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MOFCOM regular press conference (April 29, 2021)

Gao Feng: Friends from the press, good afternoon. Welcome to the regular press conference of MOFCOM. I do not have briefing for you today. Now I’m ready to take your questions.

China Media Group: Recently, MOFCOM and the State Administration for Market Regulation (SAMR) rolled out a pilot program on national standardization of commerce and logistics services. Could you share some information?

Gao Feng: The CPC central committee and the State Council place great importance on the standardization in commerce and logistics. Recently, MOFCOM and SAMR have carried out a pilot program to introduce national standards for commerce and logistics services. During the 14th Five-year Plan period, we aim to encourage related regions, industries and market entities to create new ways of standard-setting, implementation, and application. We will launch a set of standards, identify a group of sound examples, and summarize the replicable and disseminable practices. We hope standardization will drive the high-quality development of commerce and logistics and promote the integration of domestic and foreign trade.

The pilot program is open to cities and businesses. All types of businesses involved in domestic and foreign trade integration and improved commerce and logistics may apply, including foreign-invested enterprises. In terms of the directions and areas, we will take a problem-oriented approach to address the bottlenecks and difficulties in domestic and foreign trade. The two directions will be improved quality and efficiency in commerce and logistics, and domestic and foreign trade integration. With regard to improved quality and efficiency in commerce and logistics, there are no restrictions on industries, areas, or forms of business. The purpose is to upgrade logistics infrastructure, create new ways of distribution, and foster distributors. We will explore how standardization can drive new technologies, new types of business and new models in logistics development, and promote green, digital, and intelligent transformation and integration across industries. With regard to domestic and foreign trade integration, the main areas will be the distribution of agricultural produce and consumer goods, cross-border e-commerce, and service trade. We will work on domestic and international standards harmonization, and explore how standardization can contribute to the alignment of certification, inspection and quarantine in domestic and foreign trade.

The pilot program will emphasize the whole-process management in standardization, including four steps: establish a work mechanism, improve the standard systems, intensify standard enforcement, and evaluate the performance and summarize the experience. There will be no restrictions on the specific approaches of the pilots.

Going forward, MOFCOM and SAMR will step up guidance on the pilots, and draft the key points in running the pilot programs and the evaluation rules. We will clarify the paths in running the pilots, provide training opportunities, and ensure the pilots are effective. Thank you.

Yicai: China’s ODI grew by 4.6% year on year in the first quarter, while non-financial ODI fell by 4.9%. What is the main cause for the decline in non-financial ODI? What’s the outlook for ODI this year? What measures will MOFCOM take to support businesses as they go international?

Gao Feng: In the first quarter, China’s non-financial ODI was RMB160.81 billion yuan, down by 4.9% year on year. In dollar terms, non-financial ODI was USD24.8 billion, up by 2.4%. Factoring in the exchange rate, the fluctuation is within a normal range.

This year China’s ODI still faces many uncertainties. In the strive to build a new development paradigm, we will enhance the ODI policies and service system, and provide an enabling environment for businesses to make overseas investment in creative ways and go global with high-quality results. We hope to see win-win results and common development with the destination countries and regions, and inject new impetus into world economic recovery. Thank you.

Red Star News: Recently, the Covid-19 epidemic in India went out of control, which may deal a bigger blow to the local economy and disrupt global industrial chains. What impact will this have on China-India trade?

Gao Feng: China and India are both large developing countries and major emerging economies which are highly complementary and have great potential for cooperation. In 2020, bilateral trade in goods reached US$87.6 billion, registering a decline much smaller than that in India's trade in goods with the rest of the world and showing the strong resilience of bilateral trade cooperation. Since the beginning of this year, China-India bilateral trade in goods has been growing relatively fast. From January to March, bilateral trade volume reached US$27.7 billion, up 42.8% year-on-year.

As far as we know, relevant Chinese enterprises have already acted, and the first batch of oxygen concentrators made in China has arrived in India. Staying committed to building a global health community for all, China stands ready to join hands with India to cope with the challenges posed by Covid-19 to the global and regional economy, and to provide support and assistance to the Indian people as needed within its capacity at any time. Thank you.

The Paper: Recently seven government departments jointly issued the Rules on Regulating Online Livestreaming Marketing (for trial implementation). What specific measures will MOFCOM take to regulate online livestreaming marketing?

Gao Feng: The Rules on Regulating Online Livestreaming Marketing (for trial implementation) are released to implement such laws and regulations as the Cybersecurity Law, E-Commerce Law and Advertising Law, define more clearly the boundaries of all kinds of actors’ rights and responsibilities in the online livestreaming sector, identify each party’s responsibilities, and create a more enabling institutional environment for the healthy, steady development of the form of business.

According to the division of responsibilities, MOFCOM will focus on the following aspects.

First, strengthening credit constraints. We will continue to promote integrity in the e-commerce sector, help implement the Rules on Evaluating the Integrity Files of E-commerce Enterprises. We will encourage e-commerce firms to make business integrity commitments, establish and maintain their integrity files, make credit information publicly available and accept public supervision via the national e-commerce public service platform.

Second, improving the standard system. We will move faster to formulate such sectoral standards as the Guidelines on Rules-making related to Transactions on Business-to-consumer E-commerce Platforms and the Rules on the Management and Services of Livestreaming E-commerce Platforms to better guide E-commerce platforms in meeting relevant statutory responsibilities and further improving operation and management levels.

