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Online Regular Press Conference of the Ministry of Commerce (July 30, 2020)

Nikkei: I have noticed that the investment and trade between China and the BRI countries have increased rapidly recently. What are the reasons behind this? Could you tell us more about investment and trade?

Gao Feng: In recent years, the BRI jointly developed by China and relevant countries has kept growing in both depth and substance, and China’s economic cooperation and trade with relevant countries have deepened day by day. Since the beginning of this year, affected by various factors such as the COVID-19 epidemic, global trade and investment have generally been sluggish. The BRI countries always adhere to the principle of consultation and cooperation for shared benefits, actively strengthen cooperation, overcome difficulties and promote the stable development of trade and investment under the Belt and Road. In the first half of this year, China's investment in BRI countries achieved rapid growth, with non-financial direct investment reaching USD 8.12 billion, up 19.4% year-on-year. This is not only the result of joint efforts by enterprises of China and relevant countries in overcoming the impact of the epidemic, but also plays a positive role in restoring economic growth in countries along the route. In terms of trade, in recent years, China has made achievements in exploring diversified international markets. In the first half of the year, China's import and export to BRI countries was RMB 4.2 trillion, with a slight decrease of 0.9%, and the decrease was 2.3 percentage points lower than that of the whole. Among them, China's import and export to ASEAN was RMB 2.09 trillion, with an increase of 5.6%. ASEAN became China's largest trading partner. On one hand, BRI countries have taken effective measures to actively prevent and control the COVID-19 epidemic, providing a better external environment for relevant economic exchanges and trade. On the other hand, the growth of China's investment in BRI countries has also provided a boost to trade. The import and export of intermediate products to BRI countries was RMB 2.9 trillion, with a growth rate 1 percentage point higher than that of the whole. Their share in the total was 0.3 percentage point higher than that of the same period last year.
China will continue to adhere to the principle of consultation and cooperation for shared benefits, further strengthen economic cooperation and trade in various fields with BRI countries, and continue to encourage Chinese enterprises to deepen trade and investment cooperation with enterprises of relevant countries in accordance with prevailing international rules, so as to minimize the impact of the epidemic on trade and investment and promote the common economic development of BRI countries. Thank you!

Xinhua News Agency: China's exports have achieved positive growth for three consecutive months since April. How does the Ministry of Commerce view import and export in the second half of the year? Will there be a different focus in the next step of keeping foreign trade stable?

Gao Feng: At present, there are more unstable factors for global economic development and trade and investment, and major international organizations have lowered their forecasts of annual economic and trade growth. According to the latest data released by the WTO, from January to May this year, the import and export of 71 major economies, which accounted for over 90% of global trade, fell by 13.3%, among which the monthly decline in May reached 25.9%. The international market demand is sluggish, trade protectionism rising, and the uncertainty in external environment increasing. China's foreign trade development still faces a complex and difficult environment.
On July 29, the State Council executive meeting studied and made arrangements for further expanding opening up and keeping foreign trade and foreign investment stable. In the next step, we will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, introduce new policies and measures in a timely manner, and do our best to keep foreign trade stable. First, protect foreign trade players. We will give full play to the role of export credit insurance and help enterprises actively guard against order-related risks. We will also promote the model of "credit insurance+guarantee" to support the financing of foreign trade enterprises, provide financing and credit enhancement support for foreign trade enterprises in various ways, and further expand export credit to micro, small and medium-sized foreign trade enterprises. We will do a good job in transferring products intended for export to domestic sales, and ensure the sustainable development of enterprises. Second, offer all-dimensional support to enterprises in securing orders and expanding markets. We will explore online channels of foreign trade, support the development of new forms of businesses, such as cross-border e-commerce, overseas warehouses and integrated service providers of foreign trade, expand the pilot program of market procurement trade model, and promote the export of micro, small and medium-sized enterprises. Third, take multiple measures to keep the industrial chain and supply chain stable. We will encourage the central and western regions and the northeastern region to give full play to their advantages in the relocation of labor-intensive foreign trade industries. We will also give full play to their roles as foreign trade transformation and upgrading bases and enhance the leading role of large-scale major foreign trade enterprises. Thank you!

Shanghai Securities: New forms of service trade, with rapid growth and high value-added, have boomed in recent years. Could you give us some examples from the service trade innovation pilot programs? When will the new list of innovation pilots be published?

Gao Feng: In 2016, the State Council approved Shanghai and Hainan, among 15 places to be pilots of service trade innovation. In June 2018, the State Council approved the move to deepen the pilot programs and expand them to 17 places, including Beijing and Xiong’an. The pilot regions have explored and experimented with measures to reform the regulatory regime, enhance promotional mechanism, and create new development models. As a result, a number of new forms and new models have been fostered, and best practices that can be replicated and disseminated have been developed. We have published in three batches altogether 74 experience and best practices, among which examples of new business models abound. Examples in the first batch of experience include using big data to drive digitalization of service trade, integration of internet and service trade in Traditional Chinese Medicines, Belt and Road language service platform; the first batch of best practices include gig makers sharing, third-party medical exam and testing lab sharing, online exhibition and trade ; the second batch of best practices include new forms of business in cruise ship development, innovative online digital exhibition, accelerated smart city construction, etc.
The service trade innovation pilots have driven high-quality development of service trade across the nation. In 2019, the pilot regions accounted for 75% of service import and export of China, growing faster than the national average. Thanks to these pilots, total service import and export jumped from USD 654.2 billion in 2015 to USD 785 billion in 2019, up by 4.7% annually. In breakdown, service export grew by 6.7% annually, higher than the global average and goods export in China. Deficit in service trade has declined notably. In 2019, service export outpaced import by nine percentage points, cutting deficit by USD 35.8 billion from 2018, or 14.1%.

