Gao Feng: Members of the press, good afternoon. Welcome to MOFCOM regular press conference. Let me begin by briefing you on the development of China’s services trade in the first four months this year.
From January to April, the import and export of services were RMB1.56445 trillion in value, up by 3.3% year-on-year; in breakdown, service exports increased by 23.2% to RMB746.21 billion and imports dropped 10% to RMB818.24 billion. Service exports increased by 33.2 percentage points more than imports, driving the service trade deficit down 76.3% to RMB72.04 billion, a decrease of RMB231.32 billion year-on-year. Compared with the same period in 2019, service exports and imports fell by 10.3%, or a two-year average of 5.3%, of which exports grew by 20.5%, or a two-year average of 9.8%, and imports declined by 27.3%, or a two-year average of 14.7%. The following features can be observed.
First, service imports and exports grew fast in April. China’s total service imports and exports in April reached RMB406.19 billion, an increase of 12.3% over the same period last year. Among them, exports stood at RMB200.46 billion, up 24.3% year-on-year; imports were RMB205.73 billion, up 2.7% year-on-year. The three fastest growing areas were financial services, transport services and insurance services, with increases of 49.3%, 44.9% and 40% respectively.
Second, knowledge-intensive services trade gained a larger share. From January to April, the import and export of knowledge-intensive services in China amounted to RMB732.53 billion, an increase of 14.9% year-on-year, accounting for 46.8% of the total import and export of services, an increase of 4.7 percentage points. Among them, exports of knowledge-intensive services amounted to RMB413.51 billion, up 17.5% year-on-year, accounting for 55.4% of total service exports; the areas with faster growth in exports were financial services, personal, cultural and recreational services, and intellectual property royalties, up 37.1%, 36% and 34.6% respectively. Imports of knowledge-intensive services amounted to RMB319.02 billion, up 11.8%, accounting for 39% of total service imports; the areas with faster growth in imports were financial services and insurance services, up 40.4% and 33.1% respectively.
Thirdly, the import and export of travel services continued to decline. At present, the Covid-19 pandemic has a lingering impact on the import and export of travel services. In the first four months, China’s travel services import and export dropped by 41.3% to RMB248.19 billion, of which exports fell 41.2% and imports 41.3%, excluding travel services. From January to April this year, China’s service imports and exports grew by 20.6%, with exports up 27.9% and imports up 12.7%.
That’s all for the briefing. Now I’m ready to take your questions. The floor is open.
CNS: The APEC Ministers Responsible for Trade Meeting will soon take place. What expectations does MOFCOM have for the meeting?
Gao Feng: The 27th APEC MRT meeting will be held via video links on June 5. Minister Wang Wentao of Commerce will attend the meeting on behalf of China.This year’s meeting is an important one held in a time when a pandemic is wreaking havoc and the regional and world economic growth faces severe challenges. It is also the first ministers’ meeting on regional trade and economic cooperation in the Asia-Pacific. China hopes that this meeting can have thorough discussions, reach practical outcomes, and raise the voice of the Asia Pacific on topics of great interest to APEC economies and those in the international community such as joint response to the pandemic and supporting the multilateral trading system so that APEC economies can defeat the virus together, keep the regional industrial and supply chains secure, and promote steady recovery and sound growth of the economy in the region. Thank you.
Phoenix TV: We see that Vice Premier Liu He recently had video calls with United States Trade Representative Katherine Tai and Treasury Secretary Janet Yellen respectively. How does China evaluate the results of these two calls? Does this mean that China-US economic and trade exchanges have restarted? What are the follow-up arrangements?
Gao Feng: In the past week, Vice Premier Liu He had video calls with Ambassador Katherine Tai and Treasury Secretary Janet Yellen respectively, both for about 50 minutes. The two calls have several features: First, the communication between the two sides started smoothly. During the two calls, the two sides exchanged views on China-US economic relations and trade, macroeconomic landscape, domestic policies and other issues on an equal footing and with mutual respect. Both sides believe that the exchanges are professional, candid and constructive, and China and the United States have started normal communications in the fields of economy and trade. Second, seeking common ground while reserving differences is a consensus. Both sides believe that China-US economic relations and trade are very important, and there are many specific areas for cooperation. Both sides also raised their own concerns. China has taken the background and state of domestic economic development into full consideration and expressed our specific concerns. Third, starting with practical solutions to problems. The two sides agreed that in the next step, it is necessary to make joint efforts from the perspective of benefiting China and the United States and the whole world, pragmatically solve some specific issues for producers and consumers, and promote the healthy and stable development of China-US economic and trade relations. Thank you.
