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Online Regular Press Conference of the Ministry of Commerce (April 16, 2020)

[Gao Feng]: Good afternoon, friends from the press. Welcome to the online regular press conference of the Ministry of Commerce. First, I would like to inform you about the identification of the first group of 12 national digital service export bases. 鈥冣

According to the requirements of the CPC Central Committee and the State Council on promoting the construction of digital service export bases, the Ministry of Commerce, together with the Office of the Central Cyberspace Affairs Commission and the Ministry of Industry and Information Technology, recently jointly identified the first group of national digital service export bases. Last July, the three ministries jointly launched the establishment of the national digital service export bases. Upon the joint recommendation of the provincial departments in charge of commerce, cyberspace, industry and information technology, through the procedures of material review and oral defense review by experts, and the comprehensive appraisal and publicity by relevant departments, 12 parks with good digital service export foundation, strong competitiveness and influence have become the first group of national digital service export bases including ZPark, Tianjin Economic-Technological Development Area, Dalian High-tech Industrial Zone, Shanghai Pudong Software Park, China (Nanjing) Software Valley, Binjiang Internet of Things Industrial Park of Hangzhou High-tech Zone, Hefei High-tech Industrial Development Zone, Xiamen Software Park, Qilusoft Park, Guangzhou Tianhe Central Business District, Hainan Resort Software Community, and Chengdu Tianfu Software Park. 鈥冣 鈥冣

The construction of the national digital service export bases is conducive to accelerating the development of China's digital trade and the application of digital technology, to fostering new forms and new models of foreign trade, and to accelerating the formation of new advantages in international competition, so as to promote the high-quality development of service trade.鈥冣

In the next step, together with the Office of the Central Cyberspace Affairs Commission and the Ministry of Industry and Information Technology, the Ministry of Commerce will organize the provinces and cities where the bases are located to formulate the implementation plan for the base construction, and study and issue specific supportive policies to speed up the digital transformation of service exports, to cultivate new participants in digital service exports, and to actively promote the expansion of the opening up of the digital service industry, striving to turn the bases into important carriers for China's development of digital trade and a cluster areas for digital service exports. 鈥冣 鈥br>鈥br>The above is what I want to release. Next, I would like to answer the questions from the media. The floor is open.鈥冣鈥br>

Xinhua News Agency: How have the total retail sales of consumer goods recovered in March, judging from available statistics?

Gao Feng: As the prevention and control of the domestic outbreak is showing progress recently, people are going outdoors more frequently, work resumption is on a steady rise, and markets are regaining their popularity, leading to a significant increase in market sales. The sales of 5,000 key retail enterprises monitored by MOFCOM rebounded by 15.8 percentage points in March than in February, and their daily sales grew by 3.1% in early April than in late March, showing further recovery of the domestic consumer market. Thank you.

MNI: The global supply chain has been disrupted by the sweeping pandemic across the world. Some countries, like the US and Japan, have claimed to relocate their businesses outside China. Will this impact China鈥檚 economy in the medium to long run?

Gao Feng: In the short term, the pandemic has indeed severely impacted the world economy and the global supply chain. Facing of the current situation, the whole world should enhance cooperation to safeguard key industrial chains including those for medical supplies. China is and will continue to be a stabilizing factor in this regard.

In the medium to long run, China鈥檚 economy is transforming from high-speed growth to high-quality development with growing momentum in growth driver shift and tremendous resilience, vitality, potential and flexibility. The fundamentals enabling sound economic development will remain unchanged. Thank you.

CGTN: Recent media reports claim that Japan鈥檚 economic stimulus package details funding which supports Japanese enterprises in their withdrawal from China. There鈥檚 also media coverage that on April 10, Larry Kudlow, White House鈥檚 chief economic adviser, said during an interview that the US would urge as many American companies to move back to the US as possible and that the US would 鈥減ay the moving costs of American companies鈥 What is your comment?

Gao Feng: We have noticed the reports you mentioned. Economy develops on its inherent course. The current landscape of the global industrial chain and supply chain comes as a result of the joint efforts and shared choices of businesses from all countries and is shaped by a wide range of elements in different economies, from the cost of factors to industrial systems and infrastructure. It is not built overnight and will not be easily altered at the random will of any individual or a single country.

