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Online Regular Press Conference of the Ministry of Commerce (March 26, 2020)

[Gao Feng]:Dear friends from the press,
Good afternoon, welcome to the online press conference hall of the Ministry of Commerce and participate in today's regular press conference. Today, we invite Mr. Xian Guoyi, Director of the Department of Trade in Services and Commercial Services of the Ministry of Commerce, and Mr. Liu Changyu, Second-level Inspector (Deputy Director General) of the Department of Foreign Trade. I am Gao Feng, spokesman for the Ministry of Commerce. Director Xian Guoyi will first introduce the recent market supply and the relevant situation of the nine-province joint supply guarantee mechanism. Then I will brief you on the situation of China鈥檚 outward investment cooperation in the first two months of this year, and then we will answer questions from the media.
First, I would like to invite Director Xian Guoyi to make an introduction.

[Xian Guoyi]:Dear friends from the media, good afternoon. At present, the national market supply of daily necessities has been generally sufficient, and prices have been stable with a slight decline. According to the monitoring of MOFCOM, on March 25, the wholesale price of grain in 100 large-scale agricultural and sideline products wholesale markets basically stayed the same as that of the end of February, and the wholesale price of edible oil fell by 0.3%; the wholesale prices of pork, beef and mutton decreased by 2.6%, 1.1% and 1.8% respectively; the prices of chicken and eggs dropped by 1.7% and 4.0% respectively; the average wholesale price of 30 kinds of vegetables decreased by 15.6%. The reserves of daily necessities in Hubei and Wuhan are abundant with guaranteed supply, and the market maintains stable function in general. On March 25, the inventories of rice, flour, edible oil, meat, eggs, milk, and vegetables of the key investigated retail companies in Hubei and Wuhan continued to increase with their ability to ensure market supply further increased. The sales of pork and vegetables in Wuhan's major supermarkets remained basically stable, and dynamic inventory was at a relatively high level. Relying on the nine-province joint supply guarantee mechanism, relevant provinces and cities have transported rice, flour, grain, edible oil, meat, poultry, eggs, and milk in accordance with the consumer demand in Hubei and Wuhan to ensure local market supply. So far, more than 72,000 tons of daily necessities have been transported to Hubei, including more than 62,000 tons of fruits and vegetables, more than 6,670 tons of rice and flour, more than 3,130 tons of edible oil, and more than 680 tons of convenience foods. Thank you!

[Gao Feng]: Thank you Director Xian Guoyi for your introduction. Next, I will introduce relevant situations about China鈥檚 outward investment and cooperation in January-February 2020.
In January-February 2020, China鈥檚 domestic investors鈥non-financial FDI in 147 countries and regions and 1,733 overseas enterprises amounted to 107.86 billion yuan, up 1.8% year on year (equivalent to US$15.5 billion, down 1% year on year). The turnover of the overseas contracted projects amounted to 108 billion yuan, with a year-on-year decrease of 9.5% (equivalent to US$15.52 billion, down 12% year on year). The value of newly signed contracts was 215.03 billion yuan, with a year-on-year increase of 38.3% (equivalent to US$30.9 billion, up 34.5% year on year). The number of various kinds of workers dispatched overseas reached 39,000, with a year-on-year decrease of 29,000. At the end of February, 778,000 contracted workers of various types were abroad.

In January-February 2020, China's outward investment and cooperation mainly presented the following characteristics:
鈥br>First, investment and cooperation with countries along the Belt and Road increased significantly. In January-February, Chinese enterprises made newly-added investment of US$2.72 billion in 48 countries along the Belt and Road, up 18.3% year on year. The contract value of newly-signed projects in 59 countries along the Belt and Road amounted to US$15.36 billion, up 25.6% year on year, and the turnover was US$9.14 billion.鈥冣

Second, the structure of outward investment continued to be diversified. In January-February, outward investment mainly flowed into traditional investment fields such as leasing and commercial service industry, wholesale and retail industry, manufacturing industry, and mining industry, taking up 40.8錛 15.1錛 11.3錛and 8.9% respectively. Of the total amount, US$6.33 billion flowed into leasing and commercial service industry, up 43.2錛year on year, making it the industry with the highest investment growth rate.
Third, the number of newly-signed major overseas contracted projects increased. In January-February, 115 projects with contract value over US$50 million were newly signed, increasing by 29 year on year, accounting for 83.9% of the total value of the newly-signed contracts, mainly in the fields of transportation construction, power engineering construction, general construction projects, communication engineering construction, and petrochemical projects.
The above is the information I want to inform you about. Now I would like to take your questions.鈥br>鈥br>The floor is open.

