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Regualr Press Conference of the Ministry of Commerce on October 17, 2013

Dear friends from the Press,

Good morning. Welcome to the Press Conferencetoday. I am going to make a briefing on China鈥檚 commercial performance in the first nine months of 2013, and answer your questions.

I. Commercial performance in domestic market

Consumer market kept a steady upward trend from the beginning of 2013. The main features of consumer market in the first three quarters are as follows:

1. Sales by large and medium circulation enterprises remained steady. From January to September, retail sales of 3,000 key enterprises monitored by MOFCOM rose by8.9% year-on-year, 0.7 percentage points higher as compared with the same period of last year, the same with that of January to August, and that of September up to 9.2%.

2. Housing consumption grew fast. Driven by the accelerating building of government subsidized housing and the increasing volume of business of real estate, the growth of housing consumption was obviouslyaccelerated. From January to September, in the 3,000 key enterprises monitored by MOFCOM, sales of household appliances, furniture, and construction materials grew by 10.4%, 6.5%, and 5.3% respectively, 12, 4, and 1.4 percentage points higher than that of the same period of last year, and in September, the growth rate was 10.1%, 13.1% and 9.8% respectively.

3. Consumer demands for automobile, communication and maintenance of value slowed down. In the 3,000 key enterprises monitored by MOFCOM, sales of automobiles in January to September grew by2.1%, 4.3 percentage points slower than the same period of last year, and sales in July, August and September grew by 6.0%, 6.2% and 8.0% respectively, picking up a little; sales of communication equipmentin January to September grew by 4.7%, 6 percentage points slower than that of the same period of last year, but the growth rate in September rose after a fall, which is 9.2%; sales of gold, silver and jewelry in January to September grew by 25.8%, 14.4 percentage points higher than that of the same period of last year. But with the swing and fall of the price of gold, consumption of gold, silver and jewelry in September was weaken, and the growth rate, 15.8%, was 2.7 percentage points slower than that of August.

4. Online consumption kept a fast growth. In January to September, Online consumption of 3,000 key enterprises monitored by MOFCOM rose by 34.7% year-on-year. It is estimated that the total online retail sales in the first three quarters will reached 1.3 trillion RMB, the same as that of the whole year of 2012. Sales of Department Stores, supermarkets and Pro-shops respectively grew by 11.1%, 8.4% and 6.9%.

5. Consumer prices remained stable. Consumer price in January to September was up by 2.5%, 0.1 percentage points higher than that of the first half year of 2013. Consumer price in September was up by 3.1% year-on-year, among which price of foodstuff was up by 6.1%. According to monitoring by MOFCOM in 36 medium and large sized cities in January to September, price of agro-foodstuff was up by 4.9%, 0.5 percentage points slower than that of the same period of last year. But that of September was up by 6.5%, the highest in the recent 16 months, up by 1.5% than that of last month, of which prices of beef and mutton continued togrow, rose by 28.8% and 16.4% respectively year-on-year in January to September;prices of pork slightly fell at the end of the third quarter, and price of porke in January to September was down by 2.4% year-on-year; price of eggs was fell in the end of the third quarter, and that of January to September was up by 7.4% year-on-year.

There are 3 features or three 1/3, of foreign trade in the first three quarters: the first one is that, trade with Japan and EU accounted for 1/3 of the whole import and export; the second one refers to that the proportion of processing trade in the whole import and export was lower than 1/3, only 32.3%; the third one mentioned that, the import and export of private enterprises took up 1/3 of the whole import and export.
II. Foreign Trade

According to Customs statistics, our total import and export in the first three quarters of 2013 were 19.07 trillion Yuan (US$3.06 trillion), up by 7.7% year-on-year, exchange rate fluctuation excluded (same as below). Among that, exports amounted to10.06 trillion Yuan (US$1.61trillion), up by 8%; and imports amounted to9.01 trillion Yuan (US$1.45trillion), up by 7.3%. Trade surplus was1.05 trillion Yuan (US$16.94 billion) with an increase of 14.4%. The main features of foreign trade in the first three quarters are as follows:

1. Trade with U.S. and ASEAN was steadily up. China-U.S. trade in the first three quarters rose 6.7%, and China-ASEAN trade was up by 11.6%. Trade with EU and Japan take a turn for the better. China-EU trade dropped 0.8%, among that trade in the third quarter up by 3.5% year-on-year, and China-Japan trade dropped 7.9%, among that, trade in the third quarter drop by 5.3% year-on-year.

