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Regular Press Conference of the Ministry of Commerce (December 2, 2016)
  

MOFCOM held regular press conference on December 2, 2016. Spokesman Shen Danyang answered questions concerning the hotspot issues from the media at home and abroad. The record is as follows:

1.It is heard that the widely-watched RCEP will hold the 16th round of negotiations in Indonesia in early December. Could you please brief us on the progress of the negotiations so far and the priority issues on the agenda of this round?

Answer: Since launched in 2012, RCEP has undergone 15 rounds and now entered substantive negotiations. On November 3 and 4, the RCEP ministerial meeting was held in Cebu, Philippines. At the meeting, the parties reiterated their leaders鈥instructions of concluding the negotiations at an early date, comprehensively evaluated the current progress of the negotiations, and offered strategic guidance on three core aspects: trade in goods, trade in services and investment. According to the plan, the 16th round will be held from December 2 to 10 in Indonesia. All parties will actively press ahead with the negotiations on all aspects to create conditions for an early conclusion.
銆BR>RCEP was launched at the initiative of ASEAN, and ASEAN plays a central and dominant role in RCEP negotiations. As an active pusher of RCEP, China, on the basis of fully respecting the core status of ASEAN, will work closely with the negotiating parties to endeavor to finish the negotiations at an early date and make contributions to the economic integration of the Asian-Pacific Region.

2.It was reported that recently during Lao Prime Minister Thongloun Sisoulith鈥檚 visit to China, the two countries signed China-Laos Joint Development Master Plan (Outlines) for Mohan 鈥Boten Economic Cooperation Zone. Please introduce to us what the master plan is about.

Answer: China and the Laos are friendly neighbors. To boost trade and economic cooperation is one of the priorities of Lao Prime Minister Thongloun鈥檚 visit to China. On November 28, under the witness of Premier Li Keqiang and Prime Minister Thongloun, Chinese Minister of Commerce Gao Hucheng and Lao Minister of Planning and Investment Souphan singed the China-Laos Joint Development Master Plan (Outlines) for Mohan 鈥Boten Economic Cooperation Zone.

To build China-Laos Mohan 鈥Boten Economic Cooperation Zone is an important issue of common interest to the heads of state of both countries. The economic cooperation zone will be an important move and part of the early harvest of the Belt and Road initiative, as well as a feat of bilateral commercial cooperation in the new era. To build the zone according to the master plan will not only deepen China-Laos comprehensive strategic partnership of cooperation and boost the economic and social development in the border regions, but also play an important role in improving the livelihoods of the peoples of the two countries.

Formulated on the principles of 鈥渁chieve synergetic development through mutually beneficial cooperation, achieve innovative development through pilot programs, achieve green development through eco protection, achieve science-based development through market-oriented operations鈥 the master plan fully reflects the regional advantages and characteristics of China-Laos cooperation. In terms of spatial layout, building on the development foundation of China-Laos cooperation zone and the conditions of transportation, industrial clusters on comprehensive services, bonded logistics, trade, finances and tourism will take shape, along the Kunming鈥揃angkok Highway and China-Laos railway regions with Mohan and Boten international trade and financial districts as the two centers. In terms of industrial development, the comparative advantages of the two sides will be put into full play. The Chinese part of the zone will focus on headquarters economy, while the Lao part will give priority to processing and manufacturing industries. In the meantime, cooperation on trade, modern logistics and tourism will be strengthened to form an interactive industrial development pattern featured by high degree of integration and complementarity. In terms of infrastructure, railway, road and airports as well as other transportation infrastructure related to the cooperation zone will be constructed. At the same time, municipal infrastructure in the zone such as water supply, sewage and waste treatment and power supply will also be built to strengthen hardware support. In terms of safeguard measures, major issues related to the construction of the zone will be coordinated and resolved under the framework of the Joint Steering Council of China-Laos Cooperation Zone.

