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Regular Press Conference of the Ministry of Commerce (June 6, 2019)

Gao Feng: Friends from the press, good afternoon. Welcome to the MOFCOM regular press conference. Since I don鈥檛 have any announcement to make today, we can proceed directly to Q&A. The floor is open.

China Daily: Yesterday, Chinese and Russian leaders agreed to develop a comprehensive strategic partnership of coordination in a new era, further benefiting the two peoples. How will the meeting expand China-Russia cooperation? What role will it play in the future development of China-Russia commercial relations?

Gao Feng: On June 5, President Xi Jinping met with President Vladimir Putin in Moscow. The leaders reached key consensus on a number of issues in our practical commercial cooperation, which charts the strategic course for our commercial relations in a new era and starts a new period for our practical cooperation on all fronts. During the meeting, the two leaders witnessed the signature of a series of documents for practical cooperation, and many achievements were made.

First, government institutions. In terms of trade, MOFCOM and the Russian Ministry of Economic Development signed the Memorandum on Promoting High-quality Development of Bilateral Trade. The Memorandum proposes that bilateral trade volume should reach US$200 billion and puts forward a series of measures concerning implementing major strategic projects, accelerating the negotiation on trade and economic systems, cultivating new drivers of trade growth, nurturing trade entities and optimizing the trade safeguard system.

In terms of agriculture, MOFCOM, the Chinese Ministry of Agriculture, the Russian Ministry of Economic Development and the Russian Ministry of Agriculture jointly signed the Development Plan on Deepening China-Russia Cooperation in Soybeans, which lays an important foundation for expanding and deepening bilateral trade in soybeans and cooperation across the whole industrial chain. Relevant authorities also signed five market access agreements for agricultural produce, including the agreement on quarantine requirements for barley imported from Russia. These documents will underpin the rapid growth of our bilateral trade in agricultural produce.

In terms of scientific and technological innovation, the two sides signed documents on the establishment of a China-Russia joint fund for scientific and technological innovation, which will firmly support cooperation in this area.

Second, businesses. The two sides signed more than ten cooperation agreements in nuclear power, natural gas chemistry, automobile manufacturing, high-tech industrial parks, joint-venture e-commerce companies and deeper 5G cooperation. With a total contractual value surpassing US$20 billion, these agreements will drive bilateral trade and cooperation in relevant industries. From the perspective of the areas, bilateral business cooperation has gone beyond such traditional fields as energy and resources; Cooperation in emerging sectors including high-tech, medicine and e-commerce have made sound progress and are picking up pace, demonstrating the enormous potential and vast opportunities in China-Russia practical cooperation.

In general, the meeting between Chinese and Russian leaders is a fruitful one. It navigates and drives the development of China-Russia commercial ties in a new era, inspires our businesses to cooperate and adds fuel to our practical cooperation. Thank you.

Phoenix Television: Last weekend, China issued the White Paper 鈥淐hina鈥檚 Position on the China-US Economic and Trade Consultations鈥 where China鈥檚 position, principles and bottom lines are well explained. It is noted that the US hasn鈥檛 taken a step back and even responded with tough remarks. What does China think is the way out of the current impasse?

Gao Feng: The White Paper issued by China last week gives a systemic account of the course of the China-US economic and trade friction as well as the consultations. It solemnly declares the principles and position of the Chinese government concerning the China-US economic and trade consultations. It is hoped that the US could foster enabling conditions and atmosphere for solving this issue by approaching it seriously, having a clear understanding of some basic facts and logic, keeping up a correct attitude and righting its own wrongs. Thank you.

Xinhua News Agency: Recently, US Vice President Mike Pence stated that President Donald Trump believes the US is in an advantageous position in trade negotiations, and that tariffs on goods imported from China could be more than doubled. What is your comment? Commenting on China鈥檚 recent series of countermeasures, some foreign media think China might have more retaliating instruments at hand. What is your response?

Gao Feng: First, economic theories and historical facts prove that there is no winner in trade wars. Researches by some US think tanks show that if the US continues its tariff hikes, the US GDP growth will slow down with shrinking employment and investment, climbing domestic prices, and less competitive US products in overseas markets. More and more US businesses and consumers are aware of the impact of rising tariffs, and many have warned that the trade war would lead to economic recession.

