Cui Wenliang: Good morning, friends from the Media. Welcome to the press conference held by the Press Center of the Second Session of the Twelfth National People’s Congress. The Press Conference today is about commercial development and opening up. We are very grateful to have Gao Hucheng, Minister of Commerce, here to answer your questions centered on the theme. Now, let’s welcome Minister Gao Hucheng.

Gao Hucheng: Dear journalists and friends from the media, Good morning! I’m very glad to meet you here, and communicate with you and answer your questions on commercial work and opening up during the Two Sessions. Thank you all for your supports to the work of the Ministry of Commerce as well as China’s opening up and domestic trade and circulation during the past year. Meanwhile, thank you for your reports and concerns on this respect for such a long time.

Gao Hucheng: During the previous year, according to the deployment of the Party Central Committee and the State Council, we have done some helpful work in the following aspects. Firstly, we all know that, in terms of domestic trade and circulation, China’s total retail sales of consumer goods in the previous year were RMB 23.4 trillion, up by 13.1% and more than 11% with price fluctuation excluded. It seems that the growth rate is not high, but actually, it has reached a critical point, that is to say, in 2013, the contribution rate of consumption to the economic growth reached 50%.

Gao Hucheng: Secondly, in 2013, there were many uncertainties in global markets. Under such circumstances with great changes, China’s foreign trade achieved its expected goals: the total export and import increased by 7.6%, among that, export was up by 7.9% and import 7.3%. Last year, China’s export and import trade reached USD 4.16 trillion, becoming the largest goods trader in the world in terms of trade in goods.

Gao Hucheng: Besides, China has gained delectable achievements both in investment abroad and foreign investment utilization. Particularly, investment abroad has become a highlight of the development of China’s open economy. In 2013, China’s direct investment abroad reached USD 90.2 billion, up by 16.8%, and foreign investment utilization remained a good level under the circumstance that the growth rate of the whole world slowed down with a growth rate of 5.3%, reaching USD 117.6 billion.

Gao Hucheng: Next, I’ll take your questions.

Reporter from China Radio International and CRI Online: My question is about China’s foreign trade. You have just mentioned that in 2013, China has become the largest goods trader in the world, and there are some comments that China has not been the strongest goods trader. What’s your opinion on it? Besides, according to some enterprises we have interviewed, the foreign trade of February 2014 was not optimistic. What’s your judgment of the overall foreign trade in 2014? Thank you!

Gao Hucheng: We could say that becoming the largest goods trader in the world is a big land mark event during the development process of China’s reform and opening up, though actually, we all know that China has been a large goods trader in recent years. However, it is still a mark to become the largest goods trader in the world, because it is an achievement gained through endeavors of several generations, and also an expression of the socialist road with Chinese characteristics and the basic state policy of reform and opening up.

Gao Hucheng: According to the materials in our hands, China’s total export and import of USD 4.16 trillion accounts for 12% of the total global trade in 2013. China has become the largest trade partner of more than 120 countries. Besides, you may have noticed that, among the USD 4.16 trillion of export and import, import took up 2 trillion, which made significant contributions to the global economic growth.

Gao Hucheng: Moreover, domestically, more than USD 2 trillion of export made great contributions to domestic employment, tax and economic development of other aspects. Taking employment for example, according to our incomplete statistics, among China’s more than 700 million working population, almost 1 in 4 is occupied in foreign trade directly or indirectly. At the same time when we see the changes, there also exists a fact that China is a large trade country, not a strong trade country, which is showed in several aspects: most of our exported products are low value added; we have few own brand and the global marketing internet and marketing pattern is relatively hysteretic. This is the problem we must face and settle during our development from a large trade country to a strong trade country. The settlement of these problems is actually the progress of structure adjustment and transformation of development pattern.

Gao Hucheng: It is delightful that, facing with such pressures and changes, Chinese enterprises are continuously enhancing their own competitiveness, and adjusting their development direction, and making more efforts on structure adjusting and enhancing added value, which gives us confidence to the next development.
Gao Hucheng: As for the situation of foreign trade this year, there are a lot of discussions, but firstly, I want to say something.

