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MOFCOM Regular Press Conference (April 8, 2021)

Gao Feng: Friends from the press, good afternoon. Welcome to the regular press conference of the Ministry of Commerce. I wish to begin by briefing you with some figures.

In the first two months of this year, China’s service import and export registered RMB713.98 billion, down by 3.6% year on year. Service export performed much better than import, reducing the trade deficit. knowledge-intensive service trade gained a larger share. Compared with the same period in 2019, service export and import fell by 14.7%. In breakdown, export grew by 14.7%, import fell by 30.5%. In dollar terms, service import and export registered USD110.35 billion in January and February, up by 3.7% from the same period last year. In break down, service export was worth USD51.83 billion, up by 31.1%; service import was worth USD58.52 billion, down by 12.5%. The dynamics in service trade can be characterized as follows:

First, services export grew by over 20% year-on-year. In the first two months of this year, China's services export amounted to 335.35 billion yuan, up 21.9%; services import stood at 378.63 billion yuan, down 18.6%. Services export increased by 40.5 percentage points more than services import, narrowing the trade deficit in services by 77.2% to 43.28 billion yuan, down 146.88 billion yuan year-on-year. The fastest growing area in services export was transport, which registered an increase of 93.9%.

Second, the share of trade in knowledge-intensive services increased. In the first two months this year, China's export of knowledge-intensive services registered 324.16 billion yuan, up 17.2% and accounting for 45.4% of China’s total trade in services, an increase of 12.7 percentage points. Export of knowledge-intensive services registered 182.61 billion yuan, up 14.7% and accounting for 54.5% of the total export of services; export growth was faster in the fields of financial services, insurance services, as well as telecommunications, computer and information services, which were up 48.4%, 39.6% and 30.2% respectively. Import of knowledge-intensive services registered 141.54 billion yuan, up 20.6% and accounting for 37.4% of total services import; faster import growth was registered in the field of financial services and telecommunications, computer and information services, which were up 57.3% and 32.2% respectively.

Third, the import and export of travel-related services fell sharply. The Covid-19 pandemic continued to exert a negative impact on trade in travel-related services. In the first two months of this year, China's import and export of travel-related services registered 128.09 billion yuan, down 50%. Export of travel-related services fell by 54.1%, while import of travel-related services fell by 49.6%. This was the main factor leading to the overall decline in trade in services this year. Excluding travel-related services, China's trade in services grew by 21.1% in the first two months of this year, among which export grew by 29.1% and import grew by 12.4%.

This is the announcement I need to make today. Now I am ready to take your questions. The floor is open.

Economic Daily: Recently, MOFCOM and seven other government departments jointly issued the Circular on Fostering Examples in National Supply Chain Innovation and Application. Will MOFCOM introduce specific support policies in the near future to promote firms’ innovation and application related to supply chains?

Gao Feng: Since 2018, MOFCOM has worked with relevant departments to carry out pilot programs on supply chain innovation and application. We have identified 55 pilot cities and 258 pilot firms across the country with a view to facilitating the development of China's modern supply chain system. The pilot programs have achieved positive results.

Recently, MOFCOM, the Ministry of Industry and Information Technology and other six government departments jointly issued a circular to officially launch the work on fostering examples in national supply chain innovation and application. We will strive to foster a number of exemplary cities and firms in supply chain innovation and application within five years to facilitate the coordinated, standardized, digitized, green and globalized development of China’s supply chains. With these efforts, we wish to build a modern supply chain system with smooth connection among producers, suppliers and distributors, as well as between domestic and foreign trade. In the near future, MOFCOM will work with relevant government departments to judge the pilot cities and firms on their merits and select from them the first batch of exemplary cities and firms.

We hope the exemplary cities and firms could help secure new progress in fostering supply chain strengths, raising efficiency and benefits, ensuring security and stability and improving governance efficacy. MOFCOM will work with relevant government departments to take this opportunity to continuously optimize the policy environment for supply chain innovation and application and publicize advanced models and practices developed by the exemplary cities and firms in a timely manner to steadily modernize China’s supply chains. Thank you.

