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Regular Press Conference of Ministry of Commerce on December 16, 2014

Dear friends from the media, good morning. Welcome to the press conference today. It is December now and this is the last regular press conference this year. I will give you a brief introduction to China’s commercial performance in January-November and answer 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 retail sales of consumer goods in January-November reached 23.7 trillion yuan, up 12% year on year, 1 percentage points slower than that of the same period of last year. The sales of 5,000 major retail enterprises monitored by the Ministry of Commerce were up 6.4% year on year, 2.6 percentage points slower than that of the same period of last year. The retail sales of consumer goods in November reached 2.3 trillion yuan, up 11.7% year on year, picking up after a 5-month drop, 0.2 percentage points higher than that of last month, and up 11.2% with price factors excluded, the highest of the year. Following are the main characteristics of the consumer market in January-November.

1. Consumption for popular service heated up. China has entered into the stage of upgrading from commodity consumption to service consumption, and from basic consumption to developmental consumption. Consumption demands for popular service continued to increase. With the transformation of the catering industry, popular catering has become the main stream. Estimates show that the revenue of catering enterprises under the designated size in January-November increased 13.2%. Demand for cultural tourism was exuberant. The film box office of the whole year was expected to surpass 30 billion yuan, up 38%. The total income of tourism of the whole year was expected to reach 3.3 trillion yuan, up 14.6%.

2. Sales of communication, culture and sports products accelerated. In January-November, the sales of communication equipment, culture and stationeries, sports and entertainment products of 5,000 key retail enterprises were 3.2, 6.2 and 5.9 percentage points higher than that of the same period of last year respectively. According to the National Bureau of Statistics, the retail sales of communication equipment of units above the designated size were up 29.7%. And the growth of the sales of household appliances and furniture of 5,000 key retail enterprises in January-November was 4.2 and 0.7 percentage points slower than that of the same period of last year respectively. According to the statistics of the China Association of Automobile Manufacturers, the sales of passenger vehicles in January-November were up 9.2%, 5.9 percentage points slower than that of the same period of last year.

3. Green and healthy consumption enjoyed a good development. The consumption concept of energy conservation and environment protection has enjoyed a popular support, which bolstered the development of green and healthy consumption. Driven by policies, the sales of new energy automobile sped up, with 53,000 in January-November, and 15,000 in the latest two months. Related statistics showed that, in January-October, the sales of air cleaners and water purifying plants were up 66% and 72.1% respectively year on year, the market share of energy conservation television sets, green refrigerators and inverter air conditioners obviously increased, and the popularity of LED lighting accelerated.

4. Consumer prices were steady but fell down. CPI in the first 11 months was up 2%, 0.6 percentage points slower than that of the same period of last year, and that of November was up 1.4%, 1.6 percentage points slower than that of the same period of last year. According to the Ministry of Commerce, in 36 large and medium-sized cities, prices of agro-foodstuff went up 0.8% year on year in January-November, and that of November went down 1.9%, 7.8 percentage points slower than that of the same period of last year, showing a negative growth for three consecutive months. In terms of varieties, prices of rapeseed oil, mutton and pork were down 3.2%, 3.3% and 8.2% respectively; and that of milk, egg and fruit increased 8.8%, 11.2% and 11.6% respectively.

5. Development of new type businesses and traditional businesses divided. Online retail continued to maintain a high-speed growth. According to the statistics of 5,000 key retail enterprises monitored by the Ministry of Commerce, the online shopping in January-November was up 33.3%. Online retail sales of units above designated size were up 55.9%. Growth of traditional business fell obviously. In January-November, sales of special stores, supermarkets and department stores were up 6%, 5.5% and 4.2% respectively, 1.4, 2.8 and 6.4 percentage points slower than that of the same period of last year respectively.

II. Foreign Trade

According to Customs figures, China’s total import and export in November reached 2.2681 trillion yuan, down 0.3%. Export was 1.3014 trillion yuan, up 4.9%, and import 966.6 billion yuan, down 6.5%. Trade surplus was 334.8 billion yuan, up 60.5%. In terms of the U.S. dollar, the total import and export reached US$ 368.85 billion, down 0.5% year on year (the same below), among which, export was US$ 211.66 billion, up 4.7%, and import US$ 157.19 billion, down 6.7%. Trade surplus was US$ 54.47billion , up 61.4%.

1. Export maintained a steady growth. In November, the export of mechanical and electrical products reached US$ 122.7 billion, and that of high-tech products reached US$ 65.5 billion, up 3.9% and 2.5% year on year, among which export of mobile phones and color TV sets was up 12.8% and 7.8% respectively. Products that enjoyed a large growth included: mineral fertilizers and chemical fertilizers with an export of US$ 1.23 billion, up 91.2% year on year; precious metal or jewelry with precious metal with an export of US$ 4.68 billion, up 77.4% year on year; steel with an export of US$ 6.65 billion, up 55.8% year on year; and toys with an export of US$ 1.18 billion, up 20.2% year on year.