At the moment, China-Laos commercial cooperation enjoys sound momentum. In 2015, bilateral trade value reached US$ 2.78 billion. In the first ten months of this year, bilateral trade value topped US$ 1.82 billion. China is the biggest contributor of foreign aid to Laos, as well as its No.1 source of foreign investment and the second largest trading partner. Laos is China鈥檚 3rd biggest investment destination among ASEAN countries. The two sides are also engaged in close cooperation on infrastructure, human resources and regional and sub-regional cooperation. The national convention center, national cultural center and other projects that were built with China鈥檚 assistance in Laos have become local landmarks, and are widely praised by the Lao people.

We believe that the master plan signed by the two sides will help strengthen and regulate the commercial cooperation in the border regions of the two countries, and further promote the prosperity and stability of the border regions.

3. At the G20 Summit in September, countries were calling for the establishment of a global forum on steel overcapacity. What is the progress on that front?

Answer: The G20 Hangzhou Summit Communiqu茅 called for the establishment of a global forum on steel overcapacity in order to strengthen information sharing and cooperation. The forum may be assisted by the OECD, and participated by G20 members and interested OECD members. In order to implement the Hangzhou Summit consensus, China as the G20 Presidency for 2016, has been engaged in close communication with all parties and making active preparations for the forum since September.

On 15 November, China, as the G20 Presidency, convened a meeting in the name of G20 Trade and Investment Working Group for G20 members and interested OECD members in Beijing to discuss the preparation for establishing the forum. The meeting focused on an in-depth discussion about the Terms of Reference of the forum. We were delighted to see that thanks to the concerted efforts of all parties, the meeting adopted a preliminary draft of the consolidated views of all parties regarding the forum鈥檚 Terms of Reference. Such positive progress in the preparation of the forum has provided a solid foundation for the work ahead.

On the basis of the discussions in the Beijing preparatory meeting and the feedback suggestions from the members after the meeting, the Chinese side on 24 November circulated to the members of the forum the draft of the Terms of Reference for the forum. At present, the parties are conducting intensive consultations on the draft, and China looks forward to working together with all parties to complete the Terms of Reference as soon as possible, and, on this basis, convene the first meeting of the forum.
銆BR>4. Recently, the German Embassy in China and the German Chamber of Commerce in China jointly published the Business Confidence Survey 2016 of German Enterprises in China, which reveals that less than 50% of the German companies believe that China's economic reform can have a positive impact on the investment environment, while 1/3 of the German enterprises say they are not as welcome in China as they were in the past. What is the response of the Ministry of Commerce to this?
銆BR>Answer: It is understood that most of the German companies participating in the survey are from the mechanical engineering, automotive and service industries, and that due to increased labor costs, lack of professional talent and rising competition from their Chinese peers, some of them find that their business operations are not as successful as before, their confidence is not high, and they are not as welcome as before. In short, some enterprises are not as optimistic as they were in the past because their business operations encountered some difficulties, and this is understandable. However, I also note that the survey also showed that 70% of the respondents believe that next year's performance will remain or exceed the level of this year, and 90% of the companies say that they do not intend to leave China. This shows that the vast majority of German enterprises are still confident in the China market. I have seen that the EU Chamber of Commerce in China recently released a Business Confidence Survey 2016 report, which also shows that more than 2/3 of the EU investment enterprises in China have gained profits and nearly 1/2 of the enterprises plan to expand operations in China. Based on our data, multinational companies from the European Union are generally optimistic about investing in China. In the first 10 months of this year, EU-28 investment in China increased by 41.5% in real terms, while investment from Germany increased by 86%. There are many large capital- and technology-intensive projects, and many investors are well-known multinational companies including Volkswagen, BMW, Audi, Daimler and BASF. The substantial increase in these enterprises鈥investment in China shows that multinational companies, including those from Germany, are determined to stay in the China market for the long term.
銆BR>In fact, the Chinese government's effort in improving the investment environment is gaining more and more recognition and positive comments from all over the world. AmCham China鈥檚 survey shows that more than 60% of its member companies list China as one of the top three global investment destinations, and 68% have plans to expand their investments in China. UNCTAD's World Investment Report 2016 also shows that China still remains one of the world's most attractive investment destinations. Some time ago, participation of multinational companies was good, be it at the B20 Summit in Hangzhou or the China International Fair for Investment and Trade in Xiamen, showing that multinationals are confident about investing in China.