2. Export and import by eastern China steadily grew, and middle and western China was active in export. In the first three quarters, the total volume of export and import in eastern China amounted to US$2.58209 trillion, up by 7.1%, taking up 84.4% of the total volume in the whole country. For export, in the first three quarters, the growth rates of exports of He Nan, Jiang Xi, Hu Bei and Xin Jiang was 19.3%, 18.3%, 17.9%and 14.7%respectively, significantly beyond the overall growth rate.

3. Growth of conventional trade was steady and processing trade slowed down. In the first three quarters, import and export by general trade was US$1.6162 trillion, up by 7.8%, accounting for 52.8% of the total volume of export and import. In the same period, import and export by processing trade was US$989.43 billion, with an increase of 0.7%, taking up 32.3%.

4. Exports of mechanic and electronic products steadily grew, and exports of labor-intensive products enjoyed good momentum. In the first three quarters, our exports of mechanic and electronic products registered US$922.99 billion, up by 8%, accounting for 57.2% of China's total exports over the same period. Export of high-tech products was US$480.49 billion, up by 13.3%. Over the same period, Total export of clothing, textiles, footwear, furniture, plastic products, bags and suitcases and toys was US$338.05 billion and rose by 10.4%, 2.4
percentage points higher than the overall growth rate over the same period.

5. Import major energy and resource products increased. Among that, import volumes of iron ores, product oil, plastics of primary forms and beans were 600 million tons, 30.46 million tons and 18.11 million tons, and 45.75 million tons, respectively growing by 9%, 5.2% , 2.4% and 3.3% year-on-year; import volumes of steel were 10.48million tons, down by 0.4%. Besides, import volumes of mechanic and electronic products and high-tech products were US$625.28 billion and US$417.24 billion respectively, up by 8.7% and 14.1% respectively.

There are 3 features or three 1/3, of foreign trade in the first three quarters: the first one is that, trade with Japan and EU accounted for 1/3 of the whole import and export; the second one refers to that the proportion of processing trade in the whole import and export was lower than 1/3, only 32.3%; the third one mentioned that, the import and export of private enterprises took up 1/3 of the whole import and export.
III. Foreign investment in China

From January to September of 2013, 16,351 foreign-invested enterprises were newly approved, down by 9.29% year on year; realized FDI reached US$88.6 billion, up by 6.22% year on year. In September, realized FDI amounted to US$8.84 billion, up by 4.88% year on year (excluding data of banking, securities and insurance). The main features of foreign investment in January-September are as follows:

1. Realized FDI in service sector kept rising. From January to September, realized FDI in service sector registered US$44.7 billion, up by 13.28% year on year, accounting for 50.5% of the national total; gas production and supply, railway/road/tunnel and bridge construction, culture/sports and entertainment all saw a rapid growth, up by 112.1%, 696.71% and 117.76% respectively. Realized FDI in sectors of agriculture, forestry, animal husbandry, and fishery reached US$1.215 billion, down by 2.42% year on year, accounting for 1.37% of the national total. Realized FDI in manufacturing sector was US$35.5 billion, down by 3.96% year on year, accounting for 40%; among that, realized FDI in crude oil processing, coking and nuclear fuel processing, aquatic product processing, architectural ceramics and synthetic material grew rapidly, up by 110.95%, 89.81%, 38.92% and 33.37% year on year respectively.

2. FDI by ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea), EU and UAS grew fast. From January to September, realized FDI from ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea) amounted to US$76.292 billion, up by 7.47% year on year; among that, realized FDI from Hong Kong reached US$57.895 billion, up by 11.16% year on year; that from South Korea, US$2.437 billion, up by 11.84% year on year; that from Japan, US$5.937 billion, up by 5.62% year on year; that from Thailand, US$476 million, up by 510.07%. Realized FDI from USA amounted to US$2.876 billion, up by 21.3% year on year. Realized FDI from 28 E.U. countries reached US$5.94 billion, up by 23% year on year; among that, realized FDI from Germany registered US$1.846 billion, up by 54.88% year on year; realized FDI from France registered US$673 million, up by 8.51% year on year.

