Gao Feng: Dear friends from the press, good afternoon. Welcome to the regular press conference of the Ministry of Commerce. Firstly, I have two pieces of information to release to you.
Gao Feng: I. China鈥檚 Absorption of Foreign Investment in January-August 2019
In January-August, 2019, China鈥檚 absorption of foreign investment mainly showed the following features:
1. Actual use of foreign investment kept its stable growth.
In January-August, 27,704 foreign invested companies were newly established, and the actual use of foreign capital reached 604.04 billion yuan, increasing by 6.9% year on year (equivalent to US$89.26 billion, up 3.2% year on year, and the data of bank, security and insurance sectors were not included, the same below).
The actual use of foreign capital in August reached 70.89 billion yuan, increasing by 3.6% year on year, equivalent to US$10.46 billion, up 0.3% year on year.
2. The high-tech industry enjoyed a rapid growth.
In January-August, the actually utilized foreign capital of manufacturing industry reached 170.72 billion yuan; that of service industry reached 425.23 billion yuan, up 11.2% year on year. The actually utilized foreign capital of hi-tech industry reached 174.8 billion yuan, up by 39.3% year on year, taking up 28.9% of the total amount. The actually utilized foreign capital of the high-tech manufacturing industry was 66.52 billion yuan, up 16.4% year on year. Among these, the actual use of foreign capital in chemical manufacturing and electronic and communication device manufacturing increased by 48.6% and 20.1% respectively year on year. The actually utilized FDI in hi-tech service sector reached 108.28 billion yuan, up 58.4% year on year. Among these, that in information service, R&D and design錛宎nd the transformation of scientific and technological achievement increased by 46.4%, 54.4% and 74.6% respectively year on year.
3. The absorption of foreign capital in the eastern and western regions and the Pilot Free Trade Zone continued to grow steadily.
The actual use of foreign capital in the eastern and western regions was up 6.9% and 15.8% respectively year on year. The actual use of foreign capital in the Pilot Free Trade Zone reached 86.6 billion yuan, increasing by 23.3% year on year, accounting for 14.3%.
4. Investment from major investment sources kept steady.
Among the main investment sources, Hong Kong, Macao, Japan, South Korea, Singapore, Netherlands and France increased their investment in China by 7.4%, 11.9%, 10.6%, 45.3%, 17.1%, 13.3% and 14.5% respectively; the actual foreign investment from countries along 鈥淏elt and Road鈥 routes and ASEAN increased by 6.3% and 7.7% respectively (including investment data from free trade ports).
Gao Feng: II. Development of China's service outsourcing in January- August, 2019
From January to August this year, China's service outsourcing has maintained a steady and promising development trend. According to the statistics of the Ministry of Commerce, from January to August, the volume of contracts signed by Chinese enterprises amounted to 786.09 billion yuan (in different currencies), with an execution volume of 521.43 billion yuan, an increase of 5.4% and 14% respectively. The volume of offshore service outsourcing contracts was 474.4 billion yuan, with an execution volume of 314.29 billion yuan, an increase of 12.2% and 11.8% respectively.
From the perspective of structure, from January to August, the offshore execution volumes of information technology outsourcing (ITO), business process outsourcing (BPO) and knowledge process outsourcing (KPO) were 145.64 billion yuan, 51.47 billion yuan and 117.18 billion yuan respectively, up 7.9%, 33.8% and 8.9% year on year respectively, accounting for 46.3%, 16.4% and 37.3% of the total offshore execution volume respectively. The outsourcing of production services such as Internet marketing and promotion services, inspection and testing services, information technology solutions services and e-commerce platform services developed rapidly. From January to August, their offshore execution volumes were 1.44 billion yuan, 4.43 billion yuan, 1.88 billion yuan and 3.51 billion yuan respectively, up 76.7%, 67.2%, 38.1% and 36.9% respectively.