Therefore, we hope that foreign-funded enterprises can view China鈥檚 investment environment in an objective and correct manner, continue to shore up their confidence in investing in China, seize the opportunity of China's economic transformation and upgrading, continuously expand investment in China, and strive to achieve better business performance.
銆BR>5. It is said that the Ministry of Commerce is deploying a special campaign to speed up innovation in domestic trade and circulation, promote supply-side structural reform and expand consumption. What are the key measures of this special campaign?
銆BR>Answer: Since the beginning of this year, domestic consumer market has been generally stable while upgrading of consumption structure has accelerated. The contribution of consumption to economic growth has further increased. It is expected that consumption will continue to grow steadily as industrialization and urbanization accelerate, the middle-income population grows and industrial structure upgrades. In this regard, promoting supply-side structural reform through innovation in domestic trade and circulation has a big role to play in meeting consumer demand and promoting the steady growth of consumption.
銆BR>To this end, in August this year, the Ministry of Commerce held a national teleconference to deploy the efforts to promote supply-side structural reform through intensified innovation in domestic trade and circulation. Vice Premier Wang Yang delivered an important address at the meeting and put forward clear instructions. In accordance with the spirit of the teleconference, the Ministry of Commerce has recently issued a special campaign to speed up innovation in domestic trade and circulation so as to promote supply-side structural reform and expand consumption, along with the "13th Five-Year Development Plan for Domestic Trade and Circulation" and the "2025 Action Plan for Circulation in China" it recently formulated. The Ministry plans to focus its effort on the following four aspects:
銆BR>First, led by innovation, efforts should be made to cultivate new driving forces for consumption development. Circulation enterprises should be actively guided to bolster the weak spots, increase the advantages, promote integration and establish systems and mechanisms that promote innovation in circulation. Stocktaking of circulation innovation experience should be carried out in a timely manner.
銆BR>Second is to build a new mechanism for expanding consumption using reform as a driving force. Efforts should be made to further promote the streamlining of administration and delegation of power, combine delegation with supervision, optimize services, and do a good job in sharing the experience of the comprehensive pilot programs for domestic trade and circulation system reform and development.

Third is to create new conditions for consumer supply based on circulation infrastructure. Efforts should be made to strengthen the category-specific guidance over non-profit, low-profit and market-oriented circulation infrastructure, and coordinate the distribution of circulation infrastructure between urban and rural areas and among different regions.
銆BR>Fourth is to establish a new order in the consumer market based on the environment. Efforts should be made to improve the laws and regulations concerning domestic trade and circulation, increase the crackdown on IPR infringement and counterfeiting, promote comprehensive business law enforcement, strengthen the development of business credit, and improve the traceability system for important products.

6. MFPCOM published on its website yesterday the Guiding Opinions on Promoting International Cooperation to Strengthen the Position of Chinese Industry in Global Value Chains jointly issued by MOFCOM and six other departments. Could you shed some light on the background and the contents of the document? How will the related departments work together to help China鈥檚 industry move up the GVCs?

