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Online Regular Press Conference of the Ministry of Commerce (April 2, 2020)

Gas Feng: Friends from the press, good afternoon. Welcome to the Ministry of Commerce鈥檚 online press conference hall, and to join us at today鈥檚 regular press conference. Today, we have invited Mr. Wang Bin, Deputy Director General of the Department of Market Operation and Consumption Promotion, Mr. Liu Changyu, 2nd Level Inspector of the Department of Foreign Trade (Deputy Director General level) and Mr. Yang Zhengwei, Deputy Director General of the Department of International Trade and Economic Affairs of the Ministry of Commerce, to our conference. I am Gao Feng, the spokesperson.
Today, we have no information to release on our own initiative. We will take questions from our friends from the press directly. The floor is now open.

The Global Times: Dutch media say that some Chinese-made masks used by frontline medical staff at some hospitals in the Netherlands were recalled because they were 鈥渦nqualified鈥 What is the response from China?

Liu Changyu: We have taken note of the recent reports in the Dutch press. The Ministry of Commerce attaches great importance to this and verified with the local commerce authorities and relevant exporters immediately.

Based on relevant information, we have learned that the masks purchased by the Dutch company from the Chinese company in question were non-medical personal protective masks. The company concerned made this clear when they exported these masks. Non-medical masks cannot be used for medical purposes, nor can they be used to protect the medical workers working in the intensive care unit.
The Chinese government has always attached great importance to the quality and safety of medical supplies, and places related products under stringent management. During the special period of COVID-19 prevention and control, in order to further strengthen the export quality control of medical supplies, and standardize the export order, the Ministry of Commerce, in conjunction with the General Administration of Customs and the National Medical Products Administration, issued a notice that the exports of relevant medical products must obtain a certificate of registration of medical device products in China and conform to the quality standards and requirements of the importing country (region).
The quality and safety of medical supplies is directly related to human life and health. We hope that foreign purchasing parties could choose the suppliers registered with China鈥檚 medical products administration, conduct the corresponding quality inspection before using the product, and use the product in strict accordance with the scope of application and operating procedures. Should problems arise in the course of purchasing and use, it is recommended that the enterprises on both sides should properly negotiate and resolve them under commercial principles. We are ready to work with the international community to create a favorable environment for the orderly export of medical supplies and to better support the global fight against the global COVID-19 pandemic. Thank you!

Economic Daily: The recent changes in the food export policy of some countries has raised concern among domestic consumers. In some places, people flocked to the market and bought large quantities of food. How is food supply in China? Will there be a shortage of supply and price increases?鈥br>
Wang Bin: China is the world鈥檚 largest producer and consumer of food. President Xi Jinping has repeatedly stressed that the Chinese people鈥檚 rice bowls must be firmly held in their own hands at all times. The CPC Central Committee and State Council attach great importance to food production and supply, and have introduced a series of policy measures to support agricultural development, such as increasing the construction of public infrastructure in rural areas, promoting pilot food insurance, and adjusting and improving grain purchase prices.
China has had many consecutive years of bumper grain harvests. Our stockpiles are abundant, reserves sufficient and long-term prices stable. The international market has little impact on our food supply. In 2019, China鈥檚 total grain production reached 664 million tons, which was 0.9% higher than in 2018. It was the highest level in history, marking 鈥6 consecutive years of bumper grain harvests鈥 According to the Ministry of Agriculture, food production in 2020 is improving generally, the seedling situation for the summer grain crops is better than usual, and a good harvest is expected; the planting area of early rice has expanded, providing a basis for increased yields, and the autumn crops purchase price has been determined in advance and has continued to rise. During the epidemic, China has kept introducing policy measures to support agricultural production. There is a high probability that we will have a bumper harvest this year.

China鈥檚 average annual grain consumption is more than 200 million tons. In 2019 the stock of China鈥檚 three primary grains, namely wheat, corn and rice, was more than 280 million tons. China is fully self-sufficient in grain and will not face domestic food shortage even if there is no import. China鈥檚 food imports mainly include soybeans, coarse grains and other feed grains, whereas imported rice and wheat account for only 1 per cent and 2 per cent of total domestic consumption respectively, and are imported mainly for crop variety swap and redistribution purposes. Experts believe that there is currently overall surplus in global food supply, the world food supply is running at a low level, but the structural contradictions between supply and demand are prominent. Relevant countries imposed export bans to primarily meet domestic food demand, and most food-exporting countries may not necessarily follow suit.
Since the outbreak of COVID-19, under the strong leadership of the CPC Central Committee and State Council and the unified deployment of the State Council鈥檚 joint prevention and control mechanism, the Ministry of Commerce, together with the relevant localities and departments, has perfected the working mechanism, identified a number of backbone enterprises to ensure supply, guaranteed the sources of food supply, opened up channels for distribution and transportation, and strengthened the links between producers and sellers; there is an adequate supply of rice, flour and edible oil in the wholesale and retail markets throughout the country, and prices are stable. With food producing and processing enterprises getting back to work, production capacity is abundant. There is absolutely no need for consumers to worry about food shortages or sharp price increases, and no need to rush to buy in bulk and stock up on food at home.鈥僒hank you!