Second, threatening each other with higher tariffs and escalating trade friction won鈥檛 help to solve economic and trade issues. Attempts that are based on a self-imposed, so-called 鈥渁dvantageous position鈥to coerce and press China into compromises that and disregard China鈥檚 sovereignty and core interests will only backfire.

Finally, China does not want a trade war, but it鈥檚 not afraid of one. If the US is determined to go down the road of escalating trade friction, we will take necessary countermeasures to safeguard our national and people鈥檚 interests. Thank you.

CNBC: My first question is, what kind of companies might be included in the 鈥渦nreliable entity list鈥 In what sense is it related to the 鈥渘egative list鈥 My second question is, is there any new progress in China-US trade negotiations? Are the two countries drifting away from each other? My third question is, amid the trade friction, has MOFCOM observed a significant change in the import and export of goods like soybeans, pork and rare earth? My last question is, what are China鈥檚 countermeasures, aside from raising tariffs?

Gao Feng: On your first question: Right now, the Chinese government is undergoing necessary procedures, and detailed measures are to be released soon. As for the differences between the 鈥渦nreliable entity list鈥and the 鈥渘egative list鈥 the former includes foreign companies, organizations and individuals that damages the legitimate rights and interests of Chinese companies by disobeying market rules, breaking their promises and blocking or cutting off supply to Chinese companies on non-commercial grounds. It is different from the 鈥渘egative list鈥that concerns market access for sectors. Of course, to some extent, it is analogous to a 鈥渘egative list鈥for businesses, organizations and individuals. Its details will be released soon.

On your second question: It is the US that imposed maximum pressure to escalate trade friction and disseminated the impact into other fields. Therefore, the US government should bear the sole and entire responsibility for this severe setback to the China-US economic and trade consultations. 鈥淗e who created the problem should solve it.鈥The key to the outcome is in the hands of the US. We will keep a close watch on its statements and actions.

On your third question: I have two groups of statistics regarding specific goods. According to China Customs, From January to April this year, China imported 24.39 million tons of soybeans, down by 7.9% year-on-year, of which the import from the US fell by 70.6% to 4.31 million tons, the import from Brazil rose by 46.8% to 15.496 million tons and the import from Argentina increased by 23 folds to 2.15 million tons. According to Global Trade Atlas, the share of US soybeans export to China, the largest overseas market of US soybeans, declined from 62.3% in 2016 to 17.9% in 2018.

As for the import of pork, from January to April, China imported 774,000 tons of pork, down by 0.9% year-on-year. The import from the US dropped by 53.6% to 70,000 tons, whereas the import from Spain, Canada, the UK, the Netherlands and other countries soared, each growing by more than 10%.

China boasts an open market. We welcome competitive products from around the world. The above statistics tell that US protectionism and trade bullying have tremendously impacted our bilateral trade in agricultural produce; neither has gained from them.

And on your fourth question: Like I said, China does not want a trade war, but it鈥檚 not afraid of one. If the US is determined to go down the road of escalating trade friction, we will take necessary countermeasures in order to safeguard our national and people鈥檚 interests. Thank you.

Economic Daily: We noted that MOFCOM released the Research Report on US Gains from the China-US Trade and Economic Cooperation this afternoon. What is the reason for issuing this report today, following the White Paper published last Sunday?

Gao Feng: This afternoon, we just released the Report you mentioned. Since the incumbent US administration took office, it has been trumpeting that the US has been taken advantage of, disregarding the mutually beneficial nature of China-US commercial cooperation, and provoked trade friction on the pretext of trade deficit. The Report reveals with data and facts the nature and causes of US trade deficit with China and the fact that the US has been greatly benefited from our trade and economic cooperation; it helps foster a better understanding of the actual situation of China-US commercial cooperation.

The Report points out that the US statistics of trade deficit in goods is exaggerated and cannot reflect the actual situation. US trade deficit with China results from artificial restrictions such as export restrictions by the US and the role of the market, and is influenced by multiple factors including industrial competitiveness, economic structures, international division of labor, trade policies and the US dollar鈥檚 status as a reserve currency. Although China enjoys trade surplus, it is both China and the US that benefit from our bilateral trade. The assertion that China is taking advantage of the US is untenable.