Gao Hucheng: According to our analysis, in terms of domestic demands, we could say that in 2014, global economy will remain the status of recovery, especially those developed countries. It is helpful to China’s export with their increasing demands. In addition, though for some reasons, economy of emerging economies slowed down, their economic fundamentals are favorable and they are capable of solving some difficulties currently, and made their own economy recover in 2014.

Gao Hucheng: In terms of domestic competition, there are two favorable factors. One is what I have introduced to you just now—Chinese foreign trade enterprises’endogenetic adjustment and development motives since the international financial crisis, which we could see from products structure, market structure and marketing strategies. The second is systematic and mechanism innovation, which will stimulate enterprises’ system bonus and further enhance their competitiveness. Therefore, according to our comprehensive analysis of the overall global market in 2014, we have full confidence that China’s foreign trade will reach the goal of 7.5% of growth in 2014.

Reporter from China Business Network of Shanghai TV Station: A word we often heard recently is China (Shanghai) Pilot Free Trade Zone, which gained extensive concerns and expectation from the society. But recently, someone questioned that the preferential policies of the Free Trade Zone are not enough. What’s your opinion about it? Similarly, there are also other topics we often heard recently like Guangdong and Hong Kong Free Trade Zone PK China (Shanghai) Pilot Free Trade Zone. I want know that if China has plans to do experiments in other regions which are similar to China (Shanghai) Pilot Free Trade Zone?

Gao Hucheng: It is of common concern and arouses strong reflection in other regions and provinces and cities establishing China (Shanghai) Pilot Free Trade Zone. Firstly, I want to say that the establishment of China (Shanghai) Pilot Free Trade Zone is a significant measure under the background of comprehensively deepening reform and further expanding opening up, for its fundamental objective is to do an experiment for the next round of expanding opening up, and also form an experimental field of system and mechanism that can be created, replicated and popularized for the next round of reform and opening up.

Gao Hucheng: I think there are reasons from two aspects why China (Shanghai) Pilot Free Trade Zone attracted so many concerns. On the one hand, from the level of the public, most of the people view China (Shanghai) Pilot Free Trade Zone as a low-lying land of policies following the thought of building kinds of parks during the past 30 years since the reform and opening up, regarding it as traditional preferential policies including tax and authority transfer in such kinds of parks as we know. They look at China (Shanghai) Pilot Free Trade Zone following such a thought. Yet actually, building China (Shanghai) Pilot Free Trade Zone is an innovation in system and mechanism of the Party Central Committee and the State Council for the next round of deepening opening up after considering the situation.

Gao Hucheng: The Pilot Zone releases bonus of system and opening up mainly through institutional innovation. One of the main objectives and the center of the Pilot Zone is the transformation of government functions, opening of the examination and approval of investment, facilitation of investment and trade, especially the accession of trade in services, and financial reform. One of the major management patterns of foreign investment was put forward through national treatment before admittance and negative list.

Gao Hucheng: Through the 5-month experiment, we can see initially that the development and progress in all aspects are normal. Commercial registration reform was carried out firstly in the FTZ, and according to government work report, it will be popularized nationwide in March. Management of foreign investment and negative list was issued on schedule. Besides, in terms of trade facilitation, all the supervision departments have taken the pattern of discharging simply, and at the same time taken the measures of combining law enforcement and supervision to further facilitate the operation of enterprises in the Pilot Zone. In terms of trade in services, we will open in accountant, finance and consultant.

Gao Hucheng: More importantly, during the experiment of the Pilot Zone, after the opening up of government was transformed from examining and approving to the negative list, we have done helpful exploration on how does the government carry out the supervision during and after the process. On this respect, the Pilot Zone formed a governmental joint supervision system in 6 aspects, namely, coordinative and combining supervision mechanism, comprehensive law enforcement, social organizational involvement in the market supervision, social credit, safety review and assistance censorship on anti-monopoly as well as comprehensive evaluation system. The reason why I refer to this aspect is that traditionally, we are used to the examining and approve in advance, but how to strengthen government supervision after the approve is also a test for the government. It is a question we need to answer, and also an exploration we need to face in institutional innovation.