Regarding overseas markets, from January to August, the execution volumes of China's offshore service outsourcing in the United States, Hong Kong, and the EU were 66.17 billion yuan, 54.11 billion yuan, and 52.79 billion yuan respectively, up 5.8%, 14.7%, and 22.9% year on year respectively, accounting for 21.1%, 17.2% and 16.8% of the total offshore execution volume respectively; the execution volume of service outsourcing in the countries along the 鈥淏elt and Road鈥 routes was 57.31 billion yuan, a year-on-year increase of 10%.
In terms of domestic regions, from January to August, the execution volume of offshore service outsourcing undertaken by 31 demonstration cities such as Beijing and Shanghai was 273.14 billion yuan, up 8% year on year, accounting for 86.9% of the national volume.
Regarding employment, from January to August, 364,000 jobs in service outsourcing were created, and a total of 11.054 million jobs were created. 7.141 million employees have college degree or above, accounting for 64.6%.
The above are the message I want to inform you. Now I would like to take your questions. The floor is open.
China News Agency: Premier Li Keqiang is scheduled to pay an official visit to Russia from 16th to 18th of September, and hold the 24th regular meeting with Russian premier. How does MOFOMC evaluate the status quo of China-Russia commercial cooperation? Which will be the areas that the two sides plan to step up cooperation in?
Gao Feng: In recent years, under the strategic leadership and push of President Xi Jinping and President Putin, China-Russia commercial relations have developed rapidly and deepened on all fronts.
First, the bilateral trade has been growing steadily. In 2018, China-Russia trade crossed USD100 billion, making China the largest trading partner of Russia for the 9th year in a row. In the first eight months of this year, the bilateral trade reached USD70.59 billion, up by 4.5% year on year. Bilateral service trade also grew rapidly to USD17.59 billion, doubling the amount in the same period last year and standing out as a bright spot in bilateral trade.
Second, investment cooperation has kept expanding. In the first seven months of this year, China鈥檚 direct investment to Russia grew by 13% year on year, extending from such traditional areas as energy, oil and gas, agriculture and forestry to manufacturing industries in automobile, home appliance, and food processing. Investment method has expanded from traditional green field investment to equity acquisition, M&A, and establishment of fund. The two sides are working actively to establish a joint technological innovation fund to fuel cooperation in technology and innovation.
Third, cooperation in major projects is advancing steadily. The nuclear package cooperation has been fully launched; the eastern section of the China-Russia natural gas pipe line is moving smoothly and is expected to supply gas in December this year. Chinese companies have held stock in Arctic LNG-2 project; Tongjiang Railway Bridge and Heihe Highway Bridge have been joined, and the follow-up construction is advancing rapidly.
Fourth, agricultural cooperation has been growing fast. In 2018 the bilateral trade of agri-products crossed USD5 billion. Cooperation in animal husbandry and farming, and soybean has produced rich results, setting a good example for deepening agricultural cooperation along the entire industrial chain.
Fifth, sub-national cooperation has substantiated and deepened. Northeastern China-Far East Commission, Yangtze-Volga River Council and other mechanism are running successfully. The China Russia Far East Cooperation Plan (2018-2024) and Northeastern China-Far East Agricultural Development Plan are implemented in real earnest, with some projects achieving initial progress. Platforms like the CIIE, China-Russia Expo, Eastern Economic Forum, and St. Petersburg Economic Forum have served to match businesses from the two sides and promote sub-national cooperation.
On the whole, China-Russia commercial cooperation is improving in speed and quality, and marching toward high-quality development. The visit of the Premier is likely to produce many agreements for pragmatic cooperation in trade, investment, digital economy, agriculture, science and technology, aerospace, and nuclear power, injecting fresh impetus into the bilateral commercial ties and enriching the agenda of the comprehensive strategic cooperative partnership in the new era. China is ready to work with Russia to follow the instructions of the leaders, strengthen traditional trade, foster new drivers for cooperation, push ahead with strategic projects cooperation, accelerate the consultations on institutional arrangement, deepen sub-national cooperation, and benefit the two countries and two peoples. Thank you.