MNI: Although order is being restored in China in production and people鈥檚 lives, there is still a lack of consumer confidence. When will China鈥檚 consumer market return to normal? Besides, the employment data from January and February seem to indicate a considerable impact on personal income in the first quarter. Do you think there will be 鈥渞etaliatory consumption鈥

Xian Guoyi: Since the epidemic broke out, the consumer market has been greatly affected by people鈥檚 plunging outdoor activities. However, it has also shown huge resilience and vitality, with rigid consumption sound and stable, new consumption hot spots emerging at a faster pace, and the room for consumption upgrading ever expanding. In January and February, the sales of food and drinks by enterprises above a designated limit grew by 9.7% and 3.1% year-on-year respectively, and the online sales of real goods bucked the trend with a 3% growth.

The epidemic鈥檚 impact on our consumption is temporary and under control. As the prevention and control of the outbreak is showing progress recently, businesses have picked up their pace to resume work, and market sales have passed a tipping point. MOFCOM statistics show that by March 22, on average, 97% of the large-size agricultural product wholesale markets, 96% of the large-size supermarkets, 94% of the grocery markets, and 90% of the department stores and shopping centers have resumed operation. The daily sales of key retail businesses monitored by MOFCOM increased by 5.6% from mid- to late-February, 0.5% from late-February to early-March, and 0.8% from early- to mid-March. As production and people鈥檚 lives come back to order, and as state and local policies and approaches aiming at recovering and boosting consumption are implemented and start to show effect, The consumer market will continue its steady pickup. Rigid consumption in some areas, which has been postponed due to the outbreak, will be compensated after the epidemic. Thank you.

CNBC: Is the work resumption effort of foreign trade companies in China significantly hampered, as the disease is spreading worldwide?

Liu Changyu: Since the epidemic broke out, MOFCOM has been following the policies and plans of the CPC Central Committee and the State Council, and worked with local governments and relevant authorities to encourage foreign trade businesses to resume work and open up the industrial and supply chains of this sector, so as to prevent and control the disease while ensuring economic and social development. Statistics show that by March 24, nearly all key foreign trade businesses in China have resumed work. 71.3% of the key foreign trade companies have resumed more than 70% of their production capacity, up 4.6 percentage points than a week ago. It can thus be said that our foreign trade businesses are resuming their operation in a stable and orderly fashion.

The adverse impact of the spreading epidemic on foreign trade companies鈥effort to resume production is temporary. First, it has affected international demand. As our main trading partners have entered an emergency state in their bid to combat the pandemic, foreign trade companies are impacted by weak international demand in the short run. Second, it has affected international trade cooperation. As China鈥檚 imports of intermediate products and raw materials may be affected, it will in turn affect the export of final products. Third, it has affected international business activities. The exchange of business personnel has come to a halt, various types of exhibition and business negotiations have been postponed or cancelled, and firms are facing new problems in getting orders as traditional business methods no longer work and traditional channels become impeded. The epidemic knows no national boundaries. The virus is the common enemy of mankind, and we will prevail. The Ministry of Commerce will pay close attention to the challenges brought about by the global pandemic, and act in accordance with the instructions of the Party Central Committee and the State Council to facilitate the orderly resumption of work and production of foreign trade companies, ensure the production and export of key products by key enterprises, support companies in their effort to secure orders through online negotiations and participation in online trade fairs, and work with other countries to ensure that the global supply chain remains open, stable, and secure, and to ensure the stability of foreign trade fundamentals. Thank you!

Bloomberg: The epidemic has had a big impact on consumption and the services industry. Based on the current monitoring data, how is the recovery of consumption in March? What do you expect of the development of consumption and the services industry throughout the year?

Xian Guoyi: On this issue, having just talked about the consumption of goods. I will now add a few words about the consumption of life services. Since catering, accommodation, homemaking and other life services require direct contact with the consumer, these industries have experienced a more pronounced impact from the Covid-19 epidemic. According to the National Bureau of Statistics, the operating revenue of the catering industry in January-February fell 43.1% year-on-year. According to the Ministry of Commerce, in February the accommodation and homemaking business suffered a more than 75% decrease in operating revenue as compared to the same period last year.