Gao Hucheng: Up to now, we have the reason to believe that, our preliminary evaluation on China (Shanghai) Pilot Free Trade Zone is positive. Just now, the journalist pointed out that other regions including Guangdong have put forward their applications to build Pilot Free Trade Zone. And the Ministry of Commerce has formed close connection and communication with related departments and related provinces and cities. Next, under the basis of China (Shanghai) Pilot Free Trade Zone, especially the evaluation and summary on further optimizing and reducing negative list and perfecting the comprehensive supervision system, a series of replicable and propagable experience should be formed as soon as possible. Here, I need to highlight that the replicable and propagable experience refers to the replicable and propagable system and mechanism. Thank you!

Reporter from International Business Daily: It is well-known that there was trade friction in respect of photovoltaic products between China and EU, so I want to know your opinions at this point on what Chinese government and businesses learned from it. In addition, I want to know how you think of the China-EU economic and trade relations this year. [09:46]

Gao Hucheng: The trade friction in respect of photovoltaic products between China and EU last year was a major trade friction drawing attention of China and EU as well as global photovoltaic industry. It was a trade dispute involving the maximum amount (over USD20 billion) than ever before in an industry, as well as employment of more than 400,000 people, so both Chinese government and EU industries and governments paid high attention to it. [09:47]

Gao Hucheng: Under the high attention of the CPC Central Committee and the State Council, and European Commission as well as competent authorities and the industries from EU, with the special assistance of the industries and intermediary organizations, we together with relevant departments, made tough negotiations and consultations with EU, and finally reached an accommodation by the way of price undertaking, which kept most markets of Chinese photovoltaic products in Europe, in particular, stabilized employment of over 400,000 Chinese labor forces. [09:47]

Gao Hucheng: Seen from the situation this year, what had happened to our photovoltaic industry in less than a year? China’s PV industry has witnessed a fundamental change compared with the period when we have been in consultation with the EU on how to properly resolve the largest trade dispute last year. On the one hand, we have stabilized most of China’s export markets by virtue of an accommodation with EU; on the other hand, we provided a development space for domestic photovoltaic industry upon promulgation of new policies for this industry by the State Council. Nowadays, the Chinese PV businesses revitalize in a very short period of time, undergoing fundamental changes in both of market diversification and technological progress, particularly in terms of cost and additional value of PV products. Such booming potential shown in Chinese PV businesses just a year later undoubtedly has a huge relation with the efforts of Chinese and EU’s leaders and industries as well as related businesses. [09:47]

Gao Hucheng: We can learn a lot from the resolved trade dispute in respect of PV products between China and EU. First, the economic and trade relation between China and EU is one of important fields in the comprehensive strategic partnership between China and EU. The EU is the largest trading partner of China, with bilateral trade volume of over USD500 billion in more than three consecutive years and USD566.2 billion last year. It should be said to be a common event for such a problem arising when such a trading partner and scale of trade volume are involved. However, due to the particularity of PV products, how do the two parties solve this major trade friction concerning employment, industrial development and bilateral economic and trade relations as important trading partners when such a huge trade friction occurred? Our first thought is to find communication, reconciliation, cooperation and a win-win and proper solution, rather than deal with this problem easily by trade remedy and tariff measures. [09:48]

Gao Hucheng: Through adequate solution of this case, both of the two parties realized that, we should strengthen communication and consultation between China and EU in the future trade frictions, and seek for common development through cooperation among industries and industries, so that these trade frictions can be effectively and properly settled. [09:48]

Gao Hucheng: I am also very pleased to inform you that we have been adhering to such an approach; the two sides are shouldering such a spirit to deal with trade disputes occurring now and in the future. I also want to emphasize that we do need the usual mind to look at such a trade friction case in China, a country to be the largest trading one as mentioned by the report just now. [09:48]