2.Export to part of emerging markets enjoyed a rapid growth. In November, export to India, ASEAN and South Africa was up 24.5%, 14.3% and 7% respectively, accounting for 15.2% of the national total export, and contributing 45.2% to the export. Both Import and Export with U.S. and Hong Kong were up 2.2%, and that with the EU remained the same as last year, with the growth 4.4, 20.4 and 6.1 percentage points slower than that of last month respectively. Import and export with Japan went down 6.7%, showing a negative growth for four consecutive months.

3. The central region maintained a rapid growth. In November, import and export of the central region reached US$ 31.9 billion, up 15%, maintaining a double digit rate for four consecutive months. Import and export of the eastern region reached US$ 308.8 billion, down 1.9%. Import and export of the western region reached US$ 28.1 billion, down 1.6%, the lowest since June, 2013.

4. Processing trade enjoyed a slight growth and other kinds of trade fell down. In November, import and export of processing trade reached US$ 130.4 billion, up 2.5%. Import and export of other kinds of trade reached US$ 46.3 billion, down 7.5%, 15.9 percentage points slower than that of last month. Import and export of general trade reached US$ 192.1 billion, down 0.6%.

III. Foreign Investment in China

In January-November, a total of 21,296 foreign-funded enterprises were approved, up 4.2% year on year. In terms of the U.S. dollar, actually utilized FDI in the first 11 months reached US$106.24 billion (equivalent to 654.5 billion yuan), up 0.7% year on year (excluding data of banking, securities and insurance). In November, 2,057 foreign-funded enterprises were approved, down 8.6% year on year, with actually utilized investment of US$ 10.36 billion (equivalent to US$63.78 billion yuan), up 22.2% year on year. The main characteristics of foreign investment in January-November are as follows:

1.Investment in the service sector maintained growth. In January-November, utilized FDI in the service sector amounted to US$ 58.55 billion, up 7.9% year on year, accounting for 55.1% of the national total, of which, utilized FDI in the distribution service industry and transportation service industry took a larger percentage with US$7.02 billion and US$ 3.63 billion respectively. Utilized FDI in agriculture, forestry, animal husbandry, and fishery reached US$ 1.48 billion, down 5.5% year on year, accounting for 1.4% of the national total. Utilized FDI in manufacturing totaled US$ 35.93 billion, down 13.3% year on year, taking up 33.8% of the national total, of which, utilized FDI in electronic equipment manufacturing like telecommunications equipment and computers, transportation equipment manufacturing, and chemical raw materials and chemical products manufacturing took a larger percentage and reached US$ 5.42 billion, US$ 3.62 billion and US$ 2.72 billion respectively.

2.Investment from major countries and regions maintained steady growth. In January-November, the actual FDI in the Chinese mainland from the top 10 investors (Hong Kong, Singapore, Taiwan, Japan, the ROK, the U.S., Germany, the UK, France and the Netherlands) amounted to US$ 100.01 billion, accounting for 94.1% of the total, up 1.9% year on year. Among others, the investment from the ROK and the UK was US$ 3.59 billion and US$ 1.25 billion respectively, up 22.9% and 28% year on year respectively. Investment from Japan reached US$ 4.08 billion, down 39.7% year on year. Investment from the U.S. reached US$ 2.46 billion, down 22.2% year on year. In addition, investment from 28 EU countries and ASEAN countries reached US$ 6.17 billion and US$ 5.87 billion, down 9.8% and 23.6% year on year respectively.

3.Utilized FDI in central China enjoyed a rapid growth. In January-November, utilized FDI in eastern China reached US$ 88.53 billion, up 0.4% year on year. Utilized FDI in central China was US$ 10.16 billion, up 10.4% year on year. Utilized FDI in western China was US$ 7.56 billion, down 7.2% year on year.

IV. China’s Investment and Economic Cooperation Overseas
Direct investment overseas. In January-November, Chinese investors made a direct investment in 5,402 enterprises overseas in 153 countries and regions around the world, with a combined investment of US$ 89.8 billion (equivalent to 551.82 billion yuan), up 11.9% year on year. In November, non-financial direct investment overseas amounted to US$ 7.92 billion (equivalent to 48.67 billion yuan), down 26.1% year on year. As of the end of November, China’s total non-financial direct investment overseas amounted to 3.98 trillion yuan (equivalent to US$ 633.2 billion).