China Business News: Against the backdrop of the global pandemic, the G20 trade and investment ministers held an extraordinary virtual meeting, which caught the attention of the international community. What are the outcomes of this meeting and what are the implications for the fight against the pandemic?

Yang Zhengwei: On March 30, the G20 trade and investment ministers held an extraordinary virtual meeting to deal with the COVID-19 outbreak, focusing on the implementation of the Extraordinary G20 Leaders鈥Summit consensus, and to discuss the impact of global COVID-19 pandemic on the world economy and trade, the maintaining of supply chain stability, the promotion of trade development and other issues.
At the meeting, the Chinese side resolutely implemented the spirit of President Xi Jinping鈥檚 speech at the Extraordinary G20 Leaders鈥Summit on COVID-19 and pushed for trade and economic cooperation to fight COVID-19 under the G20. Minister Zhong Shan made a three-pronged proposal to all parties: first, strengthen international cooperation on epidemic prevention materials and jointly safeguard the lives of all peoples and medical workers; second, maintain the stability of the global industrial chain and supply chain by actively adopting measures to reduce or eliminate tariffs, remove barriers and ensure unimpeded trade; and third, maintain an open and cooperative global environment, keep markets open, safeguard the multilateral trading system and reject protectionism. China鈥檚 statement was generally welcomed and supported by other members.
The meeting issued a joint statement of the G20 trade and investment ministers on COVID-19, which includes, first, a commitment to ensure the continued flow of vital medical supplies and equipment, critical agricultural products and other essential goods and services across borders, and to ensure the availability and accessibility of essential medical supplies and pharmaceuticals at affordable prices, on an equitable basis, where they are most needed, and as quickly as possible. The second is to keep markets open and ensure a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment. Third, not to create unnecessary barriers to trade or disruption to global supply chains, and notify the WTO of any trade related measures taken to enhance transparency. The fourth is to ensure smooth and continued operation of the logistics networks and to explore ways for logistics networks via air, sea and land freight to remain open, as well as ways to facilitate essential movement of health personnel and businesspeople across borders. Fifthly, to express our concern and support for vulnerable developing and least developed countries affected by COVID-19, to assist micro, small and medium-sized enterprises, and to recognize the importance of strengthening international investment. Sixth, to continue monitoring and assessing the impact of the pandemic on trade, and to call on the international organizations to provide an in-depth analysis of the impact of COVID-19 on world trade, investment and global value chains.
At present, the global spread of COVID-19 has severely impacted global trade and investment, and the pandemic itself and the decline in trade and investment have become global challenges. The forging of the above consensus is of great significance in that it can help the international community strengthen cooperation and coordination, adopt open trade and economic policies, mitigate the impact of the pandemic on global supply chains, ensure the normal flow of international trade and investment, and lay the foundation for a strong economic recovery and sustainable, balanced and inclusive growth after the crisis. Going forward, we will implement the consensus reached at Extraordinary G20 Leaders鈥Summit and this trade and investment ministers鈥meeting, strengthen international coordination and cooperation on the trade and economic front, and make a positive contribution to the fight against the pandemic, the resumption of world trade and investment growth and the building of a community with a shared future for mankind. Thank you!

[Xinhua News Agency]: The Political Bureau of the CPC Central Committee proposed in its March 27 meeting to expand household consumption, stimulate consumption of physical goods, and keep the current momentum in online consumption. May I ask the Ministry of Commerce what general considerations and specific measures it has in place to promote consumption?

