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Online Regular Press Conference of the Ministry of Commerce (March 19, 2020)

[Gao Feng]: Dear friends from the press,鈥br>
Good afternoon everyone, welcome to the online press conference hall of the Ministry of Commerce and participate in today's regular press conference. Today, we have invited Mr. Zhu Xiaoliang, Director of the Department of Market System Development of the Ministry of Commerce, Ms. Jiang Fan, First-level Inspector of the Department of Foreign Trade, and Mr. Ye Wei, Deputy Director of the Department of Foreign Investment Administration. I am Gao Feng, spokesman for the Ministry of Commerce. Director Zhu Xiaoliang will first introduce to you the recent market supply and the progress of the nine-province joint supply guarantee mechanism, and then we will answer questions from the media.

First, I would like to invite Director Zhu Xiaoliang to make an introduction.

[Zhu Xiaoliang]:Dear friends from the media. At present, the national market supply of daily necessities is generally sufficient; the prices of grain and oil are basically stable; price of meat fluctuates slightly; prices of vegetables and eggs continue to fall. The market supply of daily necessities in Hubei is generally sufficient, and the inventory remains stable. The dynamic stocks of rice, flour, oil, poultry, meat and infant formula are sufficient for sale for more than 30 days, and dynamic stocks of pork, eggs, and milk are sufficient for sale for more than 15 days. There is ample supply of daily necessities in Wuhan, and the supply has been further improved. The municipal government organized the release of more than 5,000 tons of frozen pork reserve, which has effectively stabilized the price of pork. It has also organized 111 aquaculture farmers to provide the residential communities with about 300 tons of live fish daily. The variety of daily necessities supply has been continuously enriched to further meet the individual needs of residents.
The nine-province joint supply guarantee mechanism has continued to play a role. Up to now, 8 provinces and cities have transferred more than 62,000 tons of daily necessities to Wuhan and Hubei, of which 52,000 tons are fruits and vegetables. Hubei and Wuhan have been helped with the arrangement of the supply of 3,000 tons of frozen streaky pork and frozen ribs.

Thank you!

[Gao Feng]: Thank you Director Zhu Xiaoliang for your introduction. Next, we are willing to answer questions from the media.鈥br>鈥br>The floor is open now.

Hong Kong Commercial Daily: Manufacturing is speeding up resumption of work and production, but life service industry, especially hotels and eateries, still lags behind. What specific measures will MOFCOM take in this regard?

Zhu Xiaoliang: As the situation gets better, hotels and restaurants, among other life services, are recovering steadily. By March 16, the rate of resumption of life service business reached 60%, slower than manufacturing industry. There are several reasons. First, life services providers generally need to have direct contact with consumers. In some places, dine-in remains restricted due to prevention and control of the disease. Second, though the situation in China is getting much better, we鈥檙e still faced with a pandemic spreading worldwide. It takes time to see consumer confidence come back. Few customers lead to low revenues, which further weakens the willingness of enterprises to restart business. Third, companies in the life service industry are mostly labor-intensive but some workers have not returned to work yet.
In order to help hotels and restaurants back to normal more quickly, MOFCOM is working on the following aspects. First, in collaboration with relevant ministries, we are drafting a circular on resumption of work for life service industry based on different grades and sectors, including removing unreasonable restrictions and supporting service providers in speedy business resumption. The document will be released soon. Second, we supervise and urge local commerce authorities to ramp up services for businesses, issue and explain national and local support measures together with relevant agencies, and help companies make the most of these initiatives. Third, we guide local governments to help workers return to work via direct point-to-point non-stop transit so as to address the shortage of workers.

Thank you!

China News Service: Europe has become the world鈥檚 epicenter of covid-19. The situation in the US is also deteriorating. What is the impact on China鈥檚 attraction of foreign investment and what measures will MOFCOM take to stabilize foreign investment development?