Gao Hucheng: As I mentioned to you that, China is the largest trading partner of more than 120 countries and economies, so the trade friction can hardly be avoided in a sense. We are still in line with the two basic principles; one is to properly safeguard the rights of businesses under WTO rules according to the law; the second is to strengthen communication and cooperation, and promote cooperation in industrial areas to strive to address issues like PV products dispute between China and EU with mutually beneficial and win-win approach on the basis of consultations. Even if use of trade remedies is really inevitable, businesses will not give up the efforts to reach a settlement at any time in a certain stage of negotiation. [09:48]

Gao Hucheng: We shall also be aware that, it is required to notice one of features of trade friction in respect of PV product between China and EU, i.e., it is not sensible to develop, blindly in particular, some products and industries, and market most of products in foreign markets, which is the reason I introduced the fundamental changes occurring in China’s PV industry to you. [09:48]

Gao Hucheng: With respect to China-EU economic and trade relations, as I mentioned just now, we have clearly recognized that, we have been in deep degree of integration and can not leave each other under the China-EU comprehensive strategic partnership. So we can recognize from this case that we are fully and intelligently capable of controlling differences among the China-EU economic and trade fields. Adhering to such a spirit, China and EU jointly issued the China-EU 2020 Strategic Agenda for Cooperation during two EU presidents’ joint visit to China last year, and started negotiations on investment agreements between China and EU; recently, there will be a second round of negotiations. [09:49]

Gao Hucheng: We believe that China-EU economic and trade cooperation will step into a stable and healthy development period under the China-EU 2020 Strategic Agenda for Cooperation and through negotiations on investment agreements between China and EU. Thank you. [09:49]

Report from the Australian Financial Review: We know that, the Premier Li Keqiang proposed to accelerate FTA negotiations between China and Australia in his government work report, so I would like to know whether there is a specific timetable in this regard, and which industries in investment and service fields China wants to get involved in and what kind of difficulties China is faced with. Thank you. [09:52]

Gao Hucheng: Free Trade Area negotiation between China and Australia is a very important negotiation between the two countries in economic and trade fields, to which the Chinese government authorities and the Australian Government authorities attach great importance. Australia’s new government, after its establishment, firstly highlighted the acceleration of signing China-Australia FTA in contact with the China, which could be the top emphasis among those in economic and trade relations between China and Australia. It should be said from the initial contact that, we are optimistic about the prospect of negotiating and signing this agreement based on the two rounds of technical consultations carried out. We look forward to launching a new round of official negotiation in following visits by principal of competent department of the Australia’s new government to China. Australia certainly has its own immediate concern for the FTA, which is obviously shown in Australian agricultural products’ access to Chinese market. China also has its main concerns in the FTA negotiations, which mainly include some provisions on qualifications and limitations for Chinese enterprises to enter Australia, and other concerns such as movement of natural persons. [09:53]

Gao Hucheng: Both governments of China and Australia want to properly resolve these issues so that China-Australia FTA can be reached as soon as possible, and we would like to jointly promote the proper solution to these problems together with Australian, so as to reach a mutually beneficial FTA. As for the timetable, I am aware that, after establishment of the new government of Australia, principal of relevant departments proposed the expectation to complete the FTA negotiations between China and Australia within a year in meetings with principal of Ministry of Commerce of PRC, so we would like to jointly endeavor with Australia, and expect to seek a compromised solution on issues concerned by both sides and reach a comprehensive and high-quality FTA as early as possible. [09:53]

Reporter from CNR & My question is about domestic trade. Ministry of Commerce plays the role of administrating domestic trade, so, what measures will be put on the stage for domestic market stability and circulation, especially for people’s livelihood? Thank you. [10:06]

