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Regular Press Conference of the Ministry of Commerce (June 27, 2019)
  

Gao Feng: Friends from the press, good afternoon. Welcome to the regular press conference of MOFCOM. I don鈥檛 have any announcement to make today, so I鈥檇 like to take your questions. The floor is open.

Xinhua News Agency: At the just-concluded hearings concerning the proposed tariffs on 300 billion dollars of Chinese imports, many US business representatives called on the US administration not to impose tariffs on Chinese goods on the ground that those tariffs will harm the interests of companies and consumers. What鈥檚 your comment?

Gao Feng: Between June 17 and 21, June 24 and 25, the Office of USTR held hearings on the proposal to impose tariffs on 300 billion dollars of Chinese goods in Washington D.C. Over 90 percent of representatives object to imposing additional tariffs.

As many as 314 representatives from myriad industries including machinery and electrical equipment, textiles, garments, footwear, hats, toys, sports gear, steel and aluminum, food, pharmaceuticals, game software and others attended the hearings. 96% of them or 303 representatives opposed tariffs. There is a consensus among American business community that tariffs will cut jobs, hurt the economy and hit the consumers of the US. According to US Chamber of Commerce documents, additional tariffs may cost the US one trillion dollars. A study by the National Retail Federation showed that if the tariffs are imposed, it will cost American consumers 4.4 billion dollars more to buy clothes, 2.5 billion dollars for shoes, 3.7 billion more for toys, and 1.6 billion more for household goods. A majority of industry associations and companies agreed that China has an irreplaceable advantage in supply chain. China鈥檚 fully-fledged industrial chain can provide complete infrastructure from upstream to downstream, sufficient skilled labor force and high quality products at a relatively lower price that suffice to meet the demands of the US market. In the short run, it is impossible for the US or other third party to replace China鈥檚 production capacity. Given China鈥檚 distinct advantage of industrial chain, moving the industrial chain out of the country is not economically viable. On top of that, many US companies have established close relationship with Chinese counterparts in their long-term cooperation. Reshaping the supply chain will land them in trouble such as a longer period of product certification or risks of inferior quality products.

These opinions fully prove that cooperation is the only right choice for China and the US. It is hoped that the US can listen carefully to the voice of the business community, stop making mistakes and resolve existing issues through equal-footed dialogue and cooperation. This is in the interest of the people of China and the US and the world at large.

CNBC: I have three questions. First, before Chinese and US presidents met, Vice Premier Liu He had a telephone conversation with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. What did they talk about? Second, during the summit, did the two presidents reach a deal on problems confronting Huawei and other Chinese tech companies in the US? If not, is there going to be follow-up consultations? Third, when will the unreliable entity list be published and what impacts will it have on Chinese and world economy as well as trade between China and the US?

Gao Feng: Firstly, on June 24, the two principals of China-US high-level consultations had a conference call and exchanged views on trade issues as instructed by the two presidents in their telephone conversation. The two sides agreed to maintain communication. So far I have no other information for you pertaining to the conversation.

Secondly, the Spokesman of the Ministry of Foreign Affairs has made a response to the question about the two presidents鈥meeting during the G20 Summit. With respect to the US restrictions on Huawei and other Chinese companies, we have stated our position on many occasions. That the US uses national force to hammer Chinese companies and imposes restrictions on US companies selling products and technologies to their Chinese partners has not only damaged the legitimate rights and interests of Chinese companies, but also severely disrupted the normal technological exchanges and trade between the two countries or even at a global level. It has posed a serious threat to the security of global industrial chain and supply chain. Therefore, no winner will emerge from such practices that are not only harmful for others but also detrimental to the US itself.

President Xi Jinping noted in his telephone conversation with President Trump that he hoped the US can treat Chinese enterprises in a fair manner. We urge the US to remove the restrictions and sanctions facing Chinese companies such as Huawei immediately in a bid to promote sound and stable growth of China-US trade and economic relations.

Thirdly, the unreliable entity list is undergoing relevant procedures and will soon be published. As is explained, the unreliable entity list is designed in reaction to practices distorting the market for non-commercial purposes. Companies that abide by Chinese laws and regulations, observe the market rules and respect the spirit of contract should have no worries. China will protect the legitimate rights and interests of companies in China in accordance with law and firmly uphold the market order based on the rule of law and the spirit of contract. Thank you.

CCTV4錛歐e have noted that FedEx has filed a lawsuit against the Department of Commerce of the US and its export control regulations. What is MOFCOM鈥檚 comment on that? It鈥檚 reported that FedEx might be put on China鈥檚 鈥淯nreliable Entities List鈥due to the company鈥檚 recent problems. Is China intended to do so?

We鈥檝e noted relevant reports on FedEx鈥檚 lawsuit against the US government department. What I want to stress is that China opposes US abuse of export control measures. In today鈥檚 economically globalized world, the trade bullyism by the US side would eventually hurt its enterprises and consumers.