Economic Information: China's foreign trade has continued to grow against the trend, making outstanding achievements even during the off-season. What’s your take on theses achievements and the momentum going forward? In addition, according to the Circular Assigning Key Tasks Set out in the Government Work Report, several government bodies need to introduce policies by the end of April to optimize and adjust import taxation and expand import of quality products and services. What specific plans does MOFCOM have?

Gao Feng: Faced with the impact of Covid-19, the CPC Central and the State Council have made timely plans and decisions since last year, with a slew of unconventional policies to stabilize trade working continuously and playing a significant role in helping Chinese trade companies cut costs, forestall risks, secure orders and explore markets. Under the joint efforts of the government, business and industry, foreign trade got off to a good start in Q1, as a result of the market’s decisive role in resources allocation and a more effective government role.

From our recent survey of over 20,000 foreign trade companies, orders in hand have improved compared to last year. Around half the respondents report strong gains from tax and fee cuts, export rebates and greater trade facilitation. At the same time, they also point to more uncertainties and instabilities in trade outlook this year, given uncertain pandemic situation, unstable industrial and supply chains, and complex international environment, among other risks. The micro-players also face some difficulties and challenges, such as persistently high sea freight rates and insufficient capacity curtailing business capability to take on orders, rising raw material prices driving up costs, and severe labor shortage in some regions. We will follow related developments closely, keep policy consistent, stable and sustainable, and improve related trade policies. We will also help businesses cut costs and raise efficiency and do what we can to promote steady growth in imports and exports and pursue higher-quality trade amid stability.

To actively expand imports, MOFCOM will continue to work with the Ministry of Finance and related departments to optimize import duties and boost the imports of high-quality goods and services. In addition, we will continue to leverage the lead of demonstration zones for innovative promotion of import trade and introduce policy measures to import more advanced technologies, equipment and services and products improving people’s livelihoods. We will also encourage new import business types, optimize marketing models for imports, and improve regulatory facilitation to better serve the creation of a new development paradigm. Thank you.

Phoenix Satellite TV: We have noted a VOA report that anti-China protests have continued in Kazakhstan with new outbreaks in recent days. Some critics say that China intends to relocate polluting producers to the country. What is MOFCOM’s comment?

Gao Feng: We have noted related coverage. To our understanding, the so-called anti-China protests are mere vicious and continuous hype by a small number of people. The remarks of the so-called critics are not true and serve an ulterior motive.

China and Kazakhstan are permanent comprehensive strategic partners. Kazakhstan is also where the Belt and Road initiative was first proposed. In recent years, the two countries have worked together to pursue Belt and Road cooperation that is productive and beneficial to both peoples. Last year, the two countries overcame the impact of the pandemic and scored steady trade growth. According to Kazakh statistics, bilateral trade value was up 4%. According to Chinese statistics, bilateral trade was up 20% in the first two months of the year, riding on a strong momentum of recovery. Kazakh flour, flax seeds, camel milk powder, among other quality green agricultural products have reached tens of thousands of Chinese households. 2020 saw nearly 10,000 services of the China-Europe freight train that runs through Kazakhstan, a hub connecting Europe with Asia. As of the end of 2020, China’s stock direct investment had totaled US$ 7.831 billion across the sectors in Kazakhstan, contributing immensely to local employment and economy. Green economic cooperation led by new energy, eco-agriculture and healthcare move forward steadily. For example, the 100MW wind power station in the Jambyl region was connected to grid, which can help cut local SO2 emissions by 1000 tons and CO2 emissions by nearly 300,000 tons.

Under the philosophy of amity, sincerity, mutual benefit, and inclusiveness, China will continue to observe the principle of wide consultation, joint construction and shared benefits and work with Kazakhstan to deepen practical cooperation across-the-board, so as to nurture the soil of the Belt and Road initiative with the outcomes of bilateral cooperation and benefit the peoples along the Belt and Road. Thank you.

TAS: First question, the Boao Forum for Asia (BFA) is going to be held in Hainan in April this year. Will MOFCOM send its representatives to attend BFA? If so, what issues do they hope to discuss and what events will they attend? My second question is about MOFCOM’s stance on BFA’s influence. This year marks the 20th anniversary of the establishment of BFA. How does MOFCOM assess BFA’s influence in the world? Does it have any special influence on trade and economic fronts?

I’d like to make an overall response. Since its inception, the Boao Forum for Asia has become an important platform to build consensus, advance economic integration of Asia, promote common development and address Asian and global issues.

