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Regular Press Conference of the Ministry of Commerce (July 25, 2019)

Gao Feng: Members of the press, good afternoon. Welcome to the regular press conference of the Ministry of Commerce. As there is no information to share with you upfront, I open the floor to questions.

Phoenix Satellite TV錛歐e鈥檝e noted the media report that related Chinese companies have started a new round of procurement of US agricultural products and are applying for exemption from additional tariffs for these purchases. Could you shed some light on that, such as the volumes and the kinds of products? Will this be a condition for re-launching the consultations between China and the US?

Gao Feng: To our understanding, to better address domestic market demand, some Chinese companies desire to continue to import some agricultural products from the US and have asked for quotes and will sign contracts with US suppliers. The related purchases will be based on business decisions and market rules. To reopen the economic and trade consultations is a major consensus of the presidents鈥summit in Osaka with no direct link with trade procurement.

CNBC: First, what鈥檚 the progress of China-US trade talks? Will the representatives of the two countries meet next week? Will the talks have a greater impact on Huawei and other Chinese tech companies? Second, what鈥檚 MOFCOM鈥檚 outlook on Chinese manufacturing given Sino-US trade frictions and the drive for quality development? Third, what鈥檚 the progress with the list of unreliable entities? When will it be published? Lastly, the China-UAE Business Forum will be held in Beijing. Could MOFCOM brief us on China-UAE commercial cooperation and its outlook for the next two to three years?

Gao Feng: Regarding your first question, to implement the major consensuses of the presidents鈥summit in Osaka, the principals of the two sides will meet in Shanghai from Jul. 30th to 31st for the 12th round of China-US High-level Economic and Trade Consultation on the basis of equality and mutual respect.

As for Huawei and some Chinese companies, China鈥檚 position is consistent and clear. We urge the US to conscientiously honor its commitments and stop the wrong act of bashing Chinese companies with state power.

As regards Chinese manufacturing, since this year, the sector has grown amidst stability. According to the National Bureau of Statistics, the value added of Chinese manufacturing was up by 6.4% year-on-year in the first half of the year. More specifically, hi-tech manufacturing and strategic emerging manufacturing registered 9% and 7.7% respectively, far outperforming the sectoral average. In terms of foreign trade, manufacturing transformation and upgrade has promoted the upgrade of China鈥檚 export mix, driving the rapid growth of new energy vehicles, ICs, machine tools, and medical devices, among other high-tech and high value-added exports. Let me emphasize that no matter how the external environment changes, Chinese manufacturing will keep the momentum of transformation and upgrade and quality development.

Regarding the list of unreliable entities, the regime is going through related procedures and will come out soon.

You also mentioned China-UAE economic and trade cooperation. In recent years, under the strategic guidance of the two countries鈥leaders, bilateral economic and trade cooperation has grown rapidly and entered the best stage in history. China has become the UAE鈥檚 largest trading partner, whereas the latter is China鈥檚 2nd largest trading partner and biggest export destination in the Arab world. In 2018, bilateral trade hit US$ 45.92 billion, up by 12.1%. In the first half of the year, bilateral trade stood at US$ 22.66 billion, up by 9.6% year-on-year. China is a key investment and infrastructure partner for the UAE, which is China鈥檚 2nd largest investment destination in the Arab region. As of the first half of the year, China鈥檚 direct investment in the UAE totaled US$ 5.91 billion with US$ 29.7 billion in contractual engineering turnover; UAE direct investment in China valued at US$ 1.27 billion. In the first half of the year, China鈥檚 direct investment in the UAE was US$ 510 million, up by 271% year-on-year with a contractual engineering turnover of US$ 1.85 billion, up by 68.2% year-on-year; UAE direct investment in China stood at US$ 1.75 million.