Recently, as we continue to consolidate the good progress in containing and controlling the epidemic nationwide, and make steady progress in getting life service suppliers back to business, the consumption of life services has gradually recovered. Monitoring by the Ministry of Commerce shows that as of now, the rates of work resumption in the catering, accommodation and homemaking business have reached 80%, 60%, and 40% respectively; the recovery of consumption of catering services has also accelerated. As of 25 March, the share of operating income of the 3,000 catering stores under MOFCOM surveillance rose within a week by about 10 percentage points as compared to the same period last year, and was up by more than 30 percentage points from the lowest point in February.

With the further restoration of production and life, and as the policies and measures introduced by the Party Central Committee and the State Council to promote consumption gradually take effect, the consumer market will continue to recover steadily in the weeks and months ahead. The epidemic is not going to change the positive long-term trend of consumption development in China. Thank you!

Yi Cai: As the epidemic spreads across the world, suspension of work and production is also expanding. How does it impact China鈥檚 imports? What industries would face most challenges? What measures are taken to tackle these challenges?

According to the customs authority, China鈥檚 imports totaled at RMB2.08317 trillion for this January and February, a year-on-year decrease of 2.4%. Due to the global spread of COVID-19, countries have taken more drastic preventive measures, which has affected global economy and trade. Half of our imports come from countries whose confirmed cases have exceeded one thousand. Seven of our top ten trading partners in terms of import trade have over 1000 confirmed cases. Suspension of work and production is expanding overseas, leading to weaker supply capacity. As things stand now, imports of mechanical and electrical products, transportation equipment, energy and chemical products are suffering heavily.

Since the epidemic outbreak, guided by the instructions of the CPC central committee and the State Council, MOFCOM has introduced a series of policy measures aimed to stabilize foreign trade and investment, and promote consumption. We have further improved the coordination mechanism for foreign trade and investment, stepped up efforts to facilitate businesses to resume work and production across different regions and sectors, and helped resolve the specific problems facing foreign trade companies. Moving forward, MOFCOM will work continuously to push forward with the orderly resumption of production of foreign trade companies, and focus on imports in the following four aspects:

First, we would follow closely the difficulties and challenges related to import trade of foreign trade companies, strengthen communication with relevant government departments and local governments to ensure the full implementation of policy measures that have been promulgated. We would work with relevant business associations and chambers of commerce to provide better information services to companies, push them to innovate and improve their services so as to work as a bridge between governments and businesses.

Second, we would take the initiative to expand imports. In recent years, a number of policy measures have been put forward in China to expand imports actively. Efforts would only be intensified in the future, including encouraging the importation of advanced technologies, equipment and key components, boosting national economy with better equipment and upgrading our service sector. We would also increase the imports of energy products and resources with domestic shortages and improve the quality of domestic supply system. We would import more agricultural products and food, so as to satisfy people鈥檚 needs for better products. In particular, guided by the important instruction by President Xi, we would work conscientiously to make the third China International Import Expo a greater success.

Third, we would promote import trade facilitation, further streamline the approval procedures of importation, cut the time of customs clearance and keep reducing the institutional costs for customs clearance.

Fourth, we would move faster to develop demonstration zones to promote import trade by creative means, fully leverage the leading role of these demonstration zones in promoting imports, boosting the service industry and enhancing consumption. Thank you!

Shanghai Securities News: Zhejiang province recently announced that it would introduce policies to stimulate consumption, such as eased restrictions on automobile purchases and subsidies for automobiles purchased by rural residents. What is MOFCOM鈥檚 comment? Will more measures be adopted in the future to boost automobile consumption, especially new-energy vehicle (NEV) consumption?

Xian Guoyi: Automobiles are the pillar of the consumer market. Retail automobile sales of commercial businesses above the designated scale account for about 10% of total retail sales of consumer goods. The outbreak is going to have a huge impact on automobile consumption in the short term. According to the statistics of the China Association of Automobile Manufacturers, 2.238 million automobiles were sold in January and February this year, down by 42% year on year. 310,000 automobiles were sold in February, down by 79.1%.
As we get the outbreak under control, more and more automobile outlets are opening their doors for business, and purchases are gradually getting back to normal. According to the survey of 8,569 4S outlets around China by the China Automobile Dealers Association, by March 24, 94.7% of outlets had resumed business and 61.7% of their consumer flow had recovered. To offset the impact of the outbreak on consumption, cities like Hang Zhou introduced measures to ease purchase restrictions. The measures will help expand consumption of physical goods and facilitate consumption recovery.
Going forward, faithfully following the decisions and plans of the CPC Central Committee and the State Council, MOFCOM will encourage localities to adopt, in light of local conditions, measures to boost NEV consumption and encourage trade-ins of old automobiles for new ones to further stabilize and expand automobile consumption. Thank you.