Ye Wei: Covid-19 is rapidly spreading across the world, affecting more than 100 countries and territories. It is inevitable that cross-border investment will be negatively affected. The disease may lead to contraction of global cross-border FDI flow. According to UNCTAD鈥檚 assessment, cross-border FDI is expected to shrink by 5% if the disease is controlled in the first half of 2020 and 15% if it continues through the whole year.
鈥br>On March 10, Premier Li Keqiang chaired a State Council executive meeting which determined six measures on addressing the impact of covid-19 and stabilizing development of foreign trade and foreign investment. Going forward, we will follow the arrangement by the CPC Central Committee and the State Council, focus on the problems and targets and maintain a stable stock while boosting the increment. We will step up our work in five areas to ensure the overall stability of foreign investment.

First, further expanding opening up. Stepping up efforts to shorten the national and FTZ negative lists of administrative measures for admittance of foreign investments and keep expanding market access for foreign investment; speeding up the revision of the Catalogue of Encouraged Foreign Investment Industries, adding more encouraged industries and expanding and deepening opening up.
Second, implementing policies and measures to ensure stable foreign investment. The State Council and its relevant departments have introduced a series of policies and measures to make foreign trade and investment stable amid the NCP. The urgent task at moment is to offer policy support for foreign trade companies to comprehensively resume work and production, ensuring that the policies are effective and companies have a sense of gain.
Third, building a high-quality opening up platform. Promoting the innovation and upgrading of 218 national economic and technological development zones and giving FTZs more autonomy for reform and innovation to better leverage the leading role of major opening up platforms in keeping foreign trade and investment stable.
鈥br>Fourth, improving the level of investment promotion. We will improve the efficiency of multilateral and bilateral investment promotion mechanism and well leverage the roles of China International Import Expo, China International Fair for Investment and Trade and other major exhibition platforms in investment promotion.
Fifth, keep improving the foreign investment environment. We will well implement the Foreign Investment Law and its supporting regulations, establish a service system for foreign investment and improve a working mechanism for foreign investment companies to file complaints in order to attract, reassure and keep business.
In general, the basic upward trend of the Chinese economy remains unchanged; the strong magnetic attraction of the huge Chinese market remains unchanged; the comprehensive competitive strength of China in supporting industries, human resources and infrastructure remains unchanged; the expectations and confidence of foreign investors in long-term investment and operation in China remains unchanged. Under the strong leadership of the CPC Central Committee and State Council, we are confident and capable of overcoming the difficulties and fulfilling the annual targets of keeping foreign investment stable.
Thank you.

CNBC: How about the work and production resumption by foreign trade companies now? Does the global spread of NP have any impact on it?

Jiang Fan: Since the outbreak of NCP, the Ministry of Commerce has actively taken measures according to the plans made by the Party Central Committee and the State Council to facilitate orderly work and production resumption by foreign trade companies. First, we have further improved the coordination mechanism on foreign trade and investment, strengthening cross-regional and cross-department cooperation on work and production resumption and working with localities and relevant departments to address the specific business issues. Second, we have introduced a series of policies and measures helping businesses get work and production resumption in order, keeping foreign trade and investment stable and boosting consumption. We would make every attempt to help companies secure their orders of goods and market shares. Third, we would make the full and best use of policy tools to strengthen services. Export tax rebate, export credit insurance and other incentives are used to help Chinese and foreign-invested companies both enjoy the policy dividend. We would also guide companies in applying paperless import and export licenses and intermediaries in offering better legal services for companies.

With the implementation of a series of policies to facilitate the resumption of production and operations, key foreign trade companies across China are moving faster to get back to normal. According to statistics, 66.7% of key foreign trade companies in Chinese provinces other than Hubei have resumed over 70% of their production.
鈥br>We will closely follow the developments in the pandemic and changes in the global economy, do a good job in both pandemic response and trade and economic cooperation with foreign countries, and take targeted measures to resolve problems and difficulties in securing employees, capital and raw material supply in order to make the resumption more efficient. At the same time, we will step up international cooperation, facilitate the export of supplies needed for pandemic response, continue to provide assistance in our capacity, support affected countries in fighting against the pandemic and jointly ensure the smooth functioning of global industrial and supply chains.

Thank you.