[Wang Bin]: Consumer spending expansion is critical in our efforts to address the epidemic impact and maintain stable and healthy economic and social development. MOFCOM is following through with the decisions and plans of the Party Central Committee and the State Council to balance epidemic prevention and control with economic and social development. It is working hard to implement the decisions of the Central Economic Work Conference and the series of targeted policies recently introduced. In particular, it has given priority to consumption and stable growth of foreign trade and foreign direct investment and kept working on the initiative to upgrade consumption. Committed to these issues, the MOFCOM leadership has held a number of meetings on how to implement the above decisions. MOFCOM has worked with other ministries to jointly put forward policies to encourage consumption and issued a series of guidelines. We have held video and telephone conferences, mobilized the whole commercial system throughout the country, and guided local governments and enterprises to focus on the following areas:

First, business activity resumption. With geographical categorization and grading as well as targeted policies, we have encouraged local governments to rekindle the economy with clear focus in an orderly manner, while ensuring adequate epidemic control measures. Business centers and markets should be reopened. The consumer services industry should resume their normal business. We have worked together with other departments to strengthen the relief policies for enterprises, rekindle the market vitality, and promote consumption in physical stores. We strive to keep the booming new-type online consumption, and fully activate the consumer market.

Second, urban consumption. We have expedited the transformation and upgrading of pedestrian streets and promoted the building of smart pedestrian streets. In our efforts, we have guided pilot pedestrian streets to adopt their own policies and measures to attract visitors and revive market prosperity on the street. We have designated a number of national model pedestrian streets and added a number of pilot pedestrian streets, and introduced more targeted policy measures. We have pushed for the landing of policies for brand convenience store chains, with beefed-up planning and guidance. In deepening the reform of delegating power and improving regulation and service, we have improved the retail commercial network and the layout of convenience stores and wet markets to encourage consumption at the community level. We have also fostered cities as the international consumption centers.

Third, rural consumption. We have been moving faster in introducing e-commerce into the countryside by expanding its coverage and sales network in the last mile. We have made smooth the flow of agricultural products into the city and that of industrial products to the countryside. We have improved the backbone network of agricultural products distribution, built new supply chains for agricultural products, in order to promote the sales of agricultural products. We have pressed ahead with the construction of facilities for sorting, processing, packaging, pre-cooling, pre-storage and distribution of agricultural products. We worked hard in poverty reduction by connecting production and marketing, by e-commerce, and by consumption. We have done whatever we can to prevent and solve stagnant sales of agricultural products.

Fourth, commodity consumption. We have been working hard with the landing of the policies and measures announced by the Party Central Committee and the State Council. We have further promoted a shift in our automobile policy from limiting purchase to guided use, and improved policies and regulations on the scrapping of motor vehicles and the circulation of used vehicles, so as to release the space for automobile consumption. We have supported local governments in formulating reward and subsidy policies to promote the consumption of green and energy-saving home appliances, furniture and other products. We will make the third CIIE a success, by expanding imports and adding to the domestic market supply.

Fifth, service consumption. We have worked to revitalize consumption in the catering and accommodation industry by building 鈥済reen鈥restaurants, guiding enterprises to improve safety and health management capabilities, and advocating individual serving and the use of serving spoons and chopsticks in order to rebuild consumer confidence. We have introduced a community consumer service initiative to guide high-quality development of consumer services at the community level throughout the country. For the development of domestic service industry, we have worked to expand its supply and improve its quality.

Sixth, new types of consumption. In promoting the close integration of online and offline commerce, we have supported the development of online and platform economies, encouraged physical retail to go digital, and promoted the popular application of new patterns, models and scenarios of consumption. We have supported central cities in building 鈥渇irst-store鈥and 鈥渇irst-launch鈥economies and promoting the development of boutique-store economy.

Seventh, consumer market invigoration. We have guided localities in organizing activities for the "month of consumption promotion" under the theme of 鈥減reventing epidemic, ensuring supply and promoting consumption鈥 combined with online and offline activities, and making the 鈥渙nline shopping festival for brand and quality products鈥bigger and better. We have guided qualified regions and enterprises to introduce consumer coupons, shopping coupons and vouchers for specific groups, commodities and areas, in compliance with relevant laws and regulations and on the premise of fairness and openness, in order to promote a rebound consumer sentiments and consumption.

Eighth, consumption environment. Together with other departments, we have offered guidance to local governments who have urged service enterprises to fully implement their primary responsibility of epidemic prevention and control, for consumer safety in their premises. We have further improved the consumer credit system, regulation on the circulation industry and the consumer environment. Thank you!

[Shanghai Securities News]: Recently, there is news that some food exporting countries, such as Vietnam, have imposed restriction on grain exports due to the epidemic. May I ask the Ministry of Commerce to comment on this? Can you share with us about China's grain imports and exports in recent years? Can China be self-sufficient in grain supply?

Liu Changyu: We have taken note of the temporary ban on rice exports imposed by Vietnam and other countries. As Covid-19 is spreading around the world, we hope that all countries will join hands to maintain normal international trade and smooth logistics.