Nihon Keizai Shimbun: Some Chinese foreign trade companies鈥orders were cancelled due to the worsening epidemic in Europe and the US. What鈥檚 your take on the impact of the plunge in overseas orders on these companies?

Liu Changyu: The COVID-19 pandemic is now spreading in over 190 countries and regions. With the response measures adopted by various countries regarding the movement of people, international logistics and transport, among other areas, China鈥檚 major trading partners, including Europe, the US, Japan and South Korea, have been hit to varying degrees in terms of domestic production and consumption demand. Inevitably, this poses pressure on China鈥檚 bilateral trade with these trading partners. International organizations and agencies have lowered their global economic and trade forecasts one after another.
Uncertainty in China鈥檚 external trade environment and downward pressure on international trade demand are both on the rise. However, we should be aware that China has complete and competitive foreign trade industrial chains, Chinese companies are highly innovative, and Chinese foreign trade companies are resilient and good at turning crises into opportunities. These strengths have been tested in previous crises and will surely be enhanced in our COVID-19 response. Countries鈥interests are deeply intertwined nowadays. First, MOFCOM will work harder to assess how the COVID-19 outbreaks develop in affected countries, especially in China鈥檚 major trading partners, and the impact on bilateral trade and economic ties, step up international cooperation on pandemic response, deepen practical bilateral commercial cooperation and reduce external trade risks as much as possible. Second and foremost, we will make full and good use of foreign trade policies. In particular, we will push for the early implementation of targeted fiscal, tax, financial and export credit insurance policies and measures to support companies. We will support localities, trade associations and trade promotion agencies in providing companies with necessary legal and information services, guide companies in guarding against risks and help them maintain their orders and market shares. Thank you.

Xinhua News Agency: It is reported that many international trading companies錛after resuming production, were closed again or had to cut production because of the sharp decline in overseas demand and orders as COVID-19 spreads across the world. How are these international trading companies doing? Will there be large-scale bankruptcy or layoff?

Liu Changyu: It鈥檚 true that international trading companies are under pressure. But China has huge potential and maneuvering space in foreign trade. Chinese international trading companies are also strong in innovation and market exploration. Faced with the severe and complex situation, the international trading companies have accelerated the resumption of work and production under the strong leadership of the CPC Central Committee and the State Council and with the support and help from governments and industry organizations. They are making every effort to overcome the adverse impact of the pandemic and global economic downturn by expanding trade channels, stabilizing the existing orders, and striving for new orders, fulling demonstrating the responsibility and courage to tackle challenges.
MOFCOM will continue to fully implement the decisions and deployment of the CPC Central Committee, step up coordination and provide targeted assistance to businesses to overcome difficulties together. We will stabilize the fundamentals of foreign trade, and make positive contribution to the building of a moderately prosperous society in all respects. Thank you.

Hong Kong South China Morning Post: According to Guangdong Commerce Department, the 127th Canton Fair will not be held on April 15th as scheduled. Have you rescheduled it to a new date? Or will the Spring Canton Fair be called off?

Liu Changyu: Thank you for your interest in the Canton Fair. The Canton Fair is known to be an important platform for China鈥檚 foreign trade and opening-up and the barometer and indicator for China鈥檚 foreign trade. It receives wide attention and attracts numerous businessmen every year. Since the outbreak erupted, MOFCOM and Guangdong provincial government have been making preparations for the 127th Canton Fair as planned, while closely following the development of the epidemic to evaluate the impact and adjust the plans accordingly. Upon careful study, we decided to put off the 127th Canton Fair. We will work with related authorities and local governments to continue the preparation, and improve the working plans by taking into account outbreak control measures. We will update you on the new date once it鈥檚 settled. Thank you.

Hong Kong Commercial Daily: Since lots of foreign trade orders have been withdrawn due to the epidemic, what are the measures and plans of MOFCOM to preserve stability of foreign trade?