Economic Daily: Another question regarding China-Russia cooperation. In recent years, the Far-east cooperation of the two countries has drawn wide attention. Earlier this month, Vice Premier Hu Chunhua attended the 5th Eastern Economic Forum as head of the Chinese delegation. How do you evaluate the Far-east cooperation as it stands and what are the expectations for the way forward?
Gao Feng: It is an important agreement of the two leaders and priority area for pragmatic cooperation for the two countries to step up Far-east cooperation. Under the strategic leadership of President Xi and President Putin, China-Russia Far-east cooperation has kept sound momentum, underpinned by concrete mechanisms such as the intergovernmental cooperation committee between northeastern China and Russia Far-east and Baikal. It has entered a new stage of mutually-reinforcing trade and investment and sound interaction.
First, the trade value has been growing fast. According to Russian statistics, trade between China and Russia Far East registered USD9.7 billion in 2018, up by 27.6% and taking up 28.4% of the total trade of the Federation, making China the largest trading partner of the Far East for three years in a row. In the first 6 months of this year, trade between China and Russian Far East reached USD4.88 billion, up by 21%.
Second, investment cooperation has been deepening. According to Russian statistics, Chinese companies have invested in 49 projects in the Far East development zone and free port, with a contractual value of USD2.7 billion, making China the largest source of FDI for the Far East. The cooperation projects in infrastructure, agriculture, forestry, energy, resources, ports, logistics, and technological innovation have been moving steadily.
The two sides also scored notable progress in connectivity and institutional building. The two sides have agreed to establish a Northeast China-Russia Far East Entrepreneurs Council and plan to hold the inaugural meeting by the end of this year.
Going forward, under the overall planning and guidance of the Northeastern China-Russia Far East cooperation committee, we will better align policies and projects with the Russian side, enhance cooperation environment, and substantiate and deepen cooperation on the basis of the current success. Thank you.
Bloomberg: You鈥檝e probably seen in the morning that President Trump tweeted that the tariffs due to take effect on Oct. 1st will be postponed to Oct. 15th. What is China鈥檚 comment? Could you tell us when the Chinese delegation will travel to the US for the negotiations? Besides, Bloomberg reported today that China is considering allowing businesses to start buying US agricultural produce such as soybean, corn and pork. What is your comment? Is it a precondition for deferring the teriffs?
Gao Feng: We welcome the US move as a gesture of goodwill. To my understanding, Chinese companies are asking for quotes of US agricultural products. It is hoped that the two sides will pull in the same direction and take actions to set the stage for the consultations. This is beneficial to not only China and the US but also to the whole world.
As for the 13th Round of High-level Economic and Trade Consultations, the two sides are communicating on related arrangements. We鈥檒l release more details when they become available. Thank you.
Phoenix Satellite TV: We noted that the Customs Tariff Commission of the State Council unveiled the first list of US goods eligible for exclusion from additional tariffs. What are the criteria for the exclusion? What are the follow-up exclusion plans?
Gao Feng: The first exclusion list includes 16 products based on the following three criteria: first, it would be difficult to find alternative sources; second, the additional tariffs would cause considerable economic damages to the applicants; third, the additional tariffs would have a major negative structural impact on related industries or severe social consequences.
Moving forward, the Customs Tariff Commission of the State Council will continue to work on the exclusion of US imports from additional tariffs according to applications of Chinese companies and release the lists at appropriate times. Thank you.
China Business News: Starting from September, China and the US will impose extra tariffs on imports from each other. Will this have a negative impact on China鈥檚 foreign trade and economy? Is the Chinese economy resilient enough to weather the current international environment? What measures will MOFCOM take to stabilize foreign trade?
Gao Feng: We have said that the Chinese economy is shifting from high-speed growth to quality development, underlining the trend of gearshift. With a dynamic micro-base, great resilience, huge wriggle room, and sufficient macro-policy tools, we have full confidence and capabilities to ensure sound fundamentals for economic development.
We will continue to push the implementation of policies aimed at stabilizing trade, strengthen policy reserves, and introduce new supporting measures in a timely manner to enhance trade facilitation and promote quality trade development. Thank you.