Over the 40 years since China and the US established diplomatic relations, our bilateral commercial cooperation has advanced greatly. This is achieved as our two countries embrace historical trends by actively participating in economic globalization and enhancing reciprocal cooperation. The scale of our commercial cooperation couldn鈥檛 have sustained if one side had been taken advantage of by the other. We urge the US to regard with an objective and reasonable perspective how our commercial ties have benefited our two peoples and contributed to global economic growth and prosperity; it should do more to promote bilateral commercial cooperation and ensure win-win outcomes. Thank you.

China News Service: Some analysts believe that the White Paper issued last weekend demonstrates China鈥檚 resolution to enter a protracted war. What is your comment?

Gao Feng: As is pointed out in the White Paper, China-US relationship is of paramount significance. China-US commercial relationship serves as the ballast and propeller of overall bilateral relationship, concerning the fundamental interests of the two peoples as well as the prosperity and stability of the world. China is committed to the sound and stable development of our commercial relationship.

China does not want a trade war, but it鈥檚 not afraid of one. If the US is determined to go down the road of escalating trade friction, we are resolved to fight to the end. Thank you.

Hubei Radio and Television Network: Prior to his visit to the UK, President Trump stated his confidence in convincing the US[UK] government to abandon Huawei equipment. What鈥檚 your comment?

Gao Feng: It is shocking that the US should mobilize enormous administrative resources against a foreign company worldwide in such an unfounded manner.

China firmly opposes the US approach of mobilizing national power against Chinese enterprises for non-commercial purposes. We hope that the US could remain clear-minded and avoid further escalating the situation. We also believe that relevant countries will not bow to external pressure and will continue to respect market principles and the rule of law while providing a non-discriminatory, level playing field for companies worldwide. Thank you.

Voice of China, CNR: US President Donald Trump recently said on social media that China is subsidizing its products in order to continue to sell them to the United States. He also said that many companies have left China and gone to other countries, including the United States, in order to avoid paying the tariffs. There has been no significant increase in cost or inflation. The United States is therefore taking in billions of dollars. What is the Chinese side鈥檚 comment on this?

Gao Feng: A recent study published by the International Monetary Fund showed that trade tensions between China and the US have led to a decline in China-US trade, but the bilateral trade deficit has remained largely unchanged, as the costs of rising tariffs were almost entirely borne by US importers. The latest US Customs data showed that tariff revenues are also on the decline. These are not unexpected, because there is no winner in a trade war.

We hope that the US can abandon zero-sum thinking and bullying practices and proceed from the interests of the Chinese and American enterprises and peoples, and from world economic prosperity and stability so as to properly handle China-US economic and trade relations. Thank you.

China Media Group: I have a follow-up question on the 鈥渦nreliable entity list鈥 Is there a preliminary list and when will it be introduced? Has the industry been consulted? Is the ICT sector a focused target? What specific measures will we take concerning the listed companies?

Gao Feng: On the 鈥渦nreliable entity list鈥system, we will announce the specific details once relevant procedures are complete. As a normative institutional design, it does not target any specific field, or any specific enterprise, organization or individual. Thank you.

CRI: The Chinese side has already announced the establishment of an 鈥渦nreliable entity list鈥system, which has also attracted a lot of public attention. Is this system WTO-consistent? Is China concerned that relevant countries may take China to the WTO for this list? How does a penalized company appeal?

Gao Feng: The WTO General Agreement on Tariffs and Trade and the General Agreement on Trade in Services allow for national security exceptions. They also make an exception for the relevant measures countries adopt to enforce domestic laws. Anti-monopoly regimes of many countries around the world also stipulate that actions to block normal business transactions or take other discriminatory measures for non-commercial reasons are illegal and subject to appropriate penalties. China鈥檚 anti-monopoly law also has similar provisions. In implementing the 鈥渦nreliable entity list鈥 we will protect the legitimate rights and interests of the enterprises in accordance with law. Thank you.

Caixin: In what way will the 鈥渦nreliable entity list鈥system make up for the shortcomings of the existing mechanisms?

Gao Feng: In establishing the 鈥渦nreliable entity list鈥system, China draws on prevailing international practices and aims at maintaining fair competition and market order.