In January-November, the Chinese mainland’s investment in seven major economies, namely, Hong Kong, ASEAN, the EU, Australia, the U.S., Russia and Japan, reached US$ 67.16 billion, accounting for 74.8% of China’s total FDI overseas over the same period. Investment in Hong Kong was up 13.3% year on year, and investment in the EU and Japan was up 195% and 80% respectively. Investment in the U.S. reached US$ 4.64 billion, going up 27.1% year on year. Investment in Australia and ASEAN decreased 29.8% and 3.8% respectively. Influenced by major projects of last year, China’s investment in Russia decreased 76.7% year on year.

In January-November, the direct investment overseas by local enterprises reached US$ 37.11 billion, up 33.6% year on year, accounting for 41.3% of the total, with an increase of 6.7 percentage points. Guangdong province, Beijing and Shandong province ranked the top three among the list.

Contracted projects overseas. In January-November, the turnover of China’s contracted projects overseas amounted to US$ 121.3 billion (equivalent to 745.39 billion yuan), up 10.6% year on year. The value of newly-signed contracts was US$ 160.98 billion (equivalent to 989.22 billion yuan), up 12.5% year on year. The projects each with a contract value of over US$ 50 million were 550 ( 12 more than last year’s 538), with a combined value of US$ 132.67 billion, taking up 82.4% of the total value of newly-signed contracts. Projects each with a contract value of US$ 100 million or more were 302, eight less than that of last year.

As of the end of November, the total contract value of China’s contracted projects overseas amounted to US$ 1.33 trillion, with a turnover of US$ 914.06 billion.

Labor service cooperation overseas. In January-November, labor service personnel dispatched overseas reached 498,000, an increase of 63,000 over the same period of last year, up 14.5% year on year. Labor service personnel sent overseas for contracted projects were 241,000 and those for labor service cooperation were 257,000. In November, labor service personnel dispatched overseas were 50,000, an increase of 3,000 over the same period of last year. By the end of November, all labor service personnel sent abroad were 1,005,000, an increase of 90,000 compared with that of the end of November 2013.

By the end of November, the labor service personnel dispatched overseas amounted to 7,420,000.

V. Service Outsourcing

In January-November, the number of contracts on service outsourcing totaled 168,700, with the contract value and executed contract value being US$ 91.84 billion and US$ 68.95 billion respectively, going up 10.5% and 29.2% year on year respectively. Major characteristics are listed below.

Onshore service outsourcing increased rapidly. In January-November, the contract value and executed value of offshore service outsourcing totaled US$60.84 billion and US$46.6 billion, an increase of 13.9% and 24.3% year on year, respectively. The contract value and executed value of onshore service outsourcing reached US$31 billion and US$22.9 billion, with an increase of 4.4% and 40.8%.

The U.S., the EU, Hong Kong and Japan were major markets of service outsourcing. In January-November, the executed contract value in offshore service outsourcing from the U.S., the EU, Hong Kong and Japan was US$10.9 billion, US$6.69 billion, US$6.39 billion and US$5.01 billion, respectively, adding up to US$28.99 billion and accounting for 62.1% of the total execution value.

The cooperation in service outsourcing with the countries of the Belt and Road Initiatives was deepened. In January-November, the contract value and the executed contract value of service outsourcing from those countries reached US$10.61 billion and US$8.05 billion, respectively, with an increase of 22.3% and 31.5% year on year, respectively. The executed contract value of service outsourcing from 11 countries in Southeast Asia totaled US$4.32 billion, with an increase of 50% year on year. The trade and economic cooperation with the countries of the Belt and Road Initiatives can be deepened by actively carrying out service outsourcing and promoting service export.

Jobs in service outsourcing increased steadily. In January-November, newly increased employees in the service outsourcing sector reached 629,000, among which 435,000 with college (including junior college) education or above, accounting for 69.1% of the total employees. As of the end of October, the number of enterprises in the service outsourcing sector totaled 27,686 with 5,991,000 employees, including 3,994,000 with college (including junior college) education or above, accounting for 66.7% of the total.

The service outsourcing industry was expanded to high-end business. In January-November, the executed contract value of offshore information technology outsourcing (ITO), knowledge process outsourcing (KPO) and business process outsourcing (BPO) reached US$24.68 billion, US$15.44 billion and US$6.53 billion, accounting for 52.9%, 33.1% and 14.0%, respectively, and with an increase of 22%, 28.4% and 23.6% 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.