Global Times: The global economy and trade have come to a standstill as a result of the pandemic. Are there risks that China鈥檚 external supply chains might be broken or that supply might be reduced significantly? What industrial chains in China will be affected? What measures will be taken in response?

Jiang Fan: As the pandemic spreads, international travel, logistics and transport might all be affected. Since global industrial and supply chains are deeply intertwined, the pandemic does have some impact on upstream and downstream industries and global industrial and supply chains.
The CPC Central Committee and the State Council set great store by foreign trade companies鈥resumption of production and operations. Following the plans of the CPC Central Committee and the State Council, MOFCOM has introduced policies to help enterprises overcome difficulties and move faster to get back to normal. With its great resilience and ample room for maneuver, China's foreign trade fundamentals underpinning long-term growth and openness will not change. We have full confidence in ensuring stable foreign trade fundamentals.
Going forward, following the plans of the CPC Central Committee and the State Council, MOFCOM will help companies on all industrial chains move faster to get back to normal in an orderly manner. First, we will take targeted measures to guarantee region-specific and tiered response. We will help foreign trade companies resume operations in an evidence-based and orderly manner. We will resolve problems and difficulties blocking the movement of people, goods and capital, and lift restrictions on freight logistics to ensure that employees can get back to work, raw materials be supplied and products delivered. Second, we will make greater efforts to coordinate the resumption. We will smooth the supply channels for raw materials and components, enhance cross-regional coordination between upstream and downstream producers and sellers, and facilitate supporting companies鈥resumption of production by helping leading companies so as to enhance synergy in resumption and ensure the basic stability of industrial chains. Third, we will step up international cooperation. While ensuring smooth resumption of production and operations and the better functioning of foreign trade industrial and supply chains in China, we will further enhance cooperation with our trading partners, share experience in pandemic response and provide timely, necessary help in our capacity. At the same time, we will step up international cooperation, coordination and communication on foreign trade supply chains to make our due contribution to the stable functioning of international industrial and supply chains.

Thank you.

Nihon Keizai Shimbun錛歐hat was trade like early March? As the outbreaks in Europe and the US get worse and worse, how is this impacting China?

Jiang Fan: The WHO announced a few days ago that COVID-19 is taking on features of a pandemic. As China鈥檚 key trading partners such as the EU, the US, Korea and Japan become affected by the virus, bilateral trading activities have also come under pressure.
Given our entwined interests and the potential impact of the pandemic, we should come together to overcome the hardship. China will continuously expand international cooperation to combat the virus and keep deepening practical economic and trade cooperation with the rest of the world under the special circumstances. At the same time, we鈥檒l also work to enforce precision poverty relief measures, help businesses stabilize international markets with focus on the following areas. First, we鈥檒l leverage bilateral economic and trade cooperation mechanisms to create a favorable environment for international trade. Second, we鈥檒l introduce a package of supporting fiscal, tax, financial and export credit insurance policies. Third, we鈥檒l encourage localities, trade associations and trade promotion agencies to support companies with necessary legal and information services. Fourth, we鈥檒l tap into the advantages of new business types and models in trade such as cross-border e-commerce and market procurement.

Thank you.

China Daily: Premier Li Keqiang indicated the other day that reform and opening-up will be advanced and bilateral and multilateral FTA talks accelerated. What FTA talks will MOFCOM prioritize moving forward? Will the RCEP process be affected?

Gao Feng: To my understanding, RCEP participating countries are all following the instructions of the leaders and aiming at signing the RCEP agreement by the end of the year. The Parties are working on legal scrubbing, among others, in an orderly way as per the agreed work plan to get the final text ready for signing. China will work with the others towards the signing of the agreement on time.
鈥br>In addition, we鈥檒l speed up the China-Japan-ROK FTA talks and step up the China-GCC FTA negotiations, while actively promoting FTA talks with Israel, Norway and Sri Lanka and upgrade talks with ROK and Peru to accelerate the development of a high-standard FTA network that is neighborhood-based, BRI-radiating and global-oriented FTA

Thank you.

NBD: As the epidemic spreads across the world, we have noted that at the beginning, many foreign trade companies were worried about the insufficient supply of raw materials and impeded logistics, but now they are more concerned with the trade orders from their foreign partners, or even the risk of breaching contracts. How does MOFCOM comment on such worries?