This year marks the 20th anniversary of BFA. MOFCOM will keep engaged in and support the work of BFA, listen to the views and suggestions by the business community of other countries on China’s trade and economic development, promote experience sharing and exchanges on trade and economic policies and development practices in Asia and among the world, and jointly explore the “Boao Solution” to fight the pandemic, improve global governance and revive global economy. Thank you!

International Business Daily: We’ve seen that some pilot Free Trade Zones (pilot FTZs) in the third batch have presented their performance of the past four years as they are celebrating the fourth anniversary of their establishment. What progress has been made over the past four years for the third batch of pilot FTZs?

It’s been four years since Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan and Shaanxi pilot FTZs were set up in April, 2017. Four years on, these pilot FTZs have forged ahead with bold steps, made breakthroughs and achieved excellent performance. So far, the 1055 pilot tasks identified by the master plans of these pilot FTZs have been basically put in place. A total of over 150 outcomes of institutional innovation have been replicated and scaled up nationwide. The six provinces and Chongqing municipality have delegated provincial-level power regarding more than 1100 items to the pilot FTZs. The pilot FTZs have effectively played their role as the “test field” of reform and opening up, and realized the pilot FTZs’ original purpose of exploring reform innovation on a broader scale and breaking new ground in pursuing opening-up on all fronts.

Regarding the overall progress, these seven pilot FTZs have followed through the instructions of the CPC Central Committee and the State Council and focused on institutional innovation with replicable and scalable outcomes on the basis of their own strategic positions and unique strengths. They have made impressive progress in enhancing trade and investment liberalization and facilitation, pushing forward the reform of delegating power, streamlining administration and improving government services, focusing on the open development of competitive industrial chains, and supporting major national strategies. For instance, Liaoning pilot FTZ has carried out exploration in the reform of state-owned assets and state-owned companies and in industrial transformation and upgrading. Zhejiang pilot FTZ has focused on the open development of the whole industrial chain of oil and gas, and attracted more than 7500 oil and gas companies to settle in the FTZ. In 2020, the supply of bunker fuel oil increased by 15.1% year on year, and the throughput volume of oil and gas reached 127 million tons. Henan pilot FTZ has rolled out the construction of “Four Silk Roads”, i.e. Silk Road in the Air, Silk Road by Land, Maritime Silk Road and Online Silk Road. The trading volume of cross-border e-commerce amounted to RMB 174.5 billion, up by 10.4% year on year. Hubei pilot FTZ has worked vigorously to promote the exportation of pharmaceutical products and products of other emerging industries despite the difficulties of COVID-19. Its foreign trade was up by 3.1% year on year in 2020. Chongqing and Sichuan pilot FTZs have worked together to push for the reform of “single document regime” for multimodal transport, facilitated innovation in the railway consignment note that can be used as a document of title and explored new rules of land-borne trade. Shaanxi pilot FTZ and the Belt & Road countries have forged increasingly close links, contributing to trade, culture and people-to-people connectivity.

Moving forward, MOFCOM will follow the instructions of the CPC Central Committee and the State Council, continue to work with relevant departments and local governments to support pilot FTZs in institutional innovation based on their own strategic positions and unique strengths, encourage them to produce more replicable and scalable outcomes of institutional innovation, and promote the virtuous cycle featuring market connectivity, industrial integration, and rule alignment between the domestic and international markets that support each other in innovation, so as to explore new paths, accumulate useful experience and made new contributions to building the new development paradigm.

We welcome our media friends to visit the pilot FTZs and find more vivid stories about how they take the lead in pursuing innovation. Thank you!

Shenzhen TV: Recently, the UK urged the G7 to overhaul international trading rules and enforce tougher trade policies over China. Speaking ahead of a meeting of G7 trade ministers, UK Secretary of State for International Trade Elizabeth Truss called for the work of the World Trade Organization (WTO) to be reviewed, in particular the organization’s position on China. She held that it is wrong for China to continue to be designated as a developing country and receive WTO preferences. What’s your comment?

Gao Feng: Regarding China’s developing country status in the WTO, China has re-stated that China, as a responsible, major developing country, is willing to make contributions proportionate to its capacities in the WTO, following the principle of balance of rights and obligations.