As for which companies would be put on the 鈥淯nreliable Entities List鈥 relevant details would be published soon. In general, the following factors would be taken into account: first, whether the entity has imposed blockade on, cut supply to, or taken other discriminatory measures against Chinese entities; second, whether the entity has contravened market rules and the spirit of contract for non-commercial purposes; third, whether the entity鈥檚 actions constitute material damages to Chinese companies or relevant industries; fourth, whether the entity鈥檚 actions pose threat or potential threat to national security. Thank you.

CNR: After the phone call between the two presidents of China and the US, the Department of Commerce of the US put 5 Chinese entities on the so-called 鈥淓ntity List鈥 How does China comment on that?

Since the beginning of this year, a total of 47 Chinese companies or organizations have been added to the so-called 鈥淓ntity List鈥subject to export control by the US. The US generalization of the concept of national security and abuse of export control measures go against the principle of market competition, disturb the normal technological exchanges and trade activities between the two countries, hurt the interests of both Chinese and US companies, and do little to address the trade imbalance the US has long been concerned about. China stands firm in opposition to that.

China believes that deepening cooperation and enhancing sound interactions on high-tech between the two countries is conducive to improving people鈥檚 well-being and serves the common interest of the two countries and the world. We urge the US to stop wrong actions immediately and return to the track of cooperation. Thank you.

Phoenix: Recently some foreign media cited remarks from US officials that the US might suspend the imposition of additional tariffs on another USD300 billion worth of Chinese exports to the US, but would not accept the cancellation of existing tariffs as a premise of the negotiations. What is China鈥檚 response to that? Will it be possible for the two sides to reach the agreement at the meeting?

China鈥檚 attitude has been very clear that we oppose the trade bullyism of unilateral tariff hikes. We welcome the actions that help manage and control differences and prevent escalation of the trade frictions, which are in line with the interests of the people and enterprises of the two countries and the world. Thank you.

CBN Daily: Before the G20 Summit, on June 24, Mr. Liu He, member of the CPC Central Committee, Vice Premier of the State Council, and the Chinese principal of the China-US Comprehensive Economic Dialogue, had a phone call with Mr. Lighthizer, the US Trade Representative, and Mr. Mnuchin, the Treasury Secretary. Will the two sides resume the negotiations? Will there be any meeting between the two trade teams before the leaders鈥meeting? Will there be any changes in the trade and economic consultation compared to the previous version? How is the preliminary consultation going?

The principals of the two sides had a very good conversation over the phone on June 24 and the communication would continue between the two trade teams. Any further information will be released in a timely manner. Thank you.

Economic Daily: It is reported that in RCEP negotiations, China proposed a scheme of 13 countries, excluding India, Australia and New Zealand. Is it true? Could you elaborate on it?

Gao Feng: China has never made such a proposal. Since the launch of RCEP negotiations, China has kept a consistent and positive position. We are committed to the centrality of ASEAN in negotiations and playing a constructive role in promoting talks, peace and successful conclusion of the negotiations, so that substantive progress can be delivered.

We have entered a crucial stage of RCEP negotiations. China is maintaining close communication with all parties, including India, and is conducting bilateral consultations at various levels. We look to all parties for constructive and positive roles in the negotiations, so that we can solve the key outstanding issues and conclude the talks within this year, as was the goal. Thank you.

China Arab TV: The first China-Africa Economic and Trade Expo was launched in Changsha this morning. Could you give us an overview? How many countries and companies attended the Expo?

Gao Feng: This morning, the first China-Africa Economic and Trade Expo was launched in Changsha, Hunan province. President Xi Jinping sent a congratulatory letter, setting the direction for China-Africa commercial cooperation in the next stage. Vice Premier Hu Chunhua attended the opening ceremony and read out the letter from President Xi, followed by a keynote speech. All 53 African countries with diplomatic ties with China, and UNIDO and WTO sent delegations, with a total of about 1,600 foreign guests. Among them are over 120 officials at vice-ministerial level and above, including President Museveni of Uganda, deputy PM Correia of Cape Verde and deputy PM Gulaid of Somalia.

The Expo was one of the concrete measures to implement the 鈥淓ight Initiatives鈥proposed by President Xi Jinping at the FOCAC summit in September 2018. The Expo is themed as 鈥淲in-win cooperation for closer China-Africa economic and trade partnership鈥 and contains a range of events, such as exhibitions, commercial cooperation forums, seminars, and business matching meetings. The exhibition consists of five sections: national exhibition, where all 53 African countries and the African Union set up their own booths; exhibition of China-Africa commercial cooperation, which showcases the rich fruits of China-Africa cooperation in trade, investment, infrastructure, etc.; exhibition of cooperation cases, where 37 cases in agriculture, manufacturing, commerce, mining, infrastructure, and cooperation parks are demonstrated for reference and mutual learning; exhibition of Chinese provinces and municipals, where 28 provinces, autonomous regions, and municipalities organized displays of their regions; exhibition of Chinese enterprises, which 12 centrally-owned SOEs and 4 financial institutions jointly participated in. In addition, the online China-Africa Trade and Economic Expo was launched on June 26th.