3. FDI Growth in central and Western China exceeded that in eastern China. Realized FDI in Eastern China was US$ 74.2 billion in January-September, up by 5.63% year on year; realized FDI in Central China was US$ 7.84 billion, up by 12.29% year on year; and realized FDI in Western China was US$ 6.6 billion, up by 6.07% year on year. The realized FDI of Eastern China, Central China and Western China accounted for 83.71%, 8.85% and 7.44% of the national total respectively.

IV. Investment and economic cooperation overseas

Direct investment overseas. From January to September 2013, Chinese investors made direct investment in 3,890 overseas companies in 156 countries and regions, and total direct investment in non-financial sectors (similarly hereinafter) reached US$61.64 billion, up by 17.4% year on year.

From January to September, investments from mainland China in seven economies of Hong Kong, ASEAN, EU, Australia, US, Russia and Japan reached US$42.47 billion, taking up 68.9% of the total overseas direct investments over the same period of time, up by 3.2% year on year. Chinese investment in Hong Kong and Japan fell by 11.7% and 45.5% respectively; while investments in US, EU, Australia, ASEAN and Russia soared by 250%, 108.1%, 83.6%, 26.4% and 22.2% respectively.

From January to September, direct investments overseas by enterprises of local Chinese governments reached US$21.04 billion, up by 20.7% year on year, taking up 34.1% of the total over the same period, 3.3 percentage points higher than that of the national total, and the top 3 are Guangdong, Shandong and Jiangsu.

About 90% of the investment flew to commercial service industry, mining industry, wholesale and retail industry, construction industry and manufacturing industry. In the first three quarters, investment in commercial service industry reached US$20.08 billion, down by 30% year on year while investment in other industries maintained robust growth. Among that, investments in mining industry錛寃holesale and retail industry and construction industry registered US$16.51 billion, US$9.21 billion and US$4.42 billion respectively, up by 111.9%, 58% and 474% respectively; that in real estate industry, transportation, storage and postal industry and scientific research and technical service industry reached US$1.43 billion, US$1.15 billion and US$1.03 billion, up by 83.3%, 8.5% and 139.5% respectively; Investment in manufacturing industry maintained a continuous growth and saw a year-on-year growth of 7.6%.

Contracted projects overseas. In the first three quarters, the turnover of contracted projects by China overseas amounted to US$ 85.96 billion, up by 13.1% year on year, and value of newly-signed contracts was US$ 113.62 billion, up by 21.6% year on year. The projects each with a contract value above US$50 million were 441 (348in the same period of 2012), with a total value of US$ 90.48 billion, accounting for 79.6% of the total value of newly-signed contracts. Among that, the projects each with a contract value above US$100 million were 262, an increase of 61 over the same period of 2012.
By the end of September 2013, the total value of contracted projects by China overseas reached US$1.1118 trillion with the realized turnover of US$ 741.6 billion.

Labor service cooperation overseas. In the first three quarters of 2013, labor service personnel dispatched overseas reached 340 thousand, an increase of 27 thousand over the same period of 2012. Among that, labors sent abroad for contracted projects were 193 thousand and that for labor cooperation projects were 147 thousand. By the end of September, all labors sent overseas totaled 895 thousand, an increase of 30 thousand over the same period of 2012. Labor service personnel overseas by the end of September 2013 were 6,730 thousand.

V. Service Outsourcing

According to statistics by Department of Service Trade and Commercial Services of MOFCOM, In January-September 2013, the contracts on service outsourcing totaled111, 404, with the contract value of US$58.09 billion, up by 41.0% year-on-year; value of contract executed reached US$ 41.29 billion, up by 34.6% year-on-year. Of which the total value of contracts with clients overseas reached US$ 40.63 billion, up by 42.3%year-on-year; realized value amounted to US$ 29.05 billion, up by 37.2% year-on-year.

Realized value of contracts in KPO grew rapidly. From January to September, realized value of contracts in information technology outsourcing(ITO), business process outsourcing (BPO) and knowledge process outsourcing (KPO) were US$ 15.8 billion, US$ 4.02 billion and US$ 9.23 billion respectively, up by30.7%, 27.3% and 55.6% respectively.

Major markets of service outsourcing were US, EU, Japan and Hong Kong. From January to September, realized contract value in service outsourcing from US, EU, Japan and Hong Kong were US$ 6.90 billion, US$ 4.45 billion, US$ 3.68 billion and US$ 3.53 billion, accounting for 23.7%, 15.3%, 12.7% and 12.1%respectively in the total realized contract value.