VI. Trade and Economic Cooperation between Macao and Mainland since Macao's returning 15 Years Ago

With strong support of the central government, Macao has made remarkable progress in economic and social development since its returning 15 year ago. Firstly, trade and economic relations between the two sides have become closer and closer. Before 1999, trade volume between the two sides was US$730 million, the mainland's actual use of Macao’s capital was US$310 million and the completed turnover of the mainland’s contract work in Macao was US$118 million. In 2013, trade volume between the mainland and Macao reached US$3.57 billion, increasing 3.9 times compared with that before 1999. The mainland's actual use of Macao’s capital amounted to US$460 million, an increase of 48.4%, and the completed turnover of the mainland’s contract work in Macao totaled US$118 million, increasing 2.6 times. Secondly, the implementation of the Closer Economic Partnership Arrangement between the mainland and Macao has made remarkable progress and strongly supported the prosperous development of Macao.

In the field of trade in goods, the mainland has fully implemented zero tariffs on goods originating in Macao. By the end of October 2014, “zero tariffs” goods imported from Macao by the mainland has accumulated to US$80.696 million, with the tariff preference of 43.326 million yuan. In the field of service trade, the mainland has taken 383 measures in opening to Macao. By the end of October, almost 440 enterprises of Macao have used the preferential measures of the Closer Economic Partnership Arrangement to invest in the mainland and 1,018 individual businesses of Macao have registered in the mainland. Thirdly, Macao has played an increasingly important role as a service platform for Sino-Portuguese trade and economic cooperation. In 2002, trade volume between China and Portuguese-speaking countries was only US$5.6 billion. Since the establishment of the Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries in Macao in 2003, trade and economic cooperation between China and Portuguese-speaking countries has entered the most active and fruitful period in history, with bilateral trade reaching US$11 billion in 2003.

In 2013, trade between China and Portuguese-speaking countries reached US$131.91 billion, increasing by 12 times compared with the early days of the forum in 2003. The annual growth of trade over the past 10 years was 31.8%, greatly higher than that the world. China has become the biggest trading nation and biggest exporter of Portuguese-speaking countries. Mutual investment between China and Portuguese-speaking countries has constantly obtained growth, with trade and economic cooperation ever increasing. Since the establishment of the Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries in 2003, China’s accumulative non-financial investment in Portuguese-speaking countries had increased from tens of millions of dollars to US$2.465 billion by the end of 2013 and the actual investment of Portuguese-speaking countries in China had totaled US$747 million.

Next, the Ministry of Commerce will carefully implement the working deployment of the Party Central Committee and the State Council, make solid progress in basically realizing the liberalization of service trade in Macao and support Macao in building the information sharing platform for Sino-Portuguese bilingual talents and businesses, the Sino-Portuguese small and medium-sized enterprises’ business service center, the Sino-Portuguese trade and economic cooperation convention center and the food distribution center of Portuguese-speaking countries.

That’s all about the briefing. Now, you are welcome to ask any questions.

CCTV: The China-US Joint Commission on Trade and Commerce is about to be held. What will the two sides mainly discuss this time? What is the Chinese side’s expectations of this meeting? Besides, William Reinsch, Vice Chairman of the United States-China Economic and Security Review Commission, said recently that China once again undervalues the Renminbi in order to gain an export advantage, leading to a possibly record high trade deficit for the US vis-à-vis China. What is China’s response to this? Will the JCCT cover the above-mentioned topic? Thank you.

Shen Danyang: As agreed by China and the US, the 25th JCCT will be held on US time 16-18 December in Chicago, US. Vice Premier Wang Yang will co-chair the JCCT with US Commerce Secretary Pritzker and US Trade Representative Ambassador Froman. During the JCCT, the two sides will organize a number of cooperative events including seminars and forums with rich content and broad coverage. This JCCT is the concluding event for China-US relations this year. The Chinese and American teams have made a large amount of preparatory work for the successful organization of the JCCT. The two sides will conduct an in-depth exchange of views on major trade and economic topics of their respective concern and explore the pathways for expanding mutually-beneficial cooperation. The Chinese side hopes that the US could adopt concrete measures and make positive progress on relaxing the US export control policy towards China, giving Chinese investors equal treatment in the US, China’s market economy status, inspection and quarantine of agricultural produce, visas for Chinese personnel traveling to the US, China-US bilateral airworthiness extension for cargo aircraft and other trade- and investment-related issues. The Chinese side will work together with the US side to implement the consensus reached by our presidents last November in Beijing with a view to contributing to the building of the new model for major-country relations and the opening of a new chapter in China-US trade and economic relations.

As for the remarks of some US individual you mentioned, I believe his views are very much unfounded. As we all know, China has been accelerating the reform on the formation mechanism of the Renminbi over the past years, and last March widened the band of floatation for the exchange rate. Two-way fluctuation has become normal whereas the role of the market as a basic factor in the formation of the exchange rate is strengthening. Since the beginning of this year, the Renminbi has appreciated by 10.1% against the Euro, 10.8% against the Japanese Yen and 4.2% against the pound sterling amongst other major currencies. In the first ten months of the year, the real effective exchange rate of the Renminbi has risen by 2.37% on a cumulative basis. Since June, the US dollar has embarked on a rising cycle, with the dollar index rising more than 10% cumulatively. Yet even so, the Renminbi has still risen by 0.9% in value against the US dollar.