We hope events like seminars, exhibitions and demonstrations, project matching, experience sharing will make the Expo a new mechanism for commercial cooperation with Africa, a new platform to implement the measures of FOCAC, and a new window for subnational cooperation with Africa, in an effort to broaden, upgrade and deepen our commercial cooperation, deepen the comprehensive strategic partnership between China and Africa, and build a closer community of a shared future for China and Africa. Thank you.

Bloomberg: My question is about the three concerns raised by VP Liu He, including the concern over the balance of text. Have they changed or not? Are they important preconditions for the conclusion of the agreement? President Trump recently said he had a plan B should the talks fail to deliver a good agreement. Does China have a plan B? Secretary Mnunchin and other senior US officials noted that 90% of the work had been completed before the talks collapsed, and they would like to return to the previous text. Does China agree to return to the previous text or intend to negotiate a new one?

Gao Feng: Regarding your first question, China has a consistent and clear position on trade talks with the US, that China鈥檚 core concerns must be properly handled.

Regarding the second and third question, the two teams are communicating with each other at the direction of the two leaders and making preparations for the Osaka summit. I would like to stress the a trade war leaves no winners, but harms the US business and consumers. We hope the US could listen to the common voices of the majority of business and consumers in the US, abandon the wrong practices, solve problems through equal-footed dialogue and cooperation, which serve the interests of the two peoples and the world. Thank you.

CNR: Recently, Suning International, a wholly-owned subsidiary of Suning.com, acquired an 80% stake in Carrefour China for RMB 4.8 billion. Following Tesco and Lotte Mart, Carrefour became another foreign retail giant to leave China. What is MOFCOM鈥檚 take on the successive exits of foreign retailers and the advances of online players to offline supermarket business?

Gao Feng: Since reform and opening, foreign retailers have played an important role in China鈥檚 economic development, not only providing quality products and services for consumers, but also bringing advanced managerial expertise, promoting market competition and driving the development of the industry.

China鈥檚 commercial retail is a fully competitive industry, where strategic cooperation and M&A are normal market behaviors and results of market competition. With the wide application of the internet technology, new business types and models are developing rapidly, We鈥檝e noted that some foreign retailers are still bullish about China鈥檚 consumption potentials and wish to meet diversified, quality-oriented and personalized consumer demands with products and services of better quality, so as to further explore the Chinese market.

We believe that with the continuous unleash of China鈥檚 consumption potentials and the transformation and upgrade of consumer demand, the Chinese market will offer more development opportunities. We welcome investors across the world to continue to enter and explore the Chinese market and will work continually to create a more stable, fair, transparent and predictable business environment for all market players, including foreign-invested enterprises.

As for the integrated development of online e-commerce with offline supermarket business, we see this as a new trend in commercial retailing, including the foreign-invested sector. It can achieve complementarity among different business types and expand the comprehensive service space of supply chains to drive innovative business development while delivering better consumption experience for consumers. We will continue to take active measures to promote online-offline interaction and integration for China鈥檚 consumption upgrade. Thank you.

Hong Kong Commercial Broadcasting: First, the White House said that President Trump and President Xi Jinping will meet at 11:30 on Saturday in Osaka. Could MOFCOM confirm the time? Second, it is reported that the negotiation teams of China and the US will resume talks in Osaka and both sides will call in extra staff at short notice. What鈥檚 MOFCOM鈥檚 response? Third, it is reported that China and the US have agreed a preliminary deal to call a truce on their trade before the presidents鈥meeting. What鈥檚 MOFCOM鈥檚 response?

Gao Feng: I suggest you ask the Ministry of Foreign Affairs for arrangements related to the presidents鈥meeting.

Regarding the other two questions, the principals of the two sides, following the instructions of the presidents鈥call, exchanged views on economic and trade issues and agreed to stay in touch on related issues at their telephone conference on Monday. We鈥檒l publish further information promptly when there is any. Thank you.

MNI: Should President Trump be unhappy with his meeting with President Xi and insist on slapping additional tariffs on USD 300 billion of Chinese goods, how would China respond? Would it refuse to engage further with the US?

Gao Feng: You have made a hypothesis, which I cannot comment on. China鈥檚 attitude to tariffs is very clear. We鈥檙e against the trade bullyism of additional tariffs all along. Thank you.

Reuters: To follow up on the question by our colleague from Hong Kong, according to SCMP, a truce has been agreed. What鈥檚 MOFCOM鈥檚 take? Is it true for the Chinese side? Second, it鈥檚 reported that some of Huawei鈥檚 employees had done research for the PLA. Does MOFCOM know about this? What is MOFCOM鈥檚 viewpoint?

Gao Feng: To your first question, what I can tell you is that the economic and trade teams of China and the US are engaged in communications as instructed by the presidents鈥call to make preparations on the economic and trade front for the Osaka meeting. We鈥檒l publish further information promptly when there is any.

As for your second question, I haven鈥檛 read the related report. Thank you.

Gao Feng: Any further questions?

Well then, this concludes today鈥檚 press conference. Thank you.



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