Jobsin service outsourcing steadily increased. From January to September, newly increased employees in service outsourcing industry reached650 thousand. By the end of September 2013, enterprises in service outsourcing totaled 23,523, with 4,946 thousand employees, including 3,322 thousand undergraduates and graduates from college, accounting for 67.2% of the total.(2013-10-17 10:41:14)

VI. Major Functions on Trade and Economy

The fourth China-EU High-Level Economic and Trade Dialogue will be held in Brussels, Belgium on October 24. There will be three topics in the Dialogue including economic development, industrial policy and trade and investment. China-EU High-Level Economic and Trade Dialogue, established during the 10th EU-China Summit at the end of November 2007at EU request , is the highest level dialogue mechanism between China and EU in the area of economy and trade.

The Fourth Ministerial Conference of the Forum on Trade and Economic Cooperation between China and Portuguese-speaking Countries will be held in Macao on November 5-6. 2013.This year marks the 10th anniversary of the Forum. Over the past 10 years, China and the Portuguese-speaking countries have carried out cooperation in such areas as trade, investment, agriculture, human resources, tourism, medicine and health and culture in accordance with the Trade and Economic Cooperation Action Plan, and have continuously made new achievements. A series of activities including the Opening Ceremony of the Ministerial Conference, the Ministerial Conference and China-Portugal Entrepreneurs Conference and the Matchmaking of China-Portugal Cooperation and Development Fund Program will be held in this session of Ministerial Conference with the theme of 鈥淣ew Start and New Opportunities".

The Third Session of China-Brazil Senior Coordination and Cooperation Committee (China-Brazil Senior Committee) will be held in Guangzhou on November 6. A working symposium and a plenary meeting will be held, focusing on issues in such areas as politics, economy, technology and culture, and Chairmen of the two parties will sign the minutes of talks and witness the signing of of paers on cooperation. China-Brazil Senior Committee was established in May 2004, with the aim of guiding and coordinating the healthy development of bilateral relations.

The Second Session of China-Pacific Island Countries Economic Development Cooperation Forum will be held in Guangzhou on November 8, which is the highest level of dialogue mechanism in the area of trade and economy between China and Pacific Island Countries, and is an important platform to forge close economic ties and promote common development between the two parties. The theme of the forum is "Green and Innovation, Cooperation and Win-win", and main activities will include the opening ceremony, the ministerial conference, seminars on trade and investment, agricultural and fishery cooperation, tourism and environmental protection cooperation, photo exhibitions on China and Pacific Island Countries Economic Cooperation and Green Development, import and export fair of the Pacific Islands Countries and fair for bilateral trade and investment.

The Third Session of China International Green Innovative Products & Technologies Show (the 鈥淕reen Innovative Show") will be held concurrently in Guangzhou on November 8-11 to show China鈥檚 willingness of strengthening cooperation with the Pacific Island Countries in environmental protection, and promote the sustainable economic and social development of the Pacific Island Countries. The theme of the Green Innovative Show is 鈥淕reen Innovation, Cyclic Development and Low-carbon Development", with the aim of promoting energy conservation and remission reduction, expanding import and export of products and technologies in environmental protection, promoting international cooperation and exchanges in green and low-carbon development, and coping with global climate changes, so as to show an image of a responsible country.

MOFCOM and the Shanghai Municipal People's Government will jointly sponsor the Second Session of China International Petroleum Trade Conference in Shanghai on November 21. The conference, with the theme of "Impact of the Energy Revolution to Trade Patterns of Oil and Gas", will invite representatives from world's leading multinational oil companies and national oil companies, oil trading companies and enterprises in financing, transportation and insurance of oil and gas, energy research and advisory organizations and relevant government agencies to exchange views on such issues of common concerns in overall, strategic and hot issues in global trade of oil and gas.

China Daily: Will the goal of China鈥檚 foreign trade set at the beginning of 2013 be realized? Considering the base figure of December 2012, which was the highest in the whole year, the sustained appreciation of the RMB and unstable external demand, what is your take on China鈥檚 foreign trade in the fourth quarter? (2013-10-17 10:57:30)

Shen Danyang: In general, trade growth in the third quarter improved significantly compared with that of the first half of 2013, and there will be a steady growth in the fourth quarter. Of course, we are acutely aware that the current international economic situation for China鈥檚 foreign trade development is still complicated. Although markets of developed countries including US, EU and Japan have further recovered, economic growth in emerging economies has suffered reduced increase markedly, along with widespread capital outflows, currency devaluation, inflation and economic slowdown. The IMF and the World Bank have lowered global economic growth projections for 2013 recently. Under such circumstances, China鈥檚 export growth to emerging markets fell significantly recently, especially in September, while it's foreign trade continues to face severe challenges in terms of weak demand from emerging markets in the coming months. At the same time, enterprises continued to face such difficulties as rising overall costs as a result of RMB appreciation and rising labor costs. Statistics released by MOFCOM on over 1,900 key foreign trade enterprises show that increase in export orders has slowed down recently after a brief rebound in the previous period. Export orders to emerging economies suffered major fluctuations. In addition, business confidence has also been fluctuating.