The State Council executive meeting yesterday studied work related to the new round of service trade innovation pilots, delivered and approved in principle the overall plan to deepen the pilot scheme. We are advancing the new round of pilot programs as planned, and will release the new list of pilots soon. Thank you.

Yicai: China and the EU held the 31st round of BIT talks from July 21st to 24th. Following several rounds of negotiations on the text and the list, how are the talks going? What is the arrangement for the following talks?

Gao Feng: China and the EU both pay high attention to BIT talks. At the 22nd China-EU Leaders Meeting on June 22nd, leaders on both sides reaffirmed their commitment to conclude the negotiations within this year and agreed to maximize the efforts to forge a consensus on rules for a level playing field.
Following the leaders’ requirements, the negotiating teams held two rounds in late June and July. At Round 31 just concluded last week, major progress was made on text issues of rules for a level playing field. This fully reflects the broad consensus between China and the EU on creating a level playing field for businesses and protecting the equal status and lawful rights and interests of foreign-invested enterprises.
Moving forward, the two sides will continue to accelerate the talks and hold consultations on outstanding text issues and market access issues with a view to meeting the target by the end of the year and delivering benefits to businesses and investors from both sides as soon as possible. Thank you.

National Business Daily: We’ve noted that recently MOFCOM worked with local governments on events promoting sales of export products in the domestic market in Chongqing, Hangzhou and Xian. Could you share the data? How enthusiastic are the exporters? How many products are rechanneled into the domestic market?

Gao Feng: To live the spirit of President Xi Jinping’s important speeches and implement the decision of the Executive Meeting of the State Council on supporting the sales of export products in the domestic market, MOFCOM co-staged with related local governments a series of promotion events in pedestrian streets, including Hangzhou Hubin Pedestrian Street, Xi’an Datang Sleepless City Pedestrian Street and Chongqing Liberation Monument Pedestrian Street.
While ensuring the ongoing response to the epidemic, the activities aimed to strengthen public services and help explore domestic markets for marketable export products through various means. First, on-site display and sales were organized to bring quality export products to consumers in the pleasant and bustling settings of national pedestrian streets. Second, on-line sales and promotion were hosted at live streaming studios at all three locations to enable cloud purchasing by buyers and consumers. Third, matchmaking sessions were arranged to connect exporters with supermarkets and e-commerce channels. Keen exporters grossly oversubscribed the booths. In the end, 300 exporters were selected to promote thousands of varieties of quality products, including home appliances, home textiles, apparel, shoes and specialty agricultural products. Sales reports suggest very good results. Most of the booths drew large crowds of avid shoppers. Some had to restock several times in the space of three days. The three-day event was extended to a week in some places to benefit more consumers.
MOFCOM will continue to take robust measures in support of more exporters exploring the domestic market for integrated development of domestic and foreign trade. Thank you.

CRI: Could you please talk about the operation of China-Europe Railway Express this year and its role in stabilizing foreign trade and investment and boosting consumption?

Gao Feng: In the first half of this year, 5,122 freight trains were opened between China and Europe, up 36% year-on-year. 461,000 TEUs were shipped, up 41% year-on-year, setting new records for four months in a row. The shipment included 3.67 million pieces of medical supplies, weighing 27,000 tons. These supplies have contributed to global pandemic response.

MOFCOM have introduced supporting policies and better arranged shipment for outbound and inbound trips. These steps aimed to foster a sound external environment for the stable operation of China-Europe Railway Express and to enhance its market awareness. China-Europe Railway Express has played an important part in stabilizing global industrial and supply chains, delivering medical supplies, supporting work resumption, and underpinning project development under the Belt and Road Initiative. Thank you.

Economic Daily: Despite the sudden outbreak of COVID-19, the Foreign investment Law (FIL) and its implementation regulations were not affected and came into force successfully. Now that they have been in force for more than half a year, how has China’s business environment improved, and what are some of the real changes for foreign-invested enterprises (FIEs)? Thank you.

Gao Feng: The FIL and its implementation regulations come into force starting this year. We have replaced all review and filing requirements for establishing and modifying FIEs in the commercial sector with a notification system, and drastically shortened the negative lists. The business environment has seen more improvements, investment is further liberalized and facilitated, and FIEs have enjoyed greater benefits. Since the coronavirus first emerged, the operations of FIEs and Chinese companies have suffered equally. Following the decisions of the CPC Central Committee and the State Council, MOFCOM established a special task force for key foreign investment projects. The special task force has worked with relevant local governments and authorities to assist FIEs and key projects. Their mandate involves major difficulties and problems throughout work resumption, such as the lack of medical supplies, raw material shortage, and entries of foreign business personnel. In the first half of this year, Paid-in foreign investment reached RMB472.18 billion, down 1.3% year-on-year, 9.5 percentage points smaller than that in the first quarter. In the second quarter, paid-in foreign investment grew by 8.4% year-on-year, representing a steady rise in foreign investors’ expectation and confidence. A recent MOFCOM survey found that 99.1% of FIEs would continue to invest and operate in China.

In the next step, we will roll out new measures to keep foreign investment stable while firmly implementing existing ones, so as to provide better services for FIEs and create a favorable,  world-class business environment that’s governed by an improved legal framework. Thank you.

Gao Feng: This is the end of today’s press conference. Thank you.

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