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MOFCOM Holds Regular Press Conference (June 10, 2021)

Gao Feng: Friends from the media, good afternoon. Welcome to MOFCOM’s regular press conference. Since I don’t have any announcement to make, we may proceed directly to the Q&A session. The floor is open.

China Business News: What are the outcomes and highlights of the recently concluded Consumption Promotion Month? What steps will MOFCOM take to consolidate the recovery of consumption?

Gao Feng: From May 1 to May 31, MOFCOM, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, the Ministry of Culture and Tourism and the State Administration for Market Regulation launched the 2021 National Consumption Promotion Month. With the joint effort of all local governments, authorities and market entities, more than 7,300 special events were held, including over 3,100 key provincial activities with the participation of more than 200,000 businesses. According to statistics of third-party payment platforms monitored by MOFCOM, throughout the National Consumption Promotion Month, a total of 4.82 trillion yuan worth of goods and services was sold, up 22.8% from May last year. The highlights of this year’s Consumption Promotion Month are:

First, a variety of fabulous activities were held. MOFCOM, in working with relevant authorities and local governments, held such national events as China International Consumer Products Expo, “Zhonghua Meishi Hui (China Cuisine Festival)”, Time-Honored Brand Carnival and Brand and Quality Online Shopping Festival. Focusing on rural consumption, commodities consumption, services consumption and new-type consumption, local governments leveraged unique local advantages and launched consumption promotion activities with local characteristics. Activities including Beijing’s “Consumption Season”, Zhejiang’s “Consumption in Zhejiang”, Chongqing’s “Aishang Chongqing”, Guangxi’s “March 3 Consumption Festival” and Fujian’s “Quanmin Legou (Happy Shopping in All Fujian)” have become unique local brands, tapping into consumer market vitality.

Second, quality consumption was promoted. With brands debuting their latest merchandises and offering discounts, demand for consumption upgrading and high-quality purchases was unleashed. Medium- and high-end consumption grew rapidly, and overseas consumption continued to give way to its domestic counterpart. During the Brand and Quality Online Shopping Festival, online sales of sterilizing washing machines, custom-made furniture and smart wearable devices grew by 117.8%, 95.4% and 67.2% respectively. Throughout the Time-Honored Brand Carnival in May, more than 60 key special activities were held to activate the transformation and upgrading of China Time-Honored Brands, with on-line and on-site sales surpassing 1 billion yuan. The sales of the nine offshore duty-free stores in Hainan increased by 159% year-on-year.

Third, services consumption swiftly recovered. The recovery of services consumption is boosted by local one-stop commerce, tourism and culture platforms integrating travel, shopping, entertainment, food and accommodation. During the China Cuisine Festival in May, eight special events including “Taste of Jiangsu” and “National Tour of Shaxian Delicacies” were held to expedite the recovery of catering consumption. According to statistics of ChinaUMS, accommodation, catering and entertainment consumption grew by 64.5%, 33.5% and 11.3% in May respectively; compared with May 2019, the growth rate were 15.8%, 7% and 2% respectively.

Fourth, new-type consumption flourished. Local authorities took steps to facilitate consumption, improve smart consumption, and tap into new consumption drivers, by promoting deep integration of on-line and on-site scenarios, utilizing new technologies, concepts and media and fostering new consumption models, modes and scenarios. E-CNY pilot programs launched in Shanghai, Suzhou, Shenzhen and other cities have made payment more convenient. Major e-commerce platforms participated in the Time-Honored Brand Carnival to stimulate online-sales of products of China Time-Honored Brands. For instance, Shandong organized over 300 livestreaming activities for China Time-Honored Brands, which generated a revenue of 166 million yuan; livestreaming activities for Beijing cuisines led to a 30%-strong month-on-month growth of customers.