While the above-mentioned information shows you the grim side of the picture, China has, nevertheless, promulgated a series of policies and measures to promote foreign trade development in July, as a result of which trade facilitation has been improved, and the pressure of rising costs in foreign trade alleviated. This has injected new impetus to foreign trade development. We have also issued documents to promote cross-border e-commerce recently. Some comprehensive services and support policies for foreign trade enterprises will also be released soon with a view to contributing to the development of foreign trade.

According to a recent business survey conducted by the Ministry of Commerce and General Administration of Customs, a slight increase in the country鈥檚 export is expected for next two to three months. At the same time, domestic economic recovery will continue to boost import growth significantly, while the significant import growth momentum in September will sustain in the coming months. Imports of iron ore reached 74.58 million tons in September, hitting a record high, and are expected to continue to grow in the future. Of course, not only iron ore, as I just as briefed you, imports of a number of commodities also grew rapidly in September. We have confidence that with hard efforts the goal of steady development and transformation and upgrading of foreign trade will be realized. Thank you. (2013-10-17 10:57:57)

Hong Kong Cable TV: The growth margin of consumption in the first three quarters of the year was less than that in the previous years. How do you foresee the situation for whole year? Recently, experts say that domestic consumption concentrated in the Golden Week of the National Day, which is not conducive to promoting tourism consumption in the course of the whole year, what鈥檚 your comment on it? It is also said that trade and manufacturing were also affected by the Golden Week, and suggested to cancel it. What is MOFCOM鈥檚 view on this issue? (2013-10-17 11:09:15)

Shen Danyang: We should not talk about the Golden Week only from the perspective of consumption. Let alone the question whether consumption is transferred to the Golden Week from the rest of the year, I believe that few people would agree to abolish the Golden Week simply based on the argument that it was established to promote consumption. Although it is not MOFCOM鈥檚 responsibility to establish the Golden Week, we have to analyze carefully whether the seven-day National Day contributes to consumption. Since the implementation of the Golden Week over the past years, it has indeed played a very important role in contributing to consumption growth.

Let鈥檚 go back to social consumption. According to our analysis, despite such factors as slower income growth, lack of direct stimulus policies and decline in high-end and group consumption, there are many favorable factors for consumption in 2013. Consumption in the year will grow at a slower pace at first, and then increase, and grow faster. The current consumption growth is normal and healthy.

There are three factors contributing to consumption growth in the fourth quarter:

First, currently, early economic indicators including the PMI, electricity consumption and freight volume are positive, while macro-environment has further improved. This has further boosted the consumer market. For example, according to statistics by China Association of Automobile Manufacturers, domestic car sales reached 1.9358 million in September 2013, up by 17.4% month-on-month and about 20% year-on-year, of which passenger car sales were 1.6 million, up by over 21% year-on-year.

Second, new consumption hot spots and patterns including consumptions of new products and new life services, cyber and holiday consumption are taking shape. According to MOFCOM鈥檚 monitor of 3,000 key retailers, in September, sales of food, communications equipment and garments rose by 11.3%, 9.2% and 8.7% year-on-year respectively, 0.6 percentage points, 3.7 percentage points and 0.3 percentage points higher than those of the previous year respectively. Online sales saw the fastest growth of 26.5%; and sales by department stores, supermarkets and specialty stores rose by 10.2%, 9%, 8.4% respectively.

Third, a series of policies and measures promulgated by the government to promote information consumption, agedness consumption, healthy consumption and tourism and leisure consumption are gradually paying off, and will further provide a sound policy environment to expand consumption.