Since it joined the WTO, China has fully fulfilled its accession commitments, firmly upheld the multilateral trading system and stood against unilateralism and protectionism. China has been an active participant of negotiations on the Trade Facilitation Agreement and the extended Information Technology Agreement, among others. All these have made useful contributions to global trade development and people’s livelihood all over the world.

No matter how the external environment may evolve, China will always stand side by side with the developing members, protect their interests, and make more contributions proportionate to its capacities. Thank you.

Radio Television Hong Kong: Could you talk about the consumer market in March? Also, could you talk about the consumption in retail and catering over the Qingming Festival?

Gao Feng: Current statistics show that China’s consumer market continued to recover and grow in March. Commercial activity indices for the service sector increased significantly over the previous month; particularly, the indices for accommodation and household services have rebounded to the booming range. We are still collecting and analyzing relevant statistics, and will release the results in a timely fashion.

As for the consumer market during the Qingming Festival, the sales of certain products including flowers and plants, clothing, and jewelry grew remarkably, driven by seasonal changes, discounts and promotional activities. Key enterprises under monitoring in Tianjin, Shanghai, Jiangsu and Chongqing saw their sales increase by 77%, 55%, 45% and 40% year-on-year. The sales of some flower markets grew by multiple folds. The sales of some domestic brands and services jumped by 40% to 50%. Daily sales of jewelry on some e-commerce platforms picked up by more than 20% year-on-year. The supply of daily necessities was abundant throughout the festival; the prices of pork, vegetables and eggs remained stable and trended downward. Fueled by a strong will for travel, homecoming trips, spring outings and catering became a powerhouse. According to a ChinaUMS survey, daily sales of catering businesses soared by 59.9% year-on-year. Statistics from online platforms show that in Beijing and Shanghai, the average number of accommodation orders in the two days ahead of the festival grew by 53% and 30% respectively compared to a week before. Visits to libraries, cultural facilities and museums in Sichuan surged by five times over the same period last year. Thank you.

Global Times: MOFCOM’s Department of Electronic Commerce and Informatization recently published a report on the development of the online retail market in 2020. The report calls for intensified, law-based governance for e-commerce, especially for regulations on data security and unfair competition, and protection for consumer rights. What specific measures will MOFCOM take to accomplish these targets and commits itself to the sustained and sound development of the e-commerce market?

Gao Feng: In promoting e-commerce development, MOFCOM has prioritized both development and regulation, and stressed both innovation and security. When it comes to the sound development of e-commerce in 2021, MOFCOM will focus on the following:

First, strengthen the top-level design. We will work with relevant departments to formulate the development plan of e-commerce during the 14th Five-Year Plan period, and promote innovation, upgrading, standards, security and other relevant work centered on high-quality development. Second, improve system building. We will actively work with relevant departments to promote the formulation and revision of laws and regulations on e-commerce, and improve the legal system on e-commerce. We will accelerate the formulation of standards on B2C e-commerce platform, live-streaming e-commerce and other related fields, guide e-commerce enterprises to regulate their business practices, and promote healthy development of this sector. Third, promote integrity in e-commerce. We will actively promote the implementation of standards for the evaluation of integrity records of e-commerce companies and encourage market players to enhance integrity. Based on the national e-commerce public service platform, we will encourage businesses to operate with integrity, keep integrity records and disclose the relevant information. Thank you.

Bloomberg: It is predicted that global trade will increase by about 9% this year. Do you have any relevant predictions for China's foreign trade? Does the Ministry of Commerce have any plans to communicate with the Office of the United States Trade Representative and the US Department of Commerce in the near future?

Gao Feng: As for your first question, I have already covered it just now. According to the businesses, the purchase orders they secured in the first two months this year improved compared with those of last year. However, companies are also faced with some uncertain and unstable factors. We will pay close attention to the development of foreign trade, strive to maintain the continuity, stability and sustainability of policies, work with relevant departments and companies in order to make all efforts to promote the stable development of China's foreign trade, and promote the stable and quality development of foreign trade this year.

As for the second question, I already responded at the regular press conference last week, and I have no further information to share at the moment. Thank you.

Gao Feng: Do you have any other questions? If not, this is the end of today's press conference. Thank you.

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