Answer: The CPC Central Committee and the State Council place great emphasis on China鈥檚 participation in global value chains in recent years, repeatedly calling for efforts to integrate the Chinese industry into the GVCs and ascend in the value chains. The 5th Plenary of the 18th CPC Central Committee manifested the goal of increasing the standing of China鈥檚 industry in the GVCs. The Guiding Opinions was introduced based on the joint studies of MOFCOM, the NDRC, the Ministry of Science and Technology, the MIIT, the PBOC, the General Administration of Customs and the National Bureau of Statistics to follow up on the Central鈥檚 decisions and deployments. MOFCOM, as the lead agency in the study and coordination for the document, received not only valuable support from the co-issuers, but also useful comments from other State Council agencies that contributed to the research process.
銆BR>With inputs from various parties, the document offers guidance in three aspects. First, it identifies development direction by expressly backing China鈥檚 integration into global division of labor, increased value-added of Chinese exports and China鈥檚 initiative to build global value chains of mutual benefit and win win. Second, it underscores international cooperation and exchanges, including international cooperation in measuring trade in value-added, international policy exchanges in the GVCs, and rulemaking for GVC cooperation on bilateral and multilateral platforms. Third, with a view to deepening GVC cooperation and improving resources allocation ability, the document sets out the exploring pathway for China to move up the GVCs from the angles of import vs. export, manufacturing vs. services, bringing in vs. going global, and industrial chains vs. innovation chains.

The Guiding Opinions lays out the policy framework for the repositioning that covers, among others, policies for industry funds, fiscals and taxation, talent, trade and investment facilitation, finance and innovation. To ensure the delivery of the goal, the document also calls for the establishment of a favorable assessment system through trials, incentives for localities to push regional value chain upgrading and leverage all resources available to deliver the move-up, and the building of public service platforms. As the first government document dedicated to upgrading in the GVCs, it will surely prompt the localities to take a practical, innovative and localized approach to strengthening the position of Chinese industry in the GVCs through better international cooperation, so as to deliver the supply-side structural reform and the accelerated transformation of economic growth pattern.

7. It is reported that US Commerce Secretary Pritzker said at the press conference of the 27th JCCT that 鈥淎t this moment, it is not ripe for us to change our protocol (regarding the evaluation of China鈥檚 market economy status)鈥 What is MOFCOM鈥檚 response to that?
銆BR>Answer: Firstly, I want to stress unequivocally that to recognize China鈥檚 market economy status and to honor the obligations of Article 15 of China鈥檚 WTO accession protocol and scrap the surrogate country practice are two different matters that mustn鈥檛 be mixed up.
銆BR>Secondly, it has to be restated that according to Article 15 of the Protocol on the Accession of China to the WTO, WTO members shall end the surrogate country method in anti-dumping investigations against China on Dec. 11th 2016. In the future, members shall observe general WTO rules in anti-dumping investigations into Chinese products and calculate the dumping margin based on the prices and costs of Chinese manufacturers. This is China鈥檚 due right as a WTO member and the obligation all the other WTO members must fulfill. This has nothing to do with whether China meets US domestic criteria for a market economy.

China has repeatedly made clear its position on this issue to the US, which should be well aware of the differences between the two. China advises the US not to muddle the information environment and shun due international obligations in the name of 鈥渕arket economy status鈥 China calls on the US to fulfill Article 15 obligations on time, fully and completely to promote the smooth development of Sino-US commercial relations.

8. ROK exports to China have been dropping for 16 months in a row. Aju Business Daily, a Korean news agency, said that was largely because of China鈥檚 shift from exports to domestic demand, support for home companies in the ICT and other sectors and rising restriction on foreign trade businesses. What is MOFCOM鈥檚 take on that?

Answer: We鈥檝e noted the report. The comments of the related media are groundless.

With the world economy mired in slump and global demand depressed, anemic and declining trade growth is a global problem. It is understood that apart from China, Korea鈥檚 exports to other countries and regions are also falling. According to Korean statistics, from January to October 2016, Korea鈥檚 foreign trade totaled US$ 735.435 billion, down by 8.9% year on year. In breakdown, imports stood at US$ 330.359 billion and exports at $US 405.076 billion, down by 10.0% and 8.0% respectively.
銆BR>China respects WTO rules and firmly opposes all forms of trade protectionism. We will continue to work with other countries to safeguard the world鈥檚 free trade system and lift world trade out of recession.

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

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