On China-US trade surplus and the exchange rate issue of the Renminbi, we have been saying for I don’t know how many times that the Chinese side has neither the intention nor the need to manipulate the exchange rate in order to gain an export advantage or pursue a trade surplus. In fact, as many well-informed Americans have realized, the exchange rate is not at all a main factor that affects or determines the trade imbalance between China and the US. The trade surplus held by China vis-à-vis the US is an objective reflection of the structural difference of the two economies and their different positions in international specialization in the context of economic globalization. It is determined by economic and investment relations amongst many different countries, and is interwoven with factors such as the US export control policy toward China.

According to the statistics I have just given you, US trade deficit with China has widened since the beginning of this year, and so have its trade deficits with many other countries and regions. Many experts believe that this was because of short-term factors such as the strong dollar, and that the economic recovery in the US has led to a rise in domestic demand while weak economic performance in other markets has resulted in a decrease in import demand, and of long-term factors such as the structural imbalance of the US economy and the different roles of different countries in the global value chain.

Over the past decade, China has always been actively expanding imports from the US. China is the fastest growing export market for the US. On the issue of trade imbalance, there is no point in playing the blame game. What is important is to do more to promote balanced trade between China and the US. The US side should pragmatically promote balanced trade. For instance, the US export control policy has restricted the export to China of the products where the US enjoys the most international competitive advantage, resulting in the ever-diminishing share of US high-tech products in China’s total import of such products from around the world. Statistics have shown that the US share has dropped from 18.3% in 2001 to 8.6% in 2013. This is evidently not in the favor of leveraging US industry’s comparative advantage and balancing China-US trade. Therefore, can the US side take some real actions to reduce its control over high-tech exports to China? Further, can the US side learn from the Chinese side to encourage more US companies to do trade promotion in China? I think these are the things the US side should consider doing. Thank you for your questions.

CBN: I would like to ask you a question about the free trade zone. The China (Shanghai) Pilot Free Trade Zone has been up and running for over a year. What are its achievements and progress? What are the specific strategies of the State Council as it strives to deepen reform and expand opening up through free trade zones? In another word, could you tell us about the general plans for the second group of free trade zones? Thank you.

Shen Danyang: Since the inauguration of the China (Shanghai) Pilot Free Zone over a year ago, all the set reform measures have been carried out. An investment administration system mainly based on the negative list approach has been basically established; a trade regulatory system focusing on trade facilitation is running effectively; a financial innovation system targeting capital account convertibility and financial services liberalization is advancing orderly; and an interim and ex-post supervision system revolving around the transformation of government functions is taking form. Through bold experiments, the reform payoffs of streamlining administration and delegating power are manifesting themselves, greatly stimulating market activity and improving government efficiency. Administration models suitable for the new, more open situation have been explored, while a number of replicable and applicable reform innovation outcomes have been created, thus exploring new pathways and accumulating new experience for the deepening of reform and expansion of opening up across the country.

Recently, the Executive Meeting of the State Council and the CPC Leading Group on Comprehensively Deepening Reform successively reviewed the Opinion on the Work Progress and the Rollout of Replicable Reform Pilot Experience of the China (Shanghai) Pilot Free Trade Zone. The CPC Central Committee and the State Council demanded the early roll-out of replicable and applicable experience gained from the China (Shanghai) Pilot Free Trade Zone in regions if they can be rolled out within that region and across the country if they can be rolled out nationwide. Apart from items that require the amendment of laws, there are all together 28 pieces of experience from the reform pilot that can be rolled out nationwide, involving areas such as investment, trade, finance, service liberalization and interim and ex-post supervision. In other customs special supervision zones, six measures of institutional innovation concerning customs supervision, inspection and quarantine will be rolled out.

On 12 December, the State Council held an executive meeting to deploy the relevant work on rolling out the experience from the China (Shanghai) Pilot Free Trade Zone and promoting higher level opening to the outside world. In order to create a high land for reform and opening up, form new functions of reform and opening up, promote a new round of high-level opening up and conduct experiment to supplement and compare with the China (Shanghai) Pilot Free Trade Zone, it was determined at the meeting that three new pilot free trade zones be established in Guangdong, Tianjin and Fujian respectively, on the basis of existing new areas and zones. These three provinces and municipality are formulating pilot programs for the pilot zones, which will be based mainly on the pilot measures of the China (Shanghai) Pilot Free Trade Zone, and include new measures that are of the regional features and industrial foundation of the respective localities. MOFCOM will do all it can to advance this work. Thank you for your question.