With the global spread of COVID-19, over 160 countries and regions have reported confirmed cases. COVID-19 has hit the production and consumption of some countries. Trade activities are on the decline, and global economy is under growing downward pressure. Foreign trade companies might be troubled by weak external demand and reduced orders for some time in the future.

To minimize the impacts of COVID-19 on foreign trade companies, MOFCOM has worked with relevant local governments and departments to introduce a series of policies aimed to stabilize foreign trade. Our priority is to, under the rules of the WTO, provide fiscal, tax, financial support and export credit insurance to foreign trade companies so as to help them secure markets and orders while preventing risks.

Thank you!

Shanghai Securities News: What efforts has MOFCOM made in poverty alleviation through consumption, production-marketing integration and e-commerce, and in improving poor sales of agricultural products in impoverished areas? How would MOFOCM move forward in the future?

In recent years, MOFCOM has been fully implementing the decisions on poverty eradication of the CPC central committee and the State Council. In collaboration with relevant government departments on poverty alleviation through consumption, MOFCOM has also worked conscientiously in promoting production-marketing integration and e-commerce to help reduce poverty. Fruitful results have been achieved so far.

Since the COVID-19 outbreak, affected by declining consumption demand, delayed return of workers, impeded logistics and rising costs in transport, many regions have reported poor sales of agricultural products. Poor areas, due to their weak industrial foundation, remote locations and inadequate resistance to market risks, face more salient problems of the poor sales of agricultural products and higher risks of falling back to poverty. This has posed a new challenge to the timely completion of the goal of poverty eradication and placed more burden on poverty alleviation through e-commerce and production-marketing integration.
The leading Party members鈥group of MOFCOM attaches great importance to poverty alleviation through commerce in areas like e-commerce and production-marketing integration, and explicitly requires prioritizing the task of resolving the difficulties in selling agricultural products, particularly in poor areas.

Over the past weeks and months we mainly did the following. The first is to have close monitoring and tracking to support better analysis and judgment, and timely identify the problems affecting the supply and distribution of agricultural products, ranging from road traffic restrictions to impeded movement of people and logistic flows in various localities, so as to provide a basis for scientific decision-making by the Party Central Committee and the State Council. The second is to strengthen the coordination amongst different agencies to ensure smooth road transport. In conjunction with the Ministry of Transport and other departments, we included agricultural products such as vegetables and fruits in the scope of important daily supplies, so that they are eligible for the green channel policy. While opening the 鈥渁orta鈥and smoothing the 鈥渕icrocirculation鈥 we offered point-to-point assistance to grassroots enterprises by solving travel and transport problems. The third is to guide localities to connect producers to buyers, and boost the sales of unmarketable agricultural products. The fourth is to mobilize broad-based participation by joining forces with industry associations, wholesale markets, supermarkets, e-commerce firms and other players to solve the difficulty in selling the products. The fifth is to resume work and production. Wholesale markets and farmers鈥markets are the main channels and pools for the selling of agricultural products in China, accounting for more than two-thirds of the entire agricultural product sales. They are also the main forces for ensuring supply and improving the sales of slow-moving items. During the Spring Festival, we provided guidance to the country鈥檚 large agricultural wholesale markets, asking them not to close business. At present, 96.4 percent of the country鈥檚 markets are back in business, and the volume of meat and vegetable transactions has increased by more than 50% compared to early February. The sixth is to ensure good online and offline connectivity by organizing enterprises and trade associations to set up online platforms to release consolidated information on slow-selling products, and promoting the sales of slow-selling agricultural products through various channels such as poverty alleviation channels and webcasting. Thanks to the joint efforts of all parties, the problem of slow sales of agricultural products has so far been effectively alleviated.
This morning, the Ministry of Commerce and the Poverty Alleviation Office of the State Council held a video conference on 鈥淓ffectively Addressing the Selling Difficulty for Agricultural Products in the Poor Regions to Help Win the Battle against Poverty鈥 emphasizing the need to tackle the problem of slow sales of agricultural products in poor regions as a political task. We will continue to improve coordination both horizontally and vertically. On the one hand, we will take advantage of consumption, seller-buyer matching and electronic commerce as means to alleviate poverty, and take multiple measures to expand agricultural product sales channels. On the other hand, we will handle it with urgency and through special arrangement to mitigate the issue of unsalable agricultural products, consolidate and improve the results of the fight against poverty, and help win the battle against poverty.
In the coming days and weeks, the Ministry of Commerce will work together with the Poverty Alleviation Office of the State Council to issue a circular on addressing the difficulty of selling agricultural products to set out the work arrangement for the whole year.