China has a relatively complete system of laws and regulations in optimizing the business environment, safeguarding the legitimate rights and interests of all types of enterprises, and maintaining a market order based on the spirit of the contract. However, due to the rise of unilateralism and trade protectionism, some new situations and new challenges have emerged with regard to market environment and market order. The 鈥渦nreliable entity list鈥system that the Chinese government will establish is a normative system designed to target market-distorting practices based on non-commercial purposes. For those companies that abide by Chinese laws and regulations, comply with market rules, and honor the spirit of the contract, there is absolutely no cause for concern.

Macau Asia Satellite Television: We have noted that the Office of the US Trade Representative and the US Department of the Treasury issued a statement accusing China of playing the 鈥渂lame game鈥and distorting the nature and process of the trade negotiations between the two countries. What is the comment of the Chinese side on this issue?

Gao Feng: Regarding this statement of the US side, we have already stated China鈥檚 position on June 4. I would like to stress once again that the US side鈥檚 accusation of China 鈥渂ackpedaling鈥during the consultations is completely unfounded. In the course of the consultation, it is a common practice in trade negotiators to propose amendments and make adjustments to the text and related wording. Having repeatedly adjusted its demands in the past ten rounds of negotiations, the US is nonetheless arbitrarily accusing the Chinese side of 鈥渂ackpedaling鈥 This is unacceptable to China. It only shows that it is not the Chinese side that is playing the 鈥渂lame game鈥

China always believes that cooperation is principled and consultations have bottom lines. The two sides must respect each other鈥檚 sovereignty, dignity and core interests. The US will never succeed in forcing China to make concessions by exerting maximum pressure. Thank you.

Reuters: Just now you said that if the US wants to continue the talks, it needs to show sincerity and admit its mistakes. For the Chinese side, at the G20 meeting, if the so-called mistakes have not been corrected, will China be willing to meet with Trump and talk to him, or will it refuse to do so?

Gao Feng: China鈥檚 attitude toward the negotiations is very clear. If the US wants to continue the talks, it must show sincerity and correct the wrong approach. Cooperation has principles and negotiations have bottom lines. China will not make concessions on major issues of principle.

Nikkei: The content of the research report released today is basically the same as the information in the white paper published last September, and the data are the same too. So why do you emphasize these details again?

Gao Feng: As I have already introduced to you, this report uses data and facts to reveal the nature and causes of the China-US trade deficit problem and the fact that the United States has benefited enormously from China-US commercial cooperation. This report will help you understand the real picture of China-US trade and economic cooperation. Thank you.

AFP: Some companies have already announced that they will stop supplying to Huawei. Will China put these companies on the unreliable entity list? At the G20 meeting, will the Chinese Ministry of Commerce send a representative to meet with the US representative?

Gao Feng: I have answered these two questions just now. On the first question, the Chinese government is currently implementing relevant procedures, and specific measures will be announced in the near future. To your second question, if the US wants to continue the talks, it must show sincerity and correct the wrong approach. Cooperation has principles, and negotiations also have bottom lines. China will never give in on major issues of principle. Thank you.

Reuters: Regarding the 鈥渦nreliable entity list鈥 can you confirm for us whether or not these companies to be listed on the entity list will mainly be from the US? In addition, is the listing of such companies on this list related to their decisions on Huawei? How long does China intend to keep the 鈥渓ist of unreliable entities鈥 Are there any relevant conditions for the list to end? The G20 meeting is about to be held. Does China have any plans to negotiate with the US economic and trade team?

Gao Feng: On the first question about the 鈥渦nreliable entity list鈥 as I said earlier, as a normative institutional design, the 鈥渦nreliable entity list鈥system does not target any specific sector, or any specific enterprise, organization or individual. Regarding the China-US economic and trade consultations you mentioned, I have clearly stated China鈥檚 position. Our attitude toward the negotiations is very clear. If the US wants to continue the talks, it must show sincerity and correct the wrong approach. There are principles for cooperation, and bottom lines for negotiations. China will never give in on major issues of principle. Thank you.

AFP: At the G20 meeting, there seems to be a trade representative meeting. Which person will be sent to represent China at the trade representative consultation stage?

Gao Feng: Are you referring to the G20 Trade Ministers鈥Meeting? (The reporter answered: 鈥淵es鈥)

Regarding the G20 Trade Ministers鈥Meeting, China is making active preparation for it. We will be sending a delegation of a corresponding level to the meeting.

Gao Feng: Are there any more questions?

If not, I conclude today鈥檚 press conference. Thank you all.

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

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