Asahi Shinbun: I have two questions: First, given the rather sharp fall of the value of the Japanese Yen in the foreign exchange market, what is you view on its impact on China-Japan investment? Second, could you brief us on the progress of China-US Bilateral Investment Treaty? Thank you.

Shen Danyang: Your last question first. On China-US BIT negotiations. The 17th round of the BIT negotiations is being held in Beijing. The negotiation teams of the two sides will strive to substantially conclude the negotiation on text in this round so as to pave the way for launching the negotiations on the negative list next year. This will be the implementation of the negotiation timeline set forth during the 6th China-US Strategic and Economic Dialogues.

On the recent depreciation of the Yen, I mentioned it when I talked about exchange rate situations. Based on the statistics we have gathered so far, the Japanese Yen has depreciated against the Chinese Renminbi by 10.7% since the beginning of this year. It is the currency that has depreciated the most amongst all major currencies. The depreciation of Yen has had some impact on trade and investment with relevant countries. We can tell from the statistics I gave you that China’s trade with Japan has fallen by a big margin, especially when it came to Chinese exports to Japan. This was related to the sharp fall in the value of the Yen. Thank you for your questions.

China News Service: China and the US reached agreement on the resumption of the ITA expansion a while ago. Recently there have been reports by foreign media that some difference between China and Korea in certain areas may arise to derail the resumption. What is the Chinese side’s comment about this? Thank you.

Shen Danyang: The Chinese side attaches great importance to ITA, i.e. the expansion talks of the Information Technology Agreement, and has made enormous efforts and major contribution to resuming and advancing the negotiation process. During the APEC meetings, China and the US achieved a breakthrough in the expansion negotiations by reaching important consensus, which was applauded by APEC member economies and other negotiating parties. After the substantial consensus was reached between China and the US, the existing negotiation outcomes are substantial. If all parties could reach an agreement based on existing consensus, the agreement could cover trillions of dollars of global trade, which will be of huge commercial significance, and be conducive to promoting the growth of global information technology industry and global economy.

China hopes that all parties could cherish this hard-won result and reach agreement as soon as possible, so as to enable the industry to reap the benefits of trade liberalization as early as possible. The Chinese side calls on all parties to work together, strengthen cooperation and jointly strive for an early conclusion of the expansion talks. Thank you for your question.

China Business: Hello Director General Shen. Just now in your press release you mentioned China’s total retail sales of social consumer goods in the first eleven months of the year. The figure for November was particular eye-catching in that total retail sales in that month grew faster than previously. Could you please analyze the main reasons and features of such a phenomenon?

Shen Danyang: The total retail sales of social consumer goods in November reached 2.3 trillion RMB, up by 11.7% year on year. The growth rate, which was 0.2 percentage points above the level of the previous month, has picked up following five consecutive months of marginal decline. In constant price, the real growth rate was as high as 11.2%, marking a year high. Out analysis suggests that this was mainly attributed to the targeted control of by state and the further stabilization of the economy, which has led to the gradual stabilization of the growth in domestic consumer market.

To be specific, there are three highlights in the domestic consumer market in November: First, online retail has maintained a high growth rate. We all know the online shopping spree of the “Double 11 (November 11th)”, thanks to which online shopping grew rapidly. MOFCOM’s monitoring of the 5,000 key retail businesses also indicates that online retail sales has risen by 41.1%. Second, there is a rise in cultural, sports and health consumption. Due to consumption upgrading and demographic changes, sales of cultural and sports products have enjoyed a good momentum. According to MOFCOM surveillance figures, sales of cultural and office goods, and sports and recreational products rose by 5.1% and 8.8% respectively in November. Third, rise in price of consumer goods has slowed down and stabilized. In November the overall level of consumer price rose by 1.4%, which was 1.6 percentage points lower than that of the same month last year. Price of edible agricultural products in 36 medium- to large-sized cities as monitored by MOFCOM has declined by 1.9%, making November the third consecutive month of negative growth. Thank you for your question.