Generally speaking, despite that the foreign-invested enterprises (FIEs) in China have been affected due to the pandemic, there has not been, and will not be, large-scale withdrawal of foreign investment. Foreign investors remain optimistic about China and they stay confident and determined to seek long-term operation and development in China. Our monitoring shows that the number of FIEs resuming work is steadily increasing. A survey that covered 8,700-plus key FIEs revealed that by April 14, 72.8% of them have resumed over 70% of their operation, 0.9 percentage points more than a week before. According to relevant surveys, 98% of the Japanese enterprises in southern China have resumed production, with 41.4% of them in full operation and 42.3% restoring more than 80% of their capacity, while Japanese enterprises in other regions have also made progress in work resumption. The fact that the production of Japanese firms first recovers in China effectively underpins their operation and stable development. Many of them have expressed their confidence in the Chinese market and their willingness to expand investment in China. According to AmCham China鈥檚 2020 Business Climate Survey, although American businesses in China are faced with problems such as the COVID-19 epidemic, China remains a key priority for most US-invested enterprises in the long run. AmCham South China鈥檚 special report on the impact of the COVID-19 outbreak shows that 75% of the interviewed companies will not change their re-investment plans in China regardless of the impact of the outbreak. These facts show that China remains as favorite destination for foreign investors.

The efficiency and security of the global supply chain can only be achieved with openness and cooperation. Facing this challenge shared by the whole world, China is willing to strengthen cooperation with all parties for the openness, stability and security of the global supply chain. Thank you.

South China Morning Post: It is reported that European governments are ratcheting up restrictions on the acquisition of pandemic-hit companies by foreign investors. Will China鈥檚 outbound investment be affected?

Gao Feng: We note that some countries have introduced regulations to strengthen foreign investment reviews. We hope that in adjusting their investment policies, the countries concerned can adhere to the principles of non-discrimination and transparency, fully consider the reasonable demands of investors, create an open and fair investment climate and boost global market confidence.
While supporting Chinese enterprises in investing overseas in line with market principles and international practices, the Chinese government also requires them to comply with relevant laws and achieve win-win results with their investment partners through commercial negotiations on an equal and voluntary basis. Thank you!

Phoenix TV: Some people argue that the pandemic will accelerate the process of 鈥渄e-globalization鈥 What is MOFCOM鈥檚 comment?

Gao Feng: Economic globalization is the compelling trend of our times that serves as a robust driver of world economic growth, eradication of poverty and the improvement of people鈥檚 well-being in all countries. At the same time, globalization presents new challenges for countries around the world.
The general trend of economic globalization is moving forward despite setbacks. The problems arising from globalization need to be addressed through cooperation and development. All countries should strengthen cooperation to adapt to and guide economic globalization to give full play to their respective advantages and achieve mutual benefit and win-win results in addressing the pandemic-inflicted challenges to the global economy.
In the face of the challenges, China will open still wider to the outside world, continue to liberalize market access, further expand imports, and promote trade and investment liberalization and facilitation in a bid to make its due contribution to the recovery and growth of the global economy. Thank you!

Economic Daily: Since the beginning of this year, some multinational companies have moved faster with their investment in China instead of suspending in the context of the pandemic. For example, retail giant Costco has announced that it will open its second store in mainland China in Shanghai. Toyota will invest in an electric car factory in Tianjin in partnership with FAW. Starbucks will invest $129 million in a global green coffee roasting plant in Kunshan, Jiangsu. How are these major projects going? Are there more to come?

Gao Feng: As far as we know, these foreign investment projects you mentioned are progressing well, so is the work on all fronts.
In accordance with the plans of the CPC Central Committee and the State Council, MOFCOM, together with relevant departments and localities, has established and improved special working mechanisms and set up records for key foreign-funded projects to help resolve difficulties and problems in the process of implementation and enhance the service and support for large foreign-funded projects. Thank you!

CNBC: How are FIEs resuming operation?

Gao Feng: As I said, the work and production resumption rate of FIEs is recovering steadily. Our survey of more than 8,700 major FIEs in China found that 72.8% of FIEs have resumed over 70% of production as of 14 April, up by 0.9 percentage points from last week. Thank you.

21st Century Business Herald: MOFCOM announced last week that the scope of prohibited items for processing trade will be narrowed to bolster the development of processing trade. What products are likely to be moved out of the category? By what criteria? Has MOFCOM collected statistics over processing trade companies that went bankrupt during the epidemic in Q1?

Gao Feng: The CPC Central Committee and the State Council places great importance on the development of processing trade. We are working with related authorities to implement the decision of the State Council executive meeting on 7 April to
narrow the scope of prohibited products for processing trade. 鈥br>鈥br>The specific products that will be adjusted will mainly be those that are not longer high-polluting, energy-intensive and resource intensive because of product upgrading and better energy saving technologies and those consistent with industrial development policies. We will consult with related authorities, local governments, industries and companies before we make the final decision.
The coronavirus pandemic has taken a heavy toll on global economy and given rise to more uncertainties and instabilities. The impact is most directly and quickly felt by processing trade, which faces squeeze in both demand and supply as both raw materials and final exports rely on overseas markets. Faced with such grave situation, we are working with related authorities and local governments on the implementation of the State Council policies to facilitate foreign trade financing, export credit, and export rebate to ease business burdens. We will also step up inter-agency and cross-regional coordination to help resolve difficulties confronting businesses in employment, logistics, customs clearance, order delivery with a one-on-one approach. We will build online and offline platforms to match supply and demand. Market diversification and domestic sales of goods originally processed for export are encouraged. We will work to help companies stay afloat, secure and fulfill orders, and stabilize industrial chains and supply chains. Thank you.