South China Morning Post: I have two questions. The first one is that the WTO agreed to set up a dispute settlement team last Friday to deal with the dispute caused by China's anti-dumping and countervailing duties on Australian barley. New Zealand also indicated that it would participate as a third country. What is the response of the Ministry of Commerce? The second problem is that the trade ministers of the Group of Seven (G7) issued a meeting statement last week, saying that some countries have damaged the global trading system and called for a reform of international trade rules. What is the response of the Ministry of Commerce?
Gao Feng: Regarding your first question, as we all know, upon applications by China's domestic industries, China initiated anti-dumping and countervailing investigations against imported barley originating in Australia according to law. After a one-and-a-half-year investigation, China has decided to impose anti-dumping duties and countervailing duties on imported barley originating in Australia from May 19, 2020 in accordance with law.
What I want to emphasize is that the government of China has always respected WTO rules and regulated foreign trade in a way consistent with WTO rules. China will properly handle this case in accordance with WTO dispute settlement procedures. At the same time, China respects New Zealand's right to participate in the trial of relevant dispute cases as a WTO member and as a third party.
On your second question, since China joined the WTO, China has always been an active participant, firm defender and important contributor to the multilateral trading system. China fully fulfilled its accession commitments, firmly supported the multilateral trading system, made contributions to the liberalization and facilitation of global trade and investment, and became an important engine for world economic growth, thus promoting mutual benefits, win-win results and common development among all members.
China supports necessary reforms of the WTO to enhance its authority and effectiveness, and opposes unilateralism and protectionism. We believe that international economic and trade rules should be jointly formulated by all parties, and rules formulated by one country or several countries should not be imposed on others. China is willing to work with all parties to actively promote WTO reform, improve the global economic governance system, and promote the development of the world economy in a more open, inclusive, balanced and win-win direction. Thank you.
Economic Daily: According to the PMI released by the National Statistics Bureau in May, the new export order index fell below the threshold to 48.3%, partly caused by the dampening effect of price rise on demand and the elimination of steel tax rebate. How does MOFCOM view the export performance recently? A growing number of businesses are complaining about raw materials price surge, highly fluctuating exchange rate, and squeezed business profit due to high international logistics cost. How does MOFCOM intend to solve these problems?
Gao Feng: This year, China’s export maintained comparatively rapid growth. Our survey of over 20,000 businesses at the 129th Canton Fair suggests that 43.2% of the businesses can sustain for at least three months with the orders they have secured. Our research across different regions, industries, and businesses also show sound momentum for export in the first half of this year.
Since the second half of last year, businesses have been struggling with rising raw material prices, sharp exchange rate fluctuations, and difficulties in seaborne logistics. Acting on the decisions and plans of the CPC Central Committee and the State Council, we have worked to ensure steady supply and stable price of commodities, diversify import sources, and step up international cooperation, in an effort to build win-win and steady trade channels for commodities. We have strengthened cross-departmental cooperation to ensure transport capacity and better monitor freight price. We will continue to streamline administration and delegate powers to improve business environment and lower business cost. We will take concrete and targeted measures to support the steady operation and healthy development of all types of foreign trade companies, especially SMEs. Thank you.
Securities Daily: MOFCOM and other 11 authorities have recently published the Opinions on Advancing the Development of the 15-minute Community Life Circle. Compared with previous work on life circles and community commerce, what’s new in this document?
Gao Feng: MOFCOM, in collaboration with several departments, is moving forward the construction of the 15-minute community life circle with a people-centered approach. This is an important step to elevate commercial systems from a new starting point, in line with the new trends and traits in consumption.
First, the forms of business must meet people’s needs. The business outlets in the community life circles should be laid out systematically and properly. Commercial facilities should be linked to public facilities, and commercial operation should be connected to community governance. Commerce and residence must develop in harmony. Second, new technologies, new forms of business and new business models must be integrated. Business outlets should talk business, by first and foremost meeting consumer demands. While the commercial entities improve the quality and level of their services, new technologies should be employed to foster new types of business and models. The integration of online and offline business should meet immediate consumption needs and unlock consumption potential. Third, the weak links in the current commercial network must be beefed up systematically. The applicable departments will act together with the problems and goals clearly in mind. New policies will be drafted to increase the housing supply for commercial outlets, guide banks and insurers to increase lending support and financial inclusion, lower operational cost, and implement electronic certificates and license, with the aim to enhance vitality of the business outlets. Fourth, pilots will be gradually rolled out to test effectiveness. We will start with pilots and expand them step by step. In addition to national-level pilots, we also encourage pilots at sub-national levels, so that we can complete and optimize the layout of urban commercial network, expand the coverage of the community life circles, and truly benefit people with convenient and high-quality commercial and consumer services. Thank you.