Fifth, consumption potential in the rural areas has been released. Consumption promotion campaigns were carried out across villages and counties in different localities to better satisfy the new needs of rural consumers. In many localities, trading companies organized sales events such as street markets, through which villagers could buy daily necessities and specialty products. Sales exhibitions of cars and home appliances were held in the countryside. Rural residents could enjoy life services and urban citizens could visit the beautiful villages for agritainment. To be specific, China Automobile Dealers Association (CADA) arranged 10 car exhibition tours in the countryside, selling over 80,000 cars with a sales value of RMB11.711 billion. During the May Day holiday, agritainment businesses under key monitoring in Chongqing scored a 57% turnover growth. We called for business integrity and frugality, opposed extravagance, implemented the “clean plate campaign”, and encouraged green, low-carbon and sustainable consumption. We worked towards the stability and vitality of the consumption market, and further promoted consumption upgrading and high-quality development.

In the next step, MOFCOM will keep coordinating the work on epidemic containment and on consumption upgrading, with a view to supporting the development of a robust domestic market and the new development paradigm.

Phoenix: We’ve noted that the heads of the commercial departments of China and the US had a telephone call this morning. Mr. Spokesperson, could you brief us on the details of the phone call? Did they mention the issue of tariffs?

Gao Feng: This morning, Minister of Commerce Wang Wentao and the U.S. Commerce Secretary Raimondo had a telephone call at the latter’s request. The two sides had a candid and practical exchange of views on relevant issues of each other’s concerns on the commercial front between the two countries. Recognizing the importance of dialogue and exchanges between China and the U.S. in the field of commerce, the two sides agreed to push forward the practical cooperation and sound development of trade and investment, while properly handling differences. Both agreed to keep in contact at the working level.

We will continue to provide updates as new information becomes available.

South China Morning Post: The U.S. Trade Representative Katherine Tai said that the trade relationship between China and the U.S. has “significant imbalance”. The Biden Administration is “committed to bringing balance back”. How does MOFCOM comment on that? It’s been briefed that China and the U.S. have started normal communication on trade and economy. Have the two countries evaluated the implementation of the Phase One Agreement? Will there be any plan of mutual visit? Is there any progress in the discussion on tariff exclusion?

As two major economies of the world, China and the U.S. essentially benefit from their trade and economic relations. They both have their own major concerns on trade and economic fronts. Nevertheless, they can explore how to address these concerns through dialogue and consultation based on mutual respect and on an equal footing. Recently, Vice Premier Liu He had phones calls with Ambassador Katherine Tai and Treasury Secretary Janet Yellen respectively. This morning, Minister of Commerce Wang Wentao had a phone call with the U.S. Commerce Secretary Raimondo. The commercial teams of the two sides are in contact with each other. We will provide updates as new information becomes available.

CNBC: I have two questions. The first is about the recent changes in cross-border e-commerce. The second is about the COVID-19 epidemic in Guangdong. What impact will it have on China's foreign trade in the near future?

Gao Feng: Regarding your first question, according to the statistics of China Customs, in the first quarter of this year, China's cross-border e-commerce import and export reached RMB419.5 billion, an increase of 46.5% year-on-year, showing the following new features: First, channels. Cross-border e-commerce mainly relies on third-party platforms, and have gradually expanded to various new channels such as independent websites, social networking sites and search engine marketing. Second, the main players have evolved from primarily individuals and trade-oriented enterprises at the beginning to trade-oriented and production enterprises integrated for development, many production enterprises have moved online and become much more digitized. Third, products have gradually shifted from focusing solely on cost performance to also focusing on brand, quality, standard and service, and tailor-made and personalized products grew rapidly.

In the next step, we will continue to track the new features and trends of cross-border e-commerce, increase innovation in policies, management and services, create sound business environment, and promote the healthy and rapid development of cross-border e-commerce.

As for your second question, from what we know so far, the epidemic has not had any obvious impact on the supply and industry chains of Guangdong's foreign trade. Recently, Guangdong's monitoring of more than 2,000 export enterprises shows that more than half of the enterprises find that the amount of their newly signed orders have increased year on year. We will fully support Guangdong in coordinating epidemic prevention and control and its foreign trade development.

National Business Daily: We have noticed that the Ministry of Commerce recently held a national on-site meeting on the development of an urban commercial system, and proposed to promote the establishment of an intensive, efficient, regulated and orderly urban commercial system with sound outlets, diversified players, rich business patterns, harmonious businesses and community in five years. Could the Ministry of Commerce brief us on the specific plan?