Caixin: Last week, the State Council newly approved three Free Trade Zones (FTZs). Is there a clearly defined geographic scope for the locations of the FTZs? Does each have its own distinctive features? How is the work progressing? Thank you. (2014-12-16 11:35:51)

Shen Danyang: This topic was touched upon in the last question. I just shared whatever information I can with you on the details that might be of interest to you. I cannot answer this question at the moment. Thank you. (2014-12-16 11:36:06)

People.cn: A group of figures have just revealed that services outsourcing business is on the rise for all ‘One Belt One Road’ countries. It is reported today that on the 15th, Premier Li Keqiang and the Prime Minister of Kazakhstan struck a deal worth USD 18 billion at a breakfast meeting. What is your projection of China’s commercial cooperation with ‘One Belt One Road’ countries next year? Thank you. (2014-12-16 11:44:38)

Shen Danyang: As is known to all, ‘One Belt One Road’ is a major strategic move on China’s part. As a State Council department responsible for domestic and foreign trade and international economic cooperation, MOFCOM has been actively strengthening domestic and international coordination and tapping into the underpinning and leading role of commercial cooperation while expanding trade ties with ‘One Belt One Road’ countries to promote regional economic integration and common prosperity. MOFCOM is committing and will make efforts to develop ‘One Belt One Road’ in the following five areas. First, in line with the master deployment of the central government, we are stepping up the formulation of a timetable and a roadmap for ‘One Belt One Road’ on the commercial front and drawing upon existing cooperation mechanisms for external coordination. Second, we will upgrade connectivity in transport, energy and communication via all kinds of commercial cooperation to construct an infrastructure network covering all relevant countries. Third, we will guide businesses to augment their investment in ‘One Belt One Road’ countries and build a batch of industrial parks and industrial chains and economic belts based on division of labor and common benefit. Fourth, we will further boost trade and investment facilitation with ‘One Belt One Road’ countries for closer cooperation, easier exchanges and better integrated interest between China and relevant countries. Last but not least, we will make good use of the Asian Infrastructure Investment Bank and the Silk Road Fund to launch a bevy of major cooperation projects for early harvest as soon as possible. Thank you for your question. (2014-12-16 11:45:08)

International Business Daily: Recently, the power generator of the desalination plant in the Maldives caught fire, jeopardizing the water supply for 150,000 locals and tourists. The Chinese government provided emergency relief. Could you share with us more information? Thank you. (2014-12-16 11:45:41)

Shen Danyang: On the evening of Dec. 4th, the power generator in the only desalination plant of Male, capital of the Maldives, broke down due to fire. The disruption jeopardized the water supply for 150,000 Male residents and foreign tourists. The Maldivian government requested foreign governments to provide drinking water in its appeal to the international community for emergency relief. The Chinese government responded immediately. MOFCOM worked with the Ministry of Foreign Affairs and the Ministry of Defense in the relief operation.
So far, relief has been provided in three ways. First, 30 tons of bottled drinking water was flown immediately to the Maldives by commercial flights; second, the military has sent two military aircraft on a mission to carry 40 tons of bottled drinking water to the Maldives; and third, an emergency relief fund worth USD 500,000 has been offered to the Maldives for drinking water procurement and emergency responses. Currently, at the request of the Maldives, China is exploring the feasibility of providing desalination equipment and spare parts for the Maldives drawing on the relief fund.

As of Dec. 8th, work on the three fronts had progressed well. The drinking water transported by commercial airlines and military aircraft had both reached Male as an effective emergency relief. Maldivian President Yameen said on Dec. 9th that the Chinese government responded immediately after the water supply cut in Male by mobilizing resources and transporting quantities of fresh water to the Maldives on top of financial relief. He also expresses appreciation on behalf of the Maldivian government and people for China’s great help and deep friendship. Moving forward, MOFCOM will continue to work closely with relevant departments in providing necessary relief for the Maldives. Thank you for your question. (2014-12-16 11:46:03)

MASTV: I have two questions concerning Macao’s development. Recently, Macao’s lottery industry suffered a big slide. What is your take on this? What is your outlook on Macao’s economy? The Guangdong-Hong Kong-Macao Free Trade Zone was approved lately, which covers Hengqin, Zhuhai. Since Macao is very close to Hengqin, how do you think Macao can seize the development opportunity? Thank you. (2014-12-16 11:47:24)

Shen Danyang: Judging from the figures I just shared with you, the commercial relationship between the Mainland and Macao has come a long way in the past 15 years with enormous changes. The strengthened commercial cooperation between the Mainland and Macao has played a big role in the prosperity and stability of the latter in the past 15 years and will continue to do so in the future.

As for Macao’s economy, I believe, first and foremost, the Mainland and Macao should continue to step up commercial cooperation and forge a closer cooperative relationship to promote healthy and rapid economic and social development in Macao. Second, Macao’s economy and trade will move along the set track towards economic diversification. Lottery is a pillar industry for Macao’s economy. That said, over the years, Macao has made remarkable progress in the fair and tourism industry with sound headway in other commercial services. Therefore, Macao should stick to the path of economic diversification. Regarding the outlook, of course we remain bullish on Macao and believe that it will do even better than it did in the past 15 years. Thank you for your question. (2014-12-16 11:47:59)

Global Times: I have a question on China’s aid to foreign countries. According to a recent report by a group on aid statistics under a research institute in the US, most of China’s aid funding goes to the hometowns of the African heads of state or government. How do you comment on that?

