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                MINISTRY OF COMMERCE

                Home> News> Press Conference
                Regular Press Conference of the Ministry of Commerce (August 20, 2020)

                21st Century Business Herald: In the name of safeguarding the security of users’ personal information, US President Donald Trump has banned TikTok, the short video app developed by a Chinese company and popular among young Americans. This will force the Chinese company to divest itself of its TikTok operations in the US. What is MOFCOM’s comment on the ban? What kind of impact does the US’ tightening national security review of investment in recent years have on Chinese investment in the US?

                Gao Feng: For some time now, the US has been citing the so-called “national security” and “national emergency” as excuses to restrict or prohibit Chinese companies’ normal investment and business activities in the US and imposed transaction bans on Chinese firms on trumped-up charges. These practices have no factual or legal basis, seriously undermine enterprises’ legitimate rights and interests and go against the basic principles of market economy. They are detrimental to China, the US and the rest of the world.

                We have noted that US sanctions and clampdown will undoubtedly shake investors' confidence in investing in the States. China is resolutely opposed to using investment national security reviews as a political tool and to the generalization and abuse of security reviews. The Chinese government is firmly determined to safeguard the legitimate rights and interests of Chinese enterprises. We once again urge the US side to put an end to its wrong practices, stop its unwarranted suppression of Chinese enterprises, and do more in the interest of the trade and economic cooperation between the two countries and the well-being of the people. Thank you.

                CNBC: What are the differences in China’s utilization of American investment as compared to previous years?

                Gao Feng: As always, foreign investors including American ones are welcome to invest and operate in China and share in China's development opportunities. Since the beginning of this year, companies including Starbucks, Costco, and Tesla have launched a number of large-scale, US-funded projects in China, demonstrating the confidence of US investors and US-funded companies in the Chinese market. According to a report released by the U.S.-China Business Council on August 14, 91% of the U.S. companies surveyed said their business in China remained profitable, 83% said they viewed China as one of the most important or top five markets in the world, nearly 70% said they were optimistic about the business outlook for the Chinese market over the next five years, and 75% said they would maintain or expand their investment in China in the coming year. China proves to remain a hot spot for investors from all over the world, including the United States. Thank you.

                Bloomberg News Agency: According to a report citing a source familiar with the situation, the US and China are planning to rearrange the trade talk that was postponed last weekend. The talk aims to assess progress made in the six months after the phase one trade deal was signed. It is said that the trade talk would be held soon, though the date is yet to be determined. What’s MOFCOM’s comment?

                Gao Feng: The two sides have agreed to talk in the near future.

                Market News International: Total retail sales of consumer goods continued their downward trend in July, although many in the market had predicted that the sales would register positive growth in July. Mr. Spokesperson, what are the main factors that prevent the sales from going up?
                What new measures will be taken to expand domestic demand and boost consumption by the end of the year? To what level do you expect the total retail sales to recover?

                Gao Feng: As I said just now, total retail sales of consumer goods stood at 3.22 trillion yuan in July, down by 1.1% year on year, with the margin of decline 0.7 percentage point lower than that of the previous month. The margin of decline has been narrowed for five months in a row, by 19.4 percentage points in cumulative terms. The consumer market is seeing a sustained upward trend. Total retail sales of goods nationwide in the first seven months of this year reached 2.9 trillion yuan, up by 0.2% year on year, registering positive growth for the first time this year. Online consumption is growing rapidly. Total retail sales online in the first seven months of this year amounted to 6.08 trillion yuan, up by 9% year on year.

                At the same time, we have noted that the impact of COVID-19 is still lingering on consumption. Consumption in such services sectors as catering and accommodation is recovering, but not as much as that in goods retail. Catering revenue in July fell 11% year on year. Consumption of non-essentials such as textile and clothing, furniture and home appliances has not yet recovered to the pre-COVID level.

                On the whole, China's consumer market is resilient and promising, with a solid foundation for sustained recovery and growth. As China better prevents and controls the COVID-19 pandemic, gradually gets back to normal in daily life and work, further implements policy measures to provide assistance to enterprises to stabilize employment, tide enterprises over, reduce their burden, and stabilize consumption, it will further unleash its consumption potential, upgrade consumer spending and its consumer market is expected to see a sustained steady rebound.

                Going forward, on top of the efforts to implement policy measures that have already been introduced to boost consumer spending, MOFCOM will give bigger play to policies and build platforms to boost consumption. From September 9 to October 8, we will organize a nationwide consumption boost event called “Consumption Boost by Ten Thousand Enterprises in A Hundred Cities”. In addition, we will also step up efforts to take stock and promote the wider use of localities’ successful practices to boost consumption and give full play to the role of examples and pacesetters. Thank you.

                AFP: Customs statistics show that China’s rare earth export fell by 70% year-on-year in July. What is the cause of that? Was it due to the impact of the pandemic on supply chains? Since the US relies on rare earth from China, is the falling export a countermeasure against the US?

                Gao Feng: According to China Customs, China exported 22,800 tons of rare earth in the first seven months this year, down by 20.2%. That was equivalent to 211 million dollars in value, down by 26%. The industries cited the covid-19 pandemic as a factor for the slowing production and operation of the downstream businesses. Chinese companies carry out international trade in light of market dynamics and risks around the world. Thank you.

                Hong Kong Commercial Daily: Some business leaders said recently that the era of China being the world’s factory has come to an end. What’s your comment on that?

