petrol price, I suggest you inquire about it with the price management authorities. Sorry.
National Business Daily: We are pretty concerned about the trade friction issue between China and the EU. We have also noted that Premier Li Keqiang is attending the Asia-Europe Meeting (ASEM) Summit now, and Minister Gao Hucheng is accompanying him. It is reported that following the ASEM Summit, Commerce Minister Gao Hucheng will meet with EU Commissioner for Trade Karel De Gucht on 18 October to discuss the China-EU dispute on wireless telecom equipment, and that by then they will adopt a solution. I am wondering if this information is accurate. And if yes, what are the Chinese side’s expectations of the meeting? Thank you.
Shen Danyang: I can confirm it for you that as agreed by the Chinese and the EU sides, Minister Gao Hucheng and EU Trade Commissioner De Gucht will co-host on 18 October the 28th China-EU Trade and Economic Joint Committee at the EU headquarters in Brussels. At this Joint Committee meeting a lot of topics are to be covered, and the wireless telecom dispute will be one of the important topics. Last March, on the eve of President Xi Jinping’s visit to the EU institutions, China and the EU reached agreement on the anti-dumping dispute over wireless telecom equipment, and the European Commission announced the withdrawal of its antidumping investigation into Chinese wireless telecom equipment. Subsequently, the two sides have conducted multiple rounds of consultations and dialogue over the anti-subsidy dispute on wireless telecom. We look forward to the two sides’ reaching agreement at this Joint Committee meeting on this dispute, which will create a favorable environment for the development of Chinese and European wireless telecom product trade and industries. We also hope that the EU side would exercise caution in adopting trade remedy measures, properly resolve trade frictions and differences, work together with China to defend the overall picture of China-EU cooperation, and maintain the sound development of Sino-EU relations. Thank you for your question.
International Business Daily: We are pretty interested in matters relating to China’s assistance to foreign countries. So far this year we have seen that the Chinese government has provided three rounds of assistance to African countries to cope with the Ebola epidemic. What is the result of the assistance so far? What will be the follow-up measures? Thank you.
Shen Danyang: Early this year when the Ebola epidemic broke out in some west African countries, the Chinese government was quick to respond. We provided the countries in the epidemic region three batches of emergency humanitarian aid with a total value of 234 million RMB. Having been dispatched in April, August and September respectively in three batches, the assistance included the provision of disease prevention and treatment materials, food and cash, as well as the dispatching of medical experts to set up a mobile bio-safety laboratory. The assistance was not only the most needed in the countries hit by the epidemic, but also delivered to the disease prevention and treatment sites right away. Over the past few months, we can see on television that the Chinese medical teams and medical experts have stood fast and remained at their posts in the epidemic zones, and risked their lives to help minimize the losses to local population. Their acts reflected the brotherly friendship between the Chinese and African peoples to stand together through thick and thin, and were highly praised by local governments, people and the international community. African countries such as Sierra Leone, Liberia, Guinea, Mali, Benin and Cote d’Ivoire extended thanks to China, whereas the United Nations, the World Health Organization, the African Union, amongst other international organizations, appreciated highly on multiple occasions China’s contributions.
Presently the first two rounds of China’s assistance have been completely implemented, whereas the third round is in the process of implementation. Nearly 200 Chinese medical personnel have so far supported and participated in the prevention and control efforts in the three west African countries. A temporary laboratory and a mobile bio-safety laboratory the Chinese government provided to Sierra Leone were delivered to the sites in different batches. Nine testing personnel have already begun their work in Sierra Leone. Materials provided to the ten countries surrounding the epidemic zone were delivered by air recently. A few days ago, the Chinese government reached an agreement with the UNFAO and entrusted the latter to provide 2 million US dollars worth of food each to Sierra Leone, Liberia and Guinea. The relevant food aid work has commenced. In addition, the Chinese government will also sign a cooperation agreement with the UN and the WHO concerning the matter of providing 2 million US dollars of cash assistance to them.
Presently the Ebola outbreak is a common threat to the entire humankind in the area of non-conventional security. We call on the international community strongly to take actions, to actively provide assistance to the disease-hit countries, and to join hands together with view to overcoming the epidemic at an early date. Depending on the development of the epidemic and the urgent need of relevant countries, the Chinese government will continue to provide assistance to the best of our capacity, and at the same time advance the long-term cooperation between China and Africa in the medical and health sector, and help African countries improve their capacity to prevent, control and tackle epidemics, and to further improve the security of their public health system. Thank you for your question.
DZH News: On the China (Shanghai) Pilot Free Trade Zone, since it began operation a year ago, has there been a full review of it apart from what has been released of the replicable and applicable experience? Furthermore, the State Council has just approved the expansion of the opening-up of Tianjin Port. How is the progress with the application and approval of the Tianjin Free Trade Zone? Thank you.
Shen Danyang: Establishing the China (Shanghai) Pilot Free Trade Zone is an important measure of the Chinese government to promote reform and opening-up under the new circumstances. It is to explore new pathways and accumulate new experience for comprehensively deepening reform and expanding opening-up. Focusing on the priority of institutional innovation, the pilot zone has actively conducted new experiments in areas such as exploring to establish an investment regime based on pre-establishment national treatment and negative list, deepening the reform of the administrative approval system, accelerating the transformation of government functions, promoting the opening up of the services and financial sectors, enhancing trade and investment facilitation, and comprehensively improving the quality of interim and ex-post supervision. Efforts have been made to form a policy support system that promotes trade and investment as well as institutional innovation, and to cultivate an internationalized, rule-based business environment, and unleash new driving forces for social development and economic growth.
As for the issues you raised, it seems that overall the pilot zone has been operating smoothly over the past year. The effects are manifesting themselves, and we have had a good start. Thank you for your questions.
Shen Danyang: That concludes today’s press conference.