Moving forward, we would like to work with the UAE to follow through on the leaders鈥consensuses, jointly build high-quality Belt and Road, and make full use of major platforms such as the CIIE and the China-Arab States Expo to expand bilateral investment and trade, advance the development of the China-GCC FTA, and promote cooperation in infrastructure, energy and resources, e-commerce, finance and innovation and third-market cooperation for bilateral economic and trade cooperation to reach a new high. Thank you.

Radio Television Hong Kong: Why did this round of consultations take place in Shanghai instead of Beijing as the earlier rounds did? Did China or the US pick the place? According to today鈥檚 report, 35 US companies are applying for lifting the sanctions on Huawei to the USDOC, which says it will take a few weeks to process an answer. Does China welcome the USDOC statement? How does China take it? Is Huawei鈥檚 removal from the Entity List a key issue of this round? Will the absence of a solution or Huawei鈥檚 remaining on the list stall the negotiations?

Gao Feng: Regarding your first question, it鈥檚 common to arrange consultations in different places. Shanghai is well positioned to host the consultations.

As for Huawei, I already said that we urge the US to conscientiously honor commitments and stop the wrong act of bashing Chinese companies with state power. Thank you.

Bloomberg: What is Minister Zhong鈥檚 role in the Shanghai consultations? Is he playing a more prominent role? Second, regarding agricultural purchases, more specifically, will China partially exempt the importers of these agricultural products from the import duties? We understand that the exemption is applicable to soybean. What about other agricultural products? Thank you.

Gao Feng: Your first question concerns specific arrangements of the consultations. We鈥檒l share any further information promptly.

As for your second question, I had answered earlier that China has huge potential demand for quality agricultural products. To our understanding, some Chinese companies would like to continue to import certain US agricultural products and have asked for quotes and will sign contracts with US suppliers based on market principles.

Regarding tariff exemptions, to my understanding, the Customs Tariff Commission of the State Council will consider granting tariff exemptions to some of the US agricultural exports to China in accordance with related regulations and organize expert panels to review business applications. Thank you.

CNS: You mentioned that some companies are applying for tariff exemptions for agricultural purchases from the US according to the regulations of the Customs Tariff Commission of the State Council. Could you brief us on the exemption procedures and the products proposed for exemption?

Gao Feng: As I said, the Customs Tariff Commission of the State Council will consider granting tariff exemptions to some of the US agricultural exports to China in accordance with related regulations and organize expert panels to review business applications. Thank you.

CNR: We鈥檝e noted that CAPE, a US company, announced a few days ago the termination of its cooperation with DJI, a Chinese drone manufacturer. What鈥檚 MOFCOM鈥檚 comment? Will the Chinese government take measures to support Chinese companies?

Gao Feng: We鈥檝e noted the report. To our understanding, the US Department of the Interior issued a related report on Jul. 2nd following a 15-month assessment, indicating that DJI solutions can effectively address the security risks of drone data management and the accusation of the US company is groundless.

Some in America smear and bash Chinese companies under the pretext of security risks without any factual basis only to hurt their own interests. The Chinese government always requires Chinese companies to abide by laws and regulations in operations and observe international rules as well as the laws and regulations of host countries. We support Chinese companies鈥normal business cooperation with foreign companies on the basis of equality and mutual benefit. Thank you.

CNR: Doug Collins, the Ranking Member of the House Judiciary Committee commented on Alibaba鈥檚 anti-counterfeit campaign a few days ago. In contrast to persistent criticisms of China鈥檚 IP record, the US is praising a Chinese company for the first time while noting that US e-commerce platforms lag far behind Alibaba in this regard. What鈥檚 your take on that? In addition, statistics of a US think tank show that since Trump took office, Chinese investment has fallen dramatically by about 90%. What鈥檚 China鈥檚 comment? It is reported that this intensifies the concern about the decoupling of the two economies. What do you make of that?