In recent years, the Chinese Government has implemented a proactive import policy to increase imports of food and agricultural products, including cereals, to meet the growing demand for better products. According to China's customs, China imported $149.9 billion of agricultural products in 2019, up 9.3 percent year-on-year; and exported $78.6 billion of agricultural products, down 0.9 percent year-on-year. Among them, imported grain reached 10.47 million tons and exported grains 2.76 million. The net grain imports accounted for only about 2 percent of national production and consumption. The main purpose of imports is to improve variety in grain types and transfer between different regions.

As Mr. Wang Bin has just introduced, China has bumper harvests for grain production year after year. We have abundant stocks and sufficient reserves. China is fully capable of realizing food security. Thank you.

[21st Century Business Herald]: Due to the epidemic overseas, Bosch and other European and American factories have shut down production, China's auto industry reliant on imported parts and components are exposed to the risk of supply disruption and even shutdown. How should we address this issue?

Liu Changyu: With the international spread of the epidemic, some automobile manufacturers and suppliers of parts and components in the Europe and the United States are affected to varying degrees. In the context of globalization, the international division of labor in the industrial chain is becoming increasingly close. The automotive supply chain is complex and vast, with thousands of categories. The lack of one key component can put the entire production to a stop. China is a major automobile manufacturing country and an important global production base for auto parts and raw materials. Every year, there is a large amount of import and export in auto parts and components. The spread of the epidemic overseas will inevitably have an impact on China's auto trade and supply chain.

Under the strong leadership of the Party Central Committee and State Council, China has fully resumed automobile and parts production, easing the pressure on the automobile supply chain. In particular, on March 31, the State Council also introduced three measures鈥攅xtending subsidies for the purchase of new energy vehicles and exemption from purchase tax for two years; support for key areas such as Beijing, Tianjin and Hebei to phase out diesel trucks with the National III and below emission standards; and reduce the value-added tax rate on the sale of used vehicles by used car dealership enterprises. This will certainly further boost car consumption and mitigate the epidemic impact on the automotive supply chain.

MOFCOM, together with other departments, are closely watching the current problems in the automotive supply chain. We have guided Chinese automotive enterprises to step up monitoring on the production and supply of overseas suppliers, increase orders and inventories, formulate alternative plans and make production more reasonable. At the same time, we have improved customs clearance and logistics facilitation to ensure smooth import channels for core automotive parts, raw materials, and equipment for research and development, production and testing equipment.

We are ready to join hands with other countries, while combating the epidemic together, strengthen international cooperation and make every effort to maintain the stability of the global automotive industrial chain and supply chain and minimize the adverse impact of the epidemic on the entire industry. Thank you.

CNR Finance: On Mar. 30th, the State Council Executive Meeting considered and approved policy measures to stabilize and expand automotive consumption. What鈥檚 MOFCOM鈥檚 plan to implement these measures?

Wang Bin: The automotive industry is a major pillar of the national economy. With its significant weight in the total retail sales of consumer goods, huge potentials and great spillover effect, it鈥檚 one of the key areas for expanding physical commodities consumption and promoting consumption upgrade. In 2019, the retail sales of automotive products above a designated value reached RMB 3.9 trillion or 9.6% of the total retail sales of consumer goods.Automotive and related industries contributed around a tenth of national tax revenues and employment. One automotive job can at least create seven jobs in related industries.
Due to multiple factors, China鈥檚 car sales have fallen for two consecutive years. In 2019, 25.769 million new cars were sold, down by 8.2% year-on-year. COVID-19 has increased the pressure on car sales. In Jan.and Feb.2020, sales were down by 42%. As the virus spreads rapidly across the world, the development of the auto industry may be further impacted.
The CPC Central Committee and the State Council are paying high attention.A few days ago, the State Council Executive Meeting considered and adopted policy measures such as promoting new energy vehicle consumption, cutting the value added tax rate for secondhand car dealers, and encourage the scrap of outdated diesel trucks. The introduction of these measures is prompt, timely and effective, which will address key nodes of auto consumption like new cars, used cars, and scrap vehicles. Crystallizing social consensus, these measures can help stabilize auto development and employment, accelerate unleashed and compensatory consumption, and forge a robust domestic market.
Upon media release, these measures met with high attention and warm responses from the public.The industry widely believes that they can not only counter the adverse impact of COVID-19, but will also resolve bottlenecks that long constrained the development of the industry. In particular, the reduced VAT of 0.5% on sales for used care dealers is a milestone for the industry. It will promote the scale, specialization and branding of the used car market and help encourage tax payments and expand tax base through industrial support, and thus increase fiscal revenues. This will further unleash used car consumption, create greater market space for new car consumption, and drive services such as car parts, repair, and insurance.
Moving forward, MOFCOM will follow up on the decisions and plans of the CPC Central and the State Council in earnest, and work actively with related departments to implement related policy measures, accelerate the reform of deregulation, balanced regulation and improved services, promote and stabilize new car sales, push related localities to relax or remove car purchase restrictions, continuously improve car use environment, speed up revising the Administrative Measures for Used Car Circulation, invigorate the used car market, work out the Implementing Rules for the Administration of the Recycle of Scrap Vehicles as soon as possible, promote the scrap and replacement of old cars to continuously unleash auto consumption potentials. Thank you.