Therefore, we believe that as long as domestic economy remains stable, and the policies to promote consumption could be pushed forward smoothly, consumption in the fourth quarter is likely to keep rising, and the consumer market in 2013 will maintain a steady growth. (2013-10-17 11:09:56)

International Business Daily: I have two questions. The first question, is China making efforts to join the negotiations on the Trade in Services Agreement (TISA) initiated by US with a promised value of USD 4 trillion? The second question is on whether the negotiation between China and the U.S. on the reduction of tariffs for a series of electronic goods is likely to restart? Could you brief about it if it is true? (2013-10-17 11:11:07)

Shen Danyang: The US$ 4 trillion deal you referred to should be the TISA negotiations currently joined by 23 WTO members. This negotiation officially started in March 2013, with the goal of developing new rules of international services trade and promoting further liberalization of global trade in services. So far four rounds of negotiations have elapsed. The Chinese government officially announced to join the negotiations on September 30 2013. China will adhere to the principles of openness and equality in the negotiations, and will work with all parties to take negotiations forward and promote multilateralism ultimately, so as to inject more vitality into the multilateral trade negotiations. China has become the third largest country in global services trade, and is fully aware of the important role the services sector and services trade play in economic growth and social development. We will continue to develop the domestic services sector and expand opening up to build a fair and competitive market environment, so as to promote the sustainable development of domestic economy.

The second question is about Information Technology Agreement, namely ITA expansion negotiations. It is regretful that the negotiations were suspended in July. Recently, we have connected with main participant parties, and made consensus to take the negotiations forward. The next round of negotiations will be held soon, perhaps in late October. China will send a team to attend it. The ITA expansion talks involve more than 20 participant parties and over 40 WTO members, and China is just one of them. The realization of final agreements depends on the sincerity and efforts of all the participating parties. We have noticed that, all the parties hope that the new round of negotiation could be concluded before the 9th Ministerial Conference of the WTO in December, and so does China. Therefore, all the parties should grasp the opportunity, lower their own ambitions, and make common efforts to realize the same goal. Thank you.

News Center of CCTV: The negative list of Shanghai Pilot Free Trade Zone has 190 administrative measures in total, involving 89 large categories, 419 medium categories and 1069 small categories. The degree of liberalization is considered to be lower than expectation and lacks appeal. What鈥檚 MOFCOM鈥檚 response to it? Will the categories involved on the negative list be narrowed down in the future? Thank you.

Shen Danyang: The Negative List of Special Administrative Measures for Foreign Investment Access of China (Shanghai) Pilot Free Trade Zone, formulated and issued by the People鈥檚 Government of Shanghai Municipality, is compiled according to the categories of National Industries Categories and Code. As one of the main basis for Shanghai FTZ carrying out management reform of foreign investment access, the negative list covers the special administrative measures of foreign investment access in all the categories (large, medium, and small) of national industries. We can see from the list that most of the fields involving national economic industries are fully open to foreign investment. Fields which the Pilot Zone chose to expand liberalization in include financial service, shipping service, commerce and trade, professional service, cultural service and social service. Except the enlisted services, such as banking industry and information communication, access restrictions on those liberalized fields, such as qualification requirements for investors, restrictions on shareholding, and business scope are suspended or canceled. The negative list will be timely adjusted according to the laws and regulations of foreign investment and the development of the Pilot FTZ. We can say that the degree of liberalization is unprecedentedly high.

Carrying out negative list administration in China (Shanghai) Pilot FTZ is of great significance for China鈥檚 administration mechanism of foreign investment. Therefore, as the mass media and experts has commented, what the negative has listed is not only the catalog of investment fields that cannot automatically access, but also a leap in thought of liberalization.

In the future, MOFCOM will evaluate the actual effects of this administration model, explore a pathway and accumulate experience for formulating the three regulations on foreign investment and establishing foreign investment access and supervision system, which not only comply with international practice, but also consistent with China鈥檚 own conditions. We welcome domestic and foreign investors to actively take part in the development of the Pilot FTZ, give us feedback on the operation of the Pilot Zone and help us evaluate the effect. Thank you for your question.

MASTV: In November, China-Portuguese Economic and Trade Cooperation Forum will be held in Macau, and the theme of the forum this year is 鈥淣ew Start, New Opportunity鈥 Could you interpret to us the meaning of 鈥淣ew鈥here, and what kind of opportunity is new? Secondly, in November, leaders of China and Brazil will meet in Macau and Guangzhou respectively. As emerging economies, what cooperation do China and Brazil expect to realize through the two meetings? Thank you.