CBN: We noted that China has improved regulation on the export of medical supplies, including by strengthening quality inspection and sorting out the export order, but there are also concerns that the regulation will increase the time for export and that Chinese products do not meet quality standards. What鈥檚 your comment?

Gao Feng: The quality of anti-virus supplies is critical. In the global fight against the pandemic, the quality of anti-virus products must be strictly controlled, as their production and supply bear on the life and health of people in the virus-hit countries and regions.

The Chinese government takes the quality and safety of anti-virus supplies seriously. To support the international fight against the virus, China has taken many steps to strengthen inspection of exports and keep the export in sound order. The efforts have paid off and won recognition from the international community. I wish to stress that China has not and will not restrict the export of outbreak control supplies.

As far as we know, China Customs has taken active measures to speed up customs clearance and further improve the level of facilitation on the premise of ensuring the quality of exported materials for epidemic prevention. The Ministry of Commerce will strengthen joint efforts with relevant departments to rigorously crack down on low-quality commodities, breach of trust, and violations in accordance with law. We will make sure that each of such cases will be investigated, handled and reported once they are found. Under this zero tolerance policy, we would effectively protect the quality and safety of exported materials for epidemic prevention. At the same time, we hope that the governments and purchasers of relevant countries will choose products certified by Chinese regulatory authorities and produced by qualified enterprises, fully communicate with Chinese enterprises about product standards and other information, and carefully check what products are used for and their instructions in use. In particular, they would need to prevent non-medical protective products from being used for medical purposes. Thank you!

Hong Kong Commercial Daily: What are the difficulties involved in integrating domestic and foreign trade? How does MOFCOM help companies sell goods intended for export on the domestic market?

Gao Feng: At present, the epidemic has exerted a serious impact on the global economy, with external demand shrinking and some foreign trade production capacity turning to the domestic market for sales. According to research, due to the difference between domestic and foreign market environment, foreign trade enterprises mainly face the following difficulties in expanding the domestic market, to be more specific: First, it is difficult to expand sales channels. Foreign trade exports are mainly order-based. After turning to domestic sales, as some enterprises lack sales channels and are not familiar with the rules of market access, sales, settlement, etc., it will be more difficult for them to secure domestic orders. Second, it is difficult to adapt the production line. As domestic and foreign standards are not the same, foreign trade products turning to domestic sales need to be adjusted and adapted to domestic standards before they hit the domestic market. As the design, technology and style of some foreign trade products belong to foreign customers, it is necessary to obtain their IPR authorization for domestic sales. Third, it is hard to build brands. After foreign export enterprises turn to domestic sales, it would be difficult for their less-known self-owned brands to gain access to good domestic retail channels.

While taking a series of vigorous measures to stabilize foreign trade, MOFCOM will also help foreign trade enterprises to explore the domestic market. First, we will reduce the cost of domestic sales for businesses. We would work with the relevant departments to temporarily exempt the interest of holdover tax on domestic sales of processing trade till the end of the year and expand the pilot program for selective collection of taxes on domestic sales to all comprehensive bonded zones, in order to help reduce the burden for enterprises to expand domestic sales. Second, we will increase support for domestic sales. We will guide localities and various chambers of commerce and associations to publicize policies and match supply and demand to support foreign trade enterprises in developing the domestic market. We will further expand the project featuring 鈥渟ame production line, same standard and same quality鈥for products sold in domestic and foreign markets, and speed up the improvement of relevant public information services. Third, we will make good use of platforms matching production and sales. We will organize the China Processing Trade Products Fair and other specialized exhibitions, establish platforms of exhibition and exchange to serve products for domestic sales, and help foreign trade enterprises and domestic buyers strengthen connections and talk to make transactions. We will help match supply and demand for domestic sales of export products through platforms of consumption promotion. Fourth, we will broaden online cooperation channels. We will guide foreign trade enterprises to strengthen cooperation with large domestic e-commerce platforms to explore the domestic market, display high-quality export products online and offline at the same time, expand the scale and build brands for domestic sales to better meet domestic consumer demand. Thank you!

Gao Feng: This is the end of today鈥檚 press conference. Thank you.

(All information published in this website is authentic in Chinese. English is provided for reference only. )

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