Gao Feng: According to the arrangements of the CPC Central Committee and the State Council, in order to smooth the domestic circulation, the Ministry of Commerce assigned a special team to actively study and arrange the development of an urban commercial system nationwide, and put forward the main tasks and specific measures for some time to come. To sum up, we will strive to fulfill the "five tasks" in a coordinated manner and focus on the "three priorities" in five years.

We will fulfill the "five tasks" in a coordinated manner: First, we will strengthen planning and guidance, give play to the leading role of international consumption center cities, and help different cities make business plans according to their local conditions, so as to build a layered and classified urban commercial layout aiming to satisfy consumer demand at different levels. Second, we will improve supply quality, focus on increasing the supply of quality goods and services, continue to promote the differentiated, quality and diversified development of business patterns, and promote the upgrading and expansion of urban consumption. Third, we will promote enterprise transformation, guide commercial enterprises to return to the commercial root, accelerate digital transformation, intelligent operation and chain store development, and cultivate new urban commercial players. Fourth, we will improve the distribution network, develop joint distribution, innovate terminal distribution, continue to develop more network-based, intensified and convenient urban distribution, and improve the operation efficiency of urban commerce. Fifth, we will strengthen regulated administration, continuously optimize business environment, align culture and tourism resources, promote sustainable development with green circulation, and promote high-quality development of urban commerce.

The three priorities are 15-minute life circle, urban shopping circle and logistics and delivery, which have a big role to play in driving business growth in the cities. First, 15-minute life circles. We will bring business resources to communities to meet the gap in community-level business and make people’s life easier, smarter and better. Second, differentiated development of shopping circles in cities. Building on the pedestrian streets upgrade program, we will continue to enhance the quality and standards of all sorts of shopping circles, make consumption environment more enabling and satisfy diverse consumption demands of urban residents. Third, urban logistics and delivery networks. We will vigorously promote standardization, IT application, facilitation and integration of commercial logistics and reduce the cost and enhance the efficiency of urban logistics and delivery via special campaign on high-quality development of commercial logistics.

CMG: We noted that the Senate passed the United States Innovation and Competition Act (USICA) on June 8th aimed at countering China’s growing influence, economic power in particular, by investing over 200 billion dollars in technology, science and research. What comment does MOFCOM have on that?

Gao Feng: We’ve noted that the Senate passed the USICA. Countries are duty-bound to grow their industry and improve people’s well-being. We welcome development of other countries’ economy, science and technology, but we oppose linking one’s own development plan with attempts to suppress another country, politicizing economic issues and playing zero-sum games. This does not serve the themes of the times which are peace and development.

CGTN: It is reported that President Biden signed an executive order on June 9th revoking Trump’s executive orders aimed at banning TikTok, WeChat and other apps controlled and developed by Chinese companies. The US Department of Commerce was also required to make new executive or legislative proposals to deal with these apps. On the other hand, he said the TikTok security investigation continued. What is China’s response?

Gao Feng: We’ve noted the recent revoking of the relevant executive orders on TikTok, WeChat and other Chinese apps signed by last US administration, which is a positive step toward the right direction. But we also noticed the US called for security risk review on foreign apps and the CIFIUS investigation on TikTok is still going on. We hope the US can treat Chinese companies in a fair and just way and do not politicize trade issues.

Bloomberg: I have two questions. Australia has decided to resort to the WTO over tariffs on Australian wine. What’s your comment? My second question is a follow-up on the one raised by South China Morning Post. USTR Katherine Tai said that the severe imbalance in China-US relations has hurt the interests of some American businesses, while you just described China-US relations as mutually beneficial. Are there any fundamental differences in China-US relations and are they going to stand in the way of future negotiations between the two countries?

Gao Feng: As for the first question, I have clarified China’s principles and positions at the press conference last week, when asked about the disputes between China and Australia at the WTO.

As for the second question, I said that both sides have important concerns in trade and economic areas, and may explore solutions through dialogue and consultations on the basis of mutual respect and equal treatment.

Are there any more questions? If not, this is the end of today’s press conference. Thank you.

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