Liu Changyu: We have noticed that recently the NCP has been spreading faster in some countries and regions overseas. The downward pressure on global economy and trade increases substantially and uncertainty in the external environment for the development of China鈥檚 foreign trade continues to grow. The orders of goods for some foreign trade companies were also cancelled. Based on the study and judgement about the current changes in supply and demand, the key of the current trade policy adopted by the Chinese government is to keep the fundamentals of foreign trade stable. MOFCOM will act with firm resolve to implement the decisions and plans made by the Party Central Committee and the State Council and focus on the following work:
First, vigorously implementing policies to keep the existing investment stable. We will make every attempt to implement a series of policies and measures keeping foreign trade stable introduced by the State Council in recent years. In particular, export tax rebate, export credit insurance, export credit and other compliance policy tools introduced recently could help foreign trade companies, particularly micro, small and medium-sized foreign trade enterprises, to address risks, rising costs, financial strains and other outstanding issues.
Second, giving full play to the roles of new forms of business and models in trade to increase the investment. We would step up the efforts to create new forms of business and models in trade to fully leverage the special roles of cross-border e-commerce and market purchase trade in tackling the NCP and exploring diversified markets. We will offer support in building a number of high-quality overseas warehouses in relevant countries and particularly key markets. We would take measures to encourage companies to establish and improve international marketing networks in key markets.
Third, keeping improving the facilitation level for international trade and improving domestic business environment. We will continue to do more work after the WTO Trade Facilitation Agreement came into force by guiding companies in applying paperless import and export licenses, further improving custom clearance efficiency and offering more convenience in inspection, quarantine, custom clearance and other steps. We will further improve the public service offered by the government and industries. We would offer timely updates on the country-based information on trade and investment environment, country-based guidelines on outbound investment and cooperation and other market information. We would also support localities, industrial organizations and trade organizations in building public service platforms to offer services in international trade laws, information and trade promotion.
Fourth, enhancing international cooperation and improving international market environment. On one hand, we will work to establish working groups on unimpeded trade with relevant countries and try our best to make sure that all major trading partners have a working group to practically address outstanding issues in bilateral trade; on the other hand, we would establish a quick response mechanism, deepen international cooperation against the NCP and make sure that foreign trade industrial chain and supply chain operate smoothly. We will create a sound external environment for the exploration of international market by China鈥檚 foreign trade companies based on such work. Thank you!

Gao Feng: Due to time constraints, last question, please.

China Economic Net: The exhibition industry has been on hold due to the disease. The Canton Fair and other exhibitions scheduled before May are now either postponed or canceled. The central government calls for innovation in exhibition services. Some provinces and municipalities have released support policies for the industry. What policies and guidance will MOFCOM provide for the development of the exhibition industry?

Xian Guoyi: The exhibition sector plays an important role in developing a modern market and an open economy, as well as in economic growth, opening up, job creation and urban development, among others. Affected by COVID-19, exhibitions at home and abroad have been stalled basically, inflicting serious damage on the industry.
MOFCOM has worked on the following two areas in accordance with the central government鈥檚 requirement.

First, we have released and implemented supporting measures. In February, we published the Circular on Further Optimizing Administrative Services for International Economic and Technological Exhibitions, initiating no-contact paperless record filing and review process and fast-track channels for businesses. We make public and carry out probusiness policies and measures issued by ministries under the State Council in order to help companies make best use of them. We encourage and guide local governments to develop preferential policies in line with their conditions to support the exhibition industry and help them with disease response, assistance for businesses and other follow-up work. By far, more than 20 provinces or municipalities including Beijing, Shanghai and Tianjin have released policies to support the exhibition industry or small and micro businesses including those engaged in exhibitions.

Second, we have promoted innovation in exhibition models. Online exhibitions now can be held thanks to modern technologies of the Internet, big data and VR. New channels of marketing and business matching have been created as communications shift from face-to-face meetings to video calls. Some exhibitions now present services such as booking, flow management, and data tracking with the help of technologies. Exhibitors and buyers are able to exhibit, negotiate and sign contracts through live streaming platforms, third-party platforms or other cloud computing-enabled means. Since the outbreak of the disease, Beijing, Liaoning, Shanghai, Jiangsu, Zhejiang, Guangdong and other places have held multiple online fairs using modern technologies such as big data and face recognition, covering agriculture, lighting equipment, food, clothes, and hairdressing, among others. Transformation has been made from brick-and-mortar booths to virtual spaces.
The fundamentals sustaining steady growth of China鈥檚 economy will not change in the long run. The exhibition industry enjoys a solid economic foundation. Thus, the trend of long-term stable development of the exhibition industry will not change. Going forward, MOFCOM will continue to study and publish measures on innovating exhibition services and roll out good new models in accordance with the requirements of the central government. Thank you.

Gao Feng: This is the end of today鈥檚 press conference. We will actively respond to your other questions after the conference in an appropriate way. I want to thank two speakers, and friends from the press. Thank you all!

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