Third, fostering business models. We will continue to foster business models in the e-commerce sector and give full play to their leading role. Through comprehensive evaluation, we will provide guidance for different types of national e-commerce demonstration bases and e-commerce business models, update the lists of these bases and models as needed and vigorously promote typical practices for the sake of the sound development of the sector. Thank you.

CNR: MOFCOM recently published a draft version of the Rules on Operations Related to Mobile E-commerce Services, which set out sectoral standards, to solicit public opinions. What roles, from MOFCOM’s perspective, will the draft version play? Will the sectoral standards help formulate national standards?

Gao Feng: The sectoral standards that we are soliciting public opinions on are formulated mainly to adapt to the trend of fast-developing mobile e-commerce and services e-commerce. The standards lay out requirements on the operation and management of mobile e-commerce services sellers and platform services providers to guide e-commerce operators in implementing relevant laws and regulations such as the Price Law, the Metrology Law, and the Law on the Protection of Consumer Rights and Interests with a view to improving their operation and management levels.

Going forward, following the guidance of the 14th five-year plan on national standardization and e-commerce, we will continue to push forward standard-setting in key areas and links in the e-commerce sector, and upgrade well-developed sectoral standards that prove to be effective into national standards. Thank you.

CGTN: We’ve noted that MOFCOM issued Guiding Opinions of Ministry of Commerce on Establishing the Internal Compliance Mechanism for Export Control by Exporters of Dual-use Items. Are there any considerations behind the issuance of this Guiding Opinions?

It is a common practice globally to institute compliance guidelines for export control. According to China’s Export Control Law, “the export control administrative department issues export control guidelines, guides exporters to establish and improve the internal compliance mechanism for export control and regulates their operations.”

Through conducting prior in-depth research, soliciting public opinions extensively and drawing on the good practice of other countries, MOFCOM issued the revised Guiding Opinions on Establishing the Internal Compliance Mechanism for Export Control by Exporters of Dual-use Items based on the Guiding Opinions on Establishing the Internal Export Control Mechanism by Exporters of Dual-use Items and Technologies issued by MOFCOM in 2007, offering principle guidance for exporters to establish internal compliance system from 9 aspects, including drafting policy explanation, setting up organizations, conducting comprehensive risk assessment, and defining review processes. The Guiding Opinions has further improved the basic elements of exporters’ internal compliance system, added the Guidance of Internal Compliance of Export Control of Dual-use Items, thus providing exporters with more detailed reference and instructions from the practical perspective. Flexibility is also taken account of in the Guiding Opinions, so that companies can make adjustment accordingly.

We hope to guide exporters to establish and improve an effective internal compliance system, improve the consistency between their export behavior and laws and regulations, and work towards the sound and orderly development of companies. Thank you.

China Business News: The number of newly established foreign-invested enterprises (FIE) in the first quarter this year grew by 47.8% year-on-year and 6.7% even compared to the same period of 2019. What are the reasons behind this? Does it mean that China’s business environment is improving?

Our paid-in foreign investment increased fast in the first quarter of this year. Apart from owing to a relatively low base number of last year, it’s mainly due to the steady recovery of our economy from the pandemic, an optimistic prospect for the market, continued improvement of the business environment, strengthened confidence of foreign investors, and a steady upward trend of investment expectations. According to a recent survey by MOFCOM on over 3200 FIEs, 96.4% companies are generally positive about future operations, up by 2.1 percentage points from the beginning of 2021.

Meanwhile, we have seen that the global pandemic situation and international environment are complex and grim, cross-border investment remains sluggish, cross-border movement of people is clogged, business and investment attraction activities are disrupted, new uncertainties are rising, all of which put strain on our work of foreign investment utilization this year. Moving forward, we will follow the instructions of the CPC Central Committee and the State Council, keep opening up wider and improving our business environment, in a bid to optimize the structure, improve the quality and achieve our target of stabilizing foreign investment, while maintaining the total foreign investment scale stable.

Cover News: According to the figures announced by MOFCOM recently, from January to March this year, the paid-in foreign investment of Eastern, Central and Western China grew by 38.2%, 36.8% and 91% respectively. Why does the western region enjoy a relatively high growth? What is MOFCOM’s take on this?

Our western region saw a large increase in paid-in foreign investment for the first quarter. Apart from owing to a relatively low base number of last year, another key factor is policy guidance. In particular, we revised and released the Catalogue of Encouraged Industries for Foreign Investment (2020 Edition) late last year, according to which qualified FIEs listed in the Catalogue in the western region can enjoy a number of supportive polices, including a 15% reduction of corporate income tax rate, exemption of customs duties for the import of self-use equipment, and preferential access to land for encouraged foreign-funded projects with intensive land use. In the revised Catalogue, 65 entries are added to the national list, and 34 entries are added to the list of competitive industries of the western region. It has further broadened the scope of encouraged industries for foreign investment and boosted foreign investors’ confidence in the western part of China.

We believe that as the infrastructure and business environment in the west continue to improve, its development potential will be further unleashed, and development advantages further strengthened. FIEs will enjoy enormous space for development here. Thank you.

If there’s no further question, that concludes today’s press conference. Thank you.

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