Shen Danyang: The overarching goal of China’s foreign assistance to help recipient countries reduce poverty, improve livelihood, advance economic and social development and progress and enhance capacity for independent development. This is the goal we have stayed committed to for six decades and it is highly commended by both governments and people in the vast number of developing countries. So the claim made by some western institute you mentioned, is made out of thin air, if not purposefully ill-intended. I’d like to avail myself of the opportunity to make three points to give you a better understanding of China’s aid to foreign countries.

First, the focus of China’s assistance to foreign countries is on improving livelihood. The primary goal is to help other developing countries alleviate poverty and improve livelihood. From 2010 to 2012, 80% of China’s aid money went to poverty reduction, education, health, sports, culture and transport, all of which are closely related to the wellbeing of the people, as well as infrastructure projects. These efforts have been widely praised by governments and people of the recipient countries.

Second, China ensures scientific management of its assistance to foreign countries. In light of the development strategy and priority areas of the recipient country, China develops, together with the recipient partner, a country-specific 3-5 year aid plan. Based on the plan, the recipient country proposes specific projects while China sends expert teams to conduct feasibility study on the proposed projects. If the study leads to positive conclusions, the project will be put on the reserve list. The two sides work out a list of projects in order of priority and implement them one by one. The procedures on project selection and management are scientific and strict.

Third, China follows the principle of openness and transparency in providing foreign assistance. Relevant data is released on the websites of the Ministry of Commerce and the Ministry of Finance every year. The implementation of all projects is open to the public and the progress of each project is updated on the website of China’s Economic and Commercial Councilor’s Office in recipient countries, to which the government, public and media of the recipient country bear full witness. Moreover, the Information Office of the State Council has released two white papers on China’s aid to foreign countries for the year 2011 and 2014, which give a comprehensive and systematic overview of China’s policy, funding, ways, distribution, management and international cooperation on foreign assistance since the founding of the New China. The two white papers have been applauded by the international community. Thank you for your question.

China National Radio: I have two questions. First, according to the figures released today, China’s outward investment for the first 11 months totaled USD 89.8 billion and inward FDI USD 106.2 billion. Does the gap of over USD 10 billion between the two suggest that China’s outbound FDI will not exceed its inward FDI this year? Can you make a forecast on that? Second, last week a delegation consisting of representatives from the government and several private organizations of South Korea came to visit the Silk Market in Beijing, and following the trip, warned Korean companies to take extra caution against IPR infringement if they want to enter the China market after the establishment of the China-Korea FTA. What’s your take on that? Thank you.

Shen Danyang: A lot of people are following with interest whether China’s outward FDI will surpass its inward FDI this year and I’ve seen forecasts and comments from some experts. In fact, it does not matter much to us if this indeed takes place this year and it is not our set goal to invest more overseas than we receive or become an exporter of capital. The figures for the last month of the year are still pending. And we have seen major fluctuations in recent months. For instance, there was a significant decline in the number of outward investment and relatively fast growth for inward investment in November. It is therefore too early to tell the results for December and the whole year. Analysis shows that the figures for inward and outward investment will be pretty close for the whole year and there are chances that outward FDI may exceed inward. But this is not for sure. Besides, we will recalculate the yearly figures in the first half of next year and some data are subject to further adjustment and revision. So we do not yet have a clear conclusion on your question.

On your second question. I also learned about what you said from the media. We were not notified of the said on-site visit by South Korea from any formal channel. The Chinese government is committed to the protection of IPR. The State Council adopted the Outline of the National IPR Strategy in 2008, and rolls out an Advancement Program for Implementing the National IPR Strategy every year in the following years, which sets out measures to be taken to enforce IPR protection during the year. China has improved its IPR legal and policy framework, as well as the level of protection and application. Another major move is that the Chinese government has established a national leading group on combating infringement and counterfeiting, which is a permanent mechanism to crack down on IPR violations. The leading group and its office at the Ministry of Commerce issue a work plan every year and priority areas for each quarter, and oversee the implementation of them. This has achieved notably good results.

So far, the substantial negotiations on the China-Korea FTA have been concluded. The IPR chapter of the FTA has detailed provisions on trademark, copyright and patent, and also on implementation and cooperation. This underscores China and South Korea’s commitment to the protection and use of IPR. Regarding various disputes that foreign companies may encounter in China, including possible IPR disputes as you mentioned, we encourage the companies to seek remedy by means of law. In the meantime, we encourage Chinese companies to find proper solutions in accordance with law when they encounter IPR disputes in South Korea.

Shen Danyang: This concludes the press release today. Thank you.

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