                Gao Feng: As a manufacturing powerhouse, China has been the world’ s largest exporter of goods for 11 years in a row. China has a full-fledged industrial system, making it the only country with all the industry categories by UN standard. China’s manufacturing industry has been deeply integrated with global supply chains and industrial chains. In face of the sudden outbreak of COVID-19, the CPC central committee and the State Council has demonstrated strong leadership and adopted a range of timely measures to stabilize foreign trade and foreign investment while making sure the virus is in check. Businesses of all types, including FIEs, have all made strenuous efforts. China’s manufacturing sector has stood the test of times, and China has contributed to the stability and security of global industrial chains and supply chains with real actions.

                In recent years, some businesses have reconfigured their global footprint for the sake of factor cost and other reasons, which is perfectly normal in a market economy. FDI statistics this year has shown that China remains a popular destination for global investors, with its rich pool of skilled workforce, full-fledged industries, well-developed infrastructure, and an enormous market of 1.4 billion people. The comprehensive edges that manufacturing industries enjoy have not changed. The long-term trend of sound and steady economic development has not changed. As China scores strategic progress in epidemic containment, it is working to implement policy measures at a faster pace. China will continue to pursue high-standard opening-up, improve business environment, and contribute its fair share to maintaining stability of global supply chains and industrial chains. We believe China’s position in the global manufacturing industry will remain as strong as ever. Thank you.

                Nikkei: It is reported that some countries have banned the export of wheat, soybean, and other crops because of the COVID-19 pandemic. Could you brief us on China’s import of wheat and soybean?

                Gao Feng: Customs statistics show that China imported 4.28 million tons of wheat worth 1.22 billion dollars in the first seven months this year, up by 116.3% and 108.9%. Over the years, imported wheat accounted for 2-3% of wheat consumption in China. The import mainly aimed to enrich consumer choices and was mainly premium and special-purpose wheat. This year wheat import has surged due to rising demand for high-quality wheat.

                China imported 55.13 million tons of soybeans worth 21.4 billion dollars in the first seven months of this year, up by 17.7% and 13.3%. Soybean import plays an important role in ensuring the supply of cooking oil and protein animal feeds on the domestic market. Thank you.

                China Media Group CRI: August 22nd marks the 7th anniversary of the establishment of Shanghai Pilot Free Trade Zone since it was approved by the State Council in August 2013. What progress has Shanghai PFTZ made? What plans do PFTZs have to stabilize foreign trade and foreign investment?

                Gao Feng: Shanghai PFTZ, the first of its kind, is tasked with the important mission to explore paths and accumulate best practices in deepening reforms on all fronts and open up further. Since it was launched in September 2013, Shanghai PFTZ has acted upon the decisions and plans of the CPC Central Committee and the State Council, made the strategy to serve the whole nation and open to the world and build Shanghai into an economy, finance, trade and shipping center. Three versions of master plans have been implemented, and the Lingang new section was added to it last year. This shows that the depth, breadth, and intensity of experiments in the PFTZ have been constantly strengthened.

                Over the past seven years, Shanghai Pilot Free Trade Zone has piloted trade and investment liberalization and facilitation, government function transformation, financial liberalization and innovation and strengthened mid- and post-event regulation around the central task of institutional innovation, forging a batch of major institutional innovation outcomes and contributing Shanghai experience to the rest of the country. Of the 260 outcomes rolled out by MOFCOM nationwide or in specific regions, 124 were created or co-created by Shanghai FTZ. The administration model of pre-establishment national treatment plus negative list, single window for international trade, license and certificate separation reform and free trade account, among others, have become its famous calling cards. As of the end of Jun. 2020, it was home to a total of 12,000 newly registered foreign-invested enterprises, which accounted for 77% of the total of Pudong New District, with USD 37.1 billion in paid-in capital and continuous growth in total imports and exports that make up over 40% of Shanghai’s foreign trade.

                In the first half of the year, pilot FTZs played a key role in stabilizing foreign trade and investment. The total imports and exports of the 18 pilot FTZs reached RMB 2.2 trillion, or 15.6% of the national total. At RMB 80.78 billion, their actual use of FDI accounted for 17.1% of the national total. Moving forward, MOFCOM will continue to implement the decisions and plans of the CPC Central and the State Council and work with related local authorities and departments to advance the quality development of free trade ports and zones. First, pilot FTZs will be given greater autonomy for reform and opening up to promote expanded open-up and innovative development. Second, differential exploration will be deepened to foster more targeted, effective and integrated institutional innovation outcomes. Third, institutional innovation outcomes will continually be rolled out nationwide or in specific areas to continuously free up the institutional dividends of deepened reform and expanded open-up and further optimize China’s business environment. Fourth, efforts will be intensified to publish a negative list for cross-border trade in services and to flesh out measures for trade and investment liberalization and facilitation for Hainan free trade port. Surely the pilot FTZs will make new contributions to the stability of foreign trade and investment fundamentals and the development of new institutions for an open economy of a higher level. Thank you.

                Yicai: An RCEP TNC meeting was held on Aug. 7th, where the participants reaffirmed the consensus to sign the agreement in 2020 as scheduled and the willingness to work out outstanding issues as per the instructions of the RCEP Ministerial Meeting on Jun. 23rd, 2020. What are the thorny issues facing RCEP? Can the agreement be signed this year as scheduled?

                Gao Feng: At present, RCEP participants are keeping up the positive momentum in consultation to accelerate the resolution of outstanding issues following the roadmap laid out by the Jun. 23rd
                Ministerial Meeting while stepping up the legal scrubbing of the schedules of commitments. Work on all fronts is proceeding in an orderly way. Next week, RCEP will call another Ministerial Meeting under the chairmanship of Vietnam, the ASEAN Chair. China will continue to support ASEAN centrality and work with others towards signing the agreement this year as scheduled. Thank you.

                Gao Feng: This concludes today’s press conference. Thank you.

                (All information published in this website is authentic in Chinese. English is provided for reference only. )

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