International Business Daily: My question is also about the opinions on developing 15-minute urban community service circles published by MOFCOM and 11 other authorities. The document requires authorities to provide guidance for regulating business activities, encourage the formulation of standards, launch training programs, and regulate operation and service of businesses. What tasks will MOFCOM work on? How will MOFCOM guide the implementation of the community service circles?
Gao Feng: To implement the Opinions on Developing 15-Munite Urban Community Service Circles, MOFCOM will work with relevant authorities to enhance top-level design, by instructing local authorities to formulate special plans and pilot programs. Meanwhile, we will soon publish the Guidelines for 15-Munite Urban Community Service Circles to better guide relevant work and make it more operable. On-line and off-line training will be provided through vocational schools and other channels to enhance operations and services of businesses. Besides, business associations will be encouraged to develop standards for the community service circles to promote integrity and self-discipline.
We will summarize, in a timely manner, local experience and practices in operation and administration, “inclusive and prudent” supervision, streamlined business opening procedures, integrity promotion and policy support for community service circles, and share them nationwide when appropriate. Thank you.
Bloomberg: The Biden Administration may amend a ban introduced during the Trump Administration on investments in companies linked to China’s military. What’s your comment?
Gao Feng: China has re-emphasized that the removal of sanctions and restrictions and discontinuation of oppression against Chinese enterprises will benefit not only China, but also the U.S. and the rest of the world. Thank you.
China Business News: Some U.S. businesses, believing that the tariffs imposed by the U.S. government on other countries are driving up domestic prices of raw materials and thus affect their competitiveness, call for the U.S. government to remove these tariffs. Some of these raw materials are involved in trade with China. What’s your comment?
Gao Feng: This fully shows that additional tariffs are not in the interest of the U.S. or the rest of the world; nor will they help in world economic recovery. Thank you.
CNR: Recently, statistics of trade in services from January to April were released, and the office for the State Council inter-ministerial meeting for the development of trade in services circulated 16 “best practices” from the pilot projects for deepening innovation-driven development of trade in services in all respects. What’s the progress of these pilot projects so far? What are the plans in the next step?
Gao Feng: Last August, the State Council decided to launch pilot projects for deepening innovation-driven development of trade in services in all respects in 28 localities for three years. So far, 122 pilot measures have been underway in an orderly fashion with positive progress. Taking the initiative, the pilot areas have generated many highly innovative experience and practices that are suitable to be shared nationwide.
On opening up wider, Xixian New Area of Shannxi Province and and Chongqing have explored new paths of institutional opening-up in such areas as the fifth freedom of the air and legal cooperation in the pursuit of openness and development of international transportation and legal services. On improving facilitation, cities such as Xi’an, Hangzhou and Hefei have integrated resources to promote the cross-border movement of technology, data and personnel, in a bid to step up development of a liberalized and facilitative business environment for services trade. On innovating development patterns, Weihai, Changchun, Harbin have pushed for the boom of new business models and patterns of services trade by extending the industrial chains of international ship maintenance and repair and car services, and improving the system to promote traditional Chinese medicine. On improving the promotion mechanism, Shanghai, Xi’an and Nanjing have built global-oriented public service platforms of services trade in the areas of finance and IP to provide multilevel and one-stop public services for businesses. On optimizing supportive policies, Suzhou and Wuhan have introduced securitization of bio-pharmaceutical intellectual properties and credit enhancement for micro, small and medium-sized companies, in a view to improving the policy system adapted to the features of services trade.
Moving forward, MOFCOM will work with relevant departments to step up guidance for pilot regions, move faster to replicate and promote institutional outcomes elsewhere, leverage the exemplary and leading role of the pilot regions, keep delivering institutional benefits, and work towards the high quality development of services trade, Thank you.
If there are no further questions, that concludes today’s press conference. Thank you.
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