CNBC: What is the business reopen rate of trade companies in China?

Liu Changyu: Since the outbreak of COVID-19, MOFCOM has determinedly implemented the decisions and plans of the CPC Central Committee and the State Council, monitored overseas outbreaks and world economic situation, introduced a host of measures with targeted and concerted efforts to fully support the return to business and production of trade companies.
Under the able leadership of the CPC Central and the State Council and the joint efforts of localities and related departments, the reopen rate of foreign trade companies keep improving. According to statistics, as of Mar. 30th, 75.6% of national key trade companies reported over 70% in reopen rate. The figure was up by 4.2 percentage points on last week.Over 50% of the trade companies in Hubei also have a reopen rate of over 70%. These results are hard-won, fully illustrating the multiple and pronounced advantages of the national governance system under the socialist system of Chinese characteristics while proving the resilience of Chinese foreign trade companies in the face of a crisis.We have the confidence to overcome current difficulties and challenges, coordinate epidemic prevention and control with economic and social development and do what we can to stabilize the base of foreign trade. Thank you.

Gao Feng: Time鈥檚 running out. Last question, please.

CBN: The global pandemic is posing big challenges to global supply chains, whose stability and resilience are receiving more attention. What do you make of the impact of the outbreak on global supply chains? How can China further enhance the competitiveness of its industrial and supply chains?

Liu Changyu: As we speak, COVID-19 has spread to over 200 countries and regions in the world. Many countries are taking extraordinary measures to stem its further spread. Inevitably, global supply chains have come under pressure. Faced with the pandemic shock, the stability of global industrial and supply chains is significant not only for winning the battle against the virus, but also for avoiding a world economic recession.
In view of the pandemic鈥檚 impact on global industrial and supply chains, I think that working in the following areas is key.
First, we will strengthen general trade. Featuring whole industrial chains, long supply chains, broad industrial scope and big employment, general trade is a core indicator of trade competitiveness. Over the years, MOFCOM has vigorously optimized trade mix and raised trade competitiveness under the overarching goal of 鈥榝ive optimizes and three develops鈥 with good effect and the percentage of general trade raising to 60.5% from 46.2% in 2008. Moving forward, MOFCOM will continue to take effective measures to solidify traditional advantages in trade, foster new strengths in trade such as technology, quality, branding and services, cultivate big businesses with global competitive advantages, dynamic, innovative, specialized SMEs that excel in collaboration, international marketing networks of strong penetration, trade platforms of international profile and influence, and home-grown trade brands to continuously enhance the competitiveness of Chinese manufacturing in global industrial and supply chains.
Second, we will stabilize processing trade. Policies will be vigorously implemented and companies guided and helped to make full use of policies. New policies will be introduced continuously to raise the technology content and value added of processing trade. We will push processing trade from assembly towards technology, branding and marketing, and fuse its production and manufacturing with services trade. We will support Central and Western China and the Northeast to undertake relocated industry for coordinated regional development. We will support processing trade businesses to explore domestic market for integrated development of domestic and foreign trade.
Third, we will consolidate bases for foreign trade transformation and upgrade. Foreign trade bases are industrial clusters featuring R&D, production, marketing and public services, with a unique role in enhancing and extending supply chains. In recent years, MOFCOM sees these bases as key vehicles of foreign trade transformation and restructuring, with over 400 distinctive bases for agricultural products, light industry, textiles, hardware and construction materials, and electrical and machinery products. Moving forward, MOFCOM will continue to step up work in this regard and strengthen ministry-province cooperation and linkage for policy synergy to further stabilize industrial chains and basis and lay a solid foundation for improved international competitiveness of industrial and supply chains.

Gao Feng: This concludes today鈥檚 press conference. We鈥檒l actively respond to other questions of interest to the media through appropriate means. Thank you to the three speakers and members of the press. Thank you.

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