Shen Danyang: This question is very good, but I can鈥檛 give you the answer, because we will hold special press conferences on these two activities separately. The contents of China-Portuguese Forum will be released together with Macau, so it鈥檚 not appropriate for me to release it alone. As regards the deliverables of the China-Brazil High-level Coordination and Cooperation Committee, we will announce it after the meetings. Thank you.

TVB: On Shanghai FTZ, some experts often stress that it has no negative impact on Hong Kong. We want to know specifically what kind of cooperation Hong Kong and Shanghai FTZ will have and what kind of role Hong Kong plays in it. The decline of Mainland鈥檚 investment to Hong Kong in January to September is enlarger than that of January to August, will the decline continue expand?

Shen Danyang: Whether the establishment of the Shanghai FTZ will have an impact on Hong Kong is of interest to everyone, especially to the Hong Kong press. In our view, by drawing upon customary international practice, the China (Shanghai) Pilot FTZ is a major step of more proactive opening up in response to new trends in global economic and trade development. We believe it will promote the prosperity and stability of Hong Kong and its development in sync with the Mainland. As many experts have argued in support of this view, I will not repeat.

On your second question. As Chinese companies pick up pace in 鈥済oing global鈥and international expansion, more and more of them now invest directly in the host country. They used to invest via Hong Kong. Now with the relaxation in foreign investment policies including the currency control, many companies invest in a foreign country directly. This is a new change, which does not mean a decrease in investment in Hong Kong proper but a reduction of such entrepot investment. I believe with the implementation of CEPA and other agreements and as the commercial ties between Mainland and Hong Kong get even closer, the real investment from Mainland companies in Hong Kong will continue to rise.

Beijing News: MOFCOM recently released the draft administrative measures for the bath industry, which has caused much debate. Some provisions, for example, the one that requires bathhouses to put up a sign that bans people with AIDS from entering, have been questioned for their rationality and operability. How does MOFCOM respond to it? Thank you.

Shen Danyang: According to Rules on Regulation Formulation Procedures, the Administrative Measures for the Bath Industry (Draft) has been released on the websites of www. fazhixinxi. com and www., seeking public comments. We have noticed the comments and suggestions on certain provisions from the public especially some internet users. MOFCOM welcomes various views and suggestions, especially those critical and constructive ones. In response, we will organize a team of experts to study if these provisions are legal, scientific and reasonable, on the basis of which we will modify and revise the Measures. This is exactly the intention of seeking public comments. Thank you.

Shanghai Securities News: On the attraction of FDI. We notice that China鈥檚 FDI inflow was relatively stable in September. Please make a prediction on foreign investment inflow in the coming two to three months. We also notice in a report released by the US-China Business Council, US companies say that they are facing a raft of challenges in China, including rising cost and competition with local Chinese companies. The report indicates American companies鈥interest in investing in China is dwindling. Can you comment on that?

Shen Danyang: There are still many uncertain and destabilizing factors in global economic recovery and China also faces multiple challenges in the sustained and stable economic development. But we believe China still has comprehensive advantages in attracting foreign investment and foreign investors remain confident in the Chinese economy. This is a general answer to your question on the annual survey released by relevant bodies.

I have also read assessments on China鈥檚 foreign investment environment in some other reports. For example, the 2013 Foreign Direct Investment Confidence Index released by A.T.Kearney shows that the Chinese market remains very attractive because of its large population, continuously rising income and accelerated urbanization. A survey recently released by BCG, a world-renowned consulting group also indicates that 83% of multinational companies consider China as a major market and the most important emerging market to multinationals despite a slowdown in the economy.

Meanwhile, we have noticed that the Annual Report on China鈥檚 Business Environment released by the U.S.-China Business Council shows that the optimism of responding companies in China has been affected by rising cost but their confidence in the Chinese market as a whole remains unaffected and that over 90% of respondents say their operation in China is profitable.

The new government of China has put emphasis on stabilizing macroeconomic policies, releasing the dividends of reform and improving the business environment for companies. A host of investment facilitating measures have been adopted since this year. For example, a number of items subject to investment approval have been canceled or delegated to local authorities; the payment of registered capital has changed from full payment upon formation of a company to payment in installments; commercial registration procedures such as that with industry and commerce authorities have been streamlined. All these measures are favorable to foreign investors in China. Currently, MOFCOM is studying to further overhaul the foreign investment administration regime and will strive to create a fair, just, standardized and transparent environment for various market players including foreign invested enterprises.