Thank you.

Gao Feng: Due to time limit, we will take one last question.

Xinhua News Agency: The COVID-19 outbreak has been a major test for the supply chains. What are the roles played by the pilot enterprises for supply chain innovation and application in fighting the epidemic?

Zhu Xiaoliang: Since the epidemic broke out, the 200-plus pilot enterprises have responded to the Party and the government and taken proactive steps despite difficulties. Leveraging their abundant channel resources and strong integration and collaboration capacities, they have played a positive part in supporting epidemic prevention and control, ensuring market supply and accelerating work resumption.

First, the pilot enterprises have been emergency buyers and producers of prevention and control supplies for the battle against the epidemic. The epidemic broke out during China鈥檚 Spring Festival when many domestic upstream companies were on vacation. The pilot enterprises have made full use of the supply chain channels they have and adapted to the situation in no time by reaching out to existing overseas export clients to place orders for facial masks, protective suits and other protective equipment. For example, a Shenzhen-based pilot enterprise alone had purchased 236,000 protective suits, 202,000 safety goggles, over 500,000 bottles of sanitizer and more than 17 million facial masks by just February 18. Some pilot enterprises in areas like clothing, medicine and automobile have switched to producing protective equipment to meet the urgent demand. It took only six days for one enterprise to apply for certification and see its first 16 tons of sanitizers roll off the production line. This 鈥渟wift turn鈥wouldn鈥檛 be possible without the staggering speed of China鈥檚 manufacturing sector or the resilience of the Chinese enterprises innovating in supply chains.

Second, the pilot enterprises have taken a series of measures to facilitate distribution and stabilize prices, helping secure people鈥檚 livelihood and boost their confidence. Engaged in fighting the outbreak and ensuring supply are more than 80 pilot enterprises in the logistics sector, which have overcome traffic interruption, logistical stagnation and other obstacles to ensure market supply and price stability. Among them is a large supermarket in Wuhan, the frontline against the outbreak. It has kept its door open, its supply ample and its pricing unchanged while adjusting its operation as the outbreak develops, doing whatever it can to provide people in Wuhan with their basic need. Several pilot enterprises near Hubei have also been involved in ensuring supply. As they maintained their local supply, they have been a logistical prop for the battle against the outbreak, sending vegetables, rice, pork, milk and other goods to Hubei non-stop.

Thanks to the dedication of the pilot supply chain enterprises, adequate food supply has been secured with stable prices. They are indeed a ballast for people鈥檚 livelihood and our battle against COVID-19.

Third, industrial leaders played an important role in the coordinated resumption of work and production of the whole industrial chain. At present, all the pilot businesses, including those in Hubei province, have resumed work and production. Most of them are supply chain platforms or main players critical for the whole industrial chain to resume operation. For example, a pilot SOE played a leading role in completing 22.6 billion yuan procurement through its online supply chain management platform, and has paid 8.9 billion yuan that injected liquidity into the upstream and downstream SMEs to help them get back to normal. Some companies, having resumed full operation themselves, built service platforms that provide customized solutions for outbreak control and resumption of work and production to SMEs, thus creating an ecological cluster of business resumption.

On the whole, in this battle against the epidemic, pilot companies for supply chain innovation and application shouldered their responsibilities and took proactive measures. Their effect and success were well-proven during the outbreak.

Thank you.

Gao Feng: This is the end of the press conference. Thank you to the three speakers and journalists. We will respond to other questions you are interested in afterwards. Thank you.

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