CBN TV: We鈥檝e noted that China鈥檚 imports and exports slowed dramatically in August as compared to July. What鈥檚 the cause from your analysis? Given the escalation in tariffs by the US in September, what鈥檚 MOFCOM鈥檚 forecast for China鈥檚 foreign trade in the coming months?
Gao Feng: The growth of China鈥檚 imports and exports fell in August from July, which agrees with the trends of the global economy and trade. In terms of export, demand in the international market slowed. In July, the IMF revised down its full-year forecast for world economic growth to 3.2% and its growth expectation for world trade from 3.4% to 2.5%. The WTO鈥檚 Goods Trade Barometer released in August registered at 95.7, which is down by 0.6 from the last quarter. At a three-year low, it points to further flagging in global trade in goods. Import-wise, falling commodities import prices are the main factor. In particular, the average import prices of crude oil, refined oil, soybean and coal had fallen by 6.6% to 11.3%, driving down import growth by 1.5 percentage points in August.
Overall, China鈥檚 foreign trade has maintained the good momentum of quality improvement amidst stability. In August, China鈥檚 imports and exports kept running high by monthly standards. From January to August, RMB-denominated foreign trade grew 3.6% accumulatively. According to the half-year figures published by the WTO, China鈥檚 exports are outperforming the average of the world鈥檚 key economies. No matter how the external environment changes, we have full confidence and capabilities to continue the quality development of trade. Thank you.
South China Morning Post: My question relates to the purchase of agricultural products. US media reported that for the upcoming round of talks, China had suggested deferring tariffs and relaxing the sanctions on Huawei in exchange for its purchases of US agricultural products. Is it true? Do China鈥檚 purchases include soybean and pork? Will the negotiations take place before Nov. 15th?
Gao Feng: I鈥檓 not aware of such terms for the negotiations. China鈥檚 bottom-line remains unchanged. As for the resumed buying of US agricultural products, like I said, Chinese companies are asking for quotes of US agricultural products, including soybean and pork. Regarding the specifics of the consultations, the two sides are communicating on related arrangements. We鈥檒l release more details when they become available. Thank you.
Let me add one more thing. The economic and trade teams of the two sides have maintained effective communications. As agreed by the principals on the phone last week, the two sides will meet at the working level very soon for conscientious consultations in preparation for the high-level talks. Thank you.
CNR: Tomorrow is Mid-autumn Day. What measures will MOFCOM take to ensure stable prices for vegetables, eggs and meat, especially pork, for the Mid-autumn Day and National Day holidays?
Gao Feng: Mid-autumn Day and National Day holidays are high season for shopping with supplies of daily necessities well guaranteed overall. From MOFCOM monitoring, of daily staples in markets across the country, the prices of meat and eggs have gone up in September, with narrowed margin; the prices of vegetables and fruits have fallen a bit. Last week (Sept. 2nd-8th), wholesale price hikes for pork, beef, mutton and eggs in 36 large and medium-sized cities slowed by 7.4, 0.6, 0.2, and 0.4 percentage points, while wholesale prices for vegetables and fruits fell by 0.5% and 0.9% week-on-week.
To ensure market supplies during the holidays, we鈥檒l work with related departments and localities to better connect producers with sellers, widen supply sources and actively increase the supply of daily staples such as pork, beef, mutton, poultry, eggs and aquatic products. Central and local frozen pork, beef, and mutton reserves will be released to ensure stable supplies. Thank you.
MNI: You mentioned working-level consultations between China and the US. Could you shed some light on any substantial progress? What are the main technical issues the two sides are tacking at the staff-level?
Gao Feng: As I just said, the economic and trade teams of the two sides have maintained effective communications. As agreed by the principals on the phone last week, the two sides will meet at the working level very soon for conscientious consultations in preparation for the high-level talks. We鈥檒l release more details when they become available. Thank you.
Gao Feng: Any further questions? If not, this concludes today鈥檚 press conference.
Tomorrow is Mid-autumn Day. On behalf of the MOFCOM News Office, I鈥檇 like to thank you for your support and wish you and your family a happy and healthy Mid-autumn Day. Thank you.