As for inward investment, China鈥檚 FDI has gone up steadily since this year. Since February, China鈥檚 FDI has maintained positive growth month on month and saw a year-on-year growth of 6.22% from January to September. The FDI for the whole year is predicted to remain steady. We have also noted that against the backdrop of complicated and changeable global economic environment, the sustainable and steady development of domestic economy faces pressure and challenges such as sluggish international demand, and rising wages, etc., which bears unfavorably on China鈥檚 investment environment. Therefore, China鈥檚 FDI still faces some problems that call for close attention or immediate address. We should pay high attentions to all those problems. Therefore, moving forward, we should pursue a more proactive opening up strategy, stay the course of attracting FDI and improve the investment environment to boost the comprehensive lead and general benefits of FDI utilization. (2013-10-17 11:46:25)

Beijing TV錛歁y question relates to China (Shanghai) Pilot Free Trade Zone (FTZ). On Oct. 10th, Shanghai Stock Exchange denied rumor that the International board would be launched by accepted the FTZ Why did this happen? Is it connected with the plunge of stock market? (2013-10-17 11:47:22)

Shen Danyang, Specific questions related to the FTZ should be addressed to Shanghai municipal government. The Shanghai FTZ is approved by the State Council, but the pilot is lead by the municipal government. (2013-10-17 11:47:40)

China News Service錛欼t is reported that the talk of 鈥渃oncluding an FTA with China by the end of the year鈥by Australian Prime Minister Tony Abbott has aroused disputes in Australia. What is MOFCOM鈥檚 comment? China and New Zealand have been implementing their FTA for five years. Has MOFCOM analyzed and evaluated the state over the past five years? Could you shed some light on that? Thank you. (2013-10-17 11:48:07)

Shen Danyang: China-Australia FTA talks draw wide attention. China has always attached great importance to China-Australia FTA negotiations and is committed to pressing forward the negotiations. We hope to sign an FTA with Australia as soon as possible. China is a developing country and Australia is a developed country. The two countries vary in fundamental realities and development stage, which results in different expectations for negotiation outcomes. Hence the argument following the Prime Minister鈥檚 statement.. It鈥檚 very natural that the two sides should hold different views in agriculture, investment and services with respective sensitive spots. We believe that, we will be able to reach a good FTA by building on leaders鈥consensus with the spirit of mutual benefit, win-win, mutual understanding and concession, locking in existing consensuses based on flexibility and practicality and seeking new consensuses. China will join efforts with Australia to strive for it.

China-New Zealand Free Trade Agreement is the first FTA of high quality that China signed with a developed country. Since October 1st, 2008, it has been implemented for 5 years. According to China鈥檚 statistics, China has been New Zealand鈥檚 second largest trade partner and the largest export market of its dairy products. Last year, China-New Zealand trade reached US$ 9.67 billion, more than double the figure of 2008, which was US$ 4.4 billion. The average annual growth rate was 22%. The FTA not only promotes the development of bilateral trade, but also creates huge business opportunities and benefits for enterprises on both sides. Since January 1st, 2013, China has implemented the sixth phase of tariff reduction under China-New Zealand FTA, with which more than 96.7% of Chinese imports from New Zealand enjoy zero tariff, and the average duty for Chinese manufactured exports to New Zealand has been reduced to 0.3%, which is equivalent to an average preferential rate of 97% as compared to most favoured nation treatment. New Zealand goods covered by preferential treatment mainly include milk powder, mutton, wool, kiwi fruit and lobster. Expanding imports of these products is also good news for the Chinese people.

Reuters: What鈥檚 China鈥檚 comment on US handling of the debt crisis? Is China satisfied with it?

Shen Danyang: As the largest economy in the world, default of the US will not only influence its own credit, but also encumber the global economic recovery. From the perspective of commerce, the US is China鈥檚 second largest export market. Its default might lead to rapid devaluation of the US dollar, which will augment the operational risks of China鈥檚 foreign trade enterprises, and affect the stable growth of China鈥檚 import and export. Besides, US default will also trigger turbulences in global financial market, which will impact China鈥檚 FDI and ODI. Therefore, together with related departments, MOFCOM will closely follow the situation, and cope with it prudently. A stable policy environment is needed for US and global economic recovery. We hope and believe that the US government will defuse the risk, and promote global financial recovery and market stability.

Shen Danyang: That concludes today's press conference.

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


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