Gao Feng: To your first question, this fully speaks to China鈥檚 achievements in IP protection. To your second question, According to MOFCOM statistics, in the first half of the year, Chinese non-financial direct investment in the US hit US$ 1.96 billion in the first half of the year, down by around 20% year-on-year. Overall, China鈥檚 investment in the US has been on a downward trend since last year.

For some time now, the US has stepped up the review of Chinese investment in the US on the grounds of national security, wantonly expanding the review scope and restricting Chinese business investment in the US as a result. At the same time, the US abuses the national security review, creating lots of uncertainties and instabilities in the US investment climate and seriously dampening the confidence of investors across the world, including Chinese companies, about investing in the US.

The US has repeatedly expressed welcome to investment from China. We believe that this should not be just lip service. Chinese businesses investing in the US are by nature no different from those from other countries in that they are all responsible investors after commercial interests and business growth based on market principles and international customs. We hope that the US can treat Chinese investors fairly and justly in line with the non-discrimination principle, enhance the transparency and due process of the security review, and create a favorable, stable and predictable investment environment for investors from China and across the world.

As for whether the two economies are disengaging, let me stress that the so-called decoupling of the Chinese and US economies is against the law of the market economy, the wishes of the business communities on both sides, and the wellbeing of both peoples and will be a big blow and impact on global industrial chains and the world economy. Over the four decades of diplomatic relations, the two economies are highly integrated with entwined interests, benefiting people of both countries and worldwide. The so-called decoupling is unimaginable and undesirable, I believe, for people of all walks of life in the US. It is hoped that these Americans can ditch zero-sum thinking and do more to benefit both countries and peoples. Thank you.

CCTV-4錛歎S Republican senators recently tabled a bill to ban Huawei from buying or selling US patents in the latest Congress move against Huawei. What鈥檚 MOFCOM鈥檚 comment?

Gao Feng: We鈥檝e noted the bill proposed by US senators to prohibit protection for Huawei鈥檚 patent rights. We deeply regret that.

If the US on the one hand demands from China greater IP protection for US companies, but on the other hand refuses to give due IP protection to Chinese companies, it would be a typical case of double standards and self-contradiction. It is hoped that the US will not let such an absurd bill continue. Thank you.

CBN: Can RCEP be concluded this year? What are the priorities and difficulties?

Gao Feng: Since this year, RCEP negotiations have made much positive progress. Market access negotiations for goods, services and investment have accelerated further. The completion level for text negotiations has increased significantly. Currently, RCEP parties are getting keener on concluding the negotiations as early as possible. At the ASEAN Summit last Jun., ASEAN leaders reaffirmed the commitment to conclude the negotiations this year.

As we speak, Round 27 is ongoing in Zhengzhou, China, to be followed by a ministerial meeting from Aug.2nd to 3rd in China. China would like to intensify efforts with all sides to advance the negotiations, resolve outstanding issues and bring the negotiations to an early conclusion. Thank you.

Hong Kong Commercial Broadcasting: Regarding the economic and trade consultations in Shanghai, the US treasury secretary sees to meet in Shanghai a gesture of good will on the part of China. What鈥檚 China鈥檚 response? The US also said a series of topics were covered but more meetings would have to take place before a deal could be struck and wished to have the next meeting in DC. What are China鈥檚 views?

Gao Feng: I鈥檝e already answered your questions. It鈥檚 a very normal arrangement to have consultations in different places. Shanghai has very good conditions for the consultation. We鈥檒l release any further information promptly regarding the specifics of the next round. Thank you.

Global Times English Version: To our understanding, the US contract manufacturing giant Flex unilaterally withheld goods and equipment worth US$ 700 million from Huawei after the US blacklisted the company. A month had elapsed when Huawei demanded their return. Will such behavior qualify Flex for China鈥檚 unreliable entities list?

Gao Feng: I don鈥檛 have information regarding the details. As for the unreliable entities list, I鈥檝e said earlier that it is going through related procedures for release soon. Thank you.

Gao Feng: Any further questions?

Then this concludes 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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