Gao Hucheng: I have to say that domestic trade is closely connected with people’s livelihood, which, also attracts much attention from us. In the past one year, with attention focused on our people’s life, we have invested some efforts concerning domestic trade as well as circulation and consumption expanding. The thing that comes first would be commodity circulation and first comes to the first would be the circulation of agricultural and sideline product, which relates to people’s livelihood the most; or we can say that this is the business that we shall deal with everyday. Before digging into this problem, I’d like to introduce you some basic information concerning the structure of production, circulation and consumption in our country. I think this will help you understand the focus as well as challenges faced to us. [10:06]

Gao Hucheng: The production, circulation and consumption structure in our country characterized with small production and large market. First, small production, as we all know, in spite of swift development in mass production of agricultural and sideline product, we are still dragged with the real situation of our country. The abovementioned small scale production still hasn’t matched our large consumption need. One thing that stands high is the problem of information asymmetry. As for circulation, the most important problem faced to us would be too many links, low efficiency and high cost. [10:07]

Gao Hucheng: All we are now doing is to tackle with these problems so as to promote commodity circulation. For example, we exempt VAT for vegetables and fresh meat and eggs concerning circulation as well as exempt tenure tax and building tax for agricultural product sold in wholesale market and farmer’s market. We cooperate with transport authority to make measurements dealing with problems for vehicles that deliver necessities to cities since they can merely find parking lot, travelling and handling with difficulty. As a result, we played a favored part in upgrading and reconstruction of over 2,700 farmer’s market and 760 community chains in many large and medium-sized cities. [10:07]

Gao Hucheng: For now, we also have one important thing on mind. During the past years of city development, quite a lot of public and circulation infrastructures, which should have our full attention and good planning, has been operating under market-oriented economy, such as some large wholesale vegetable market, the equity of which is operated under market discipline. Now we are jointly with the local authority concerned to help governments at all levels, especially the municipal government to buy back or purchase stock equity and share of commonweal projects, which will increase public invests and decrease operating costs. [10:07]

Gao Hucheng: Maintaining market stability also has a lot to do with the specialty of production and consumption in our country. Small production, large market and asymmetric information can always result in “difficulty in buying and selling”, which occurs in everybody’s life on a frequent basis. In this respect, jointly with related institutions concerned, including agricultural department and other departments, we make lots of efforts. As for now, we can say that information release system plays a powerful role in production and circulation. [10:07]

Gao Hucheng: Everyone present here may notice that speculations on some agricultural product as well as agricultural and sideline product are becoming less and less; however, having difficulty in buying and selling still makes its appearance occasionally. For instance, Guangxi vegetable and Hunan lettuce issues happened last year, both of which are examples of difficulty in buying and selling. Of course, you may notice the market restores soon, but what you may not know is that a series of the measures that applied within are established in recent years. I can give you two examples, the south vegetable to north program and the network system that will be applied when “difficulty in buying and selling” happens. The mechanism of the latter one is that the market will give you a sign by telling you which companies will be in need of your products. Based on that, commercial departments of all levels all over the country will be together with other departments directing buyers to areas involved in difficulty in selling while organizing manufacturer or distributor within the place of origin to promote products in areas in need. [10:07]

Gao Hucheng: In addition, there is a more important aspect that natural disaster and some public security events can also result in market price movement, and we can not avoid them, such as earth quake or drought and some public security events. As a result, we have established an emergency and reserve system under central government, local government and enterprise level, and the central and local government are paid by finance and the reserve of business enterprise is made by enterprise. To date, this reserve system has covered 31 of provinces, cities and autonomous regions and 156 of cities above prefecture-level, which allows us to increasingly expand the types of reserves. In addition to traditional food that people are familiar with, such as sugar, pork, beef and mutton and vegetables in winter and spring, we also add the emergent reserve such as instant noodles and mineral water. From these years, we can see that although natural disaster happens on and off, the market has remained at a stable state, without the occurrence of shopping rush and market in short supply, therefore, it has played an significant role in stabilizing market. [10:08]

Gao Hucheng: Last but not the least, I would like to introduce the work we have done to standardize market order. In order to break the regional blockades, under the cooperation with the related departments, we have eliminated a series of regulations related to regional blockades in a centralized manner. For example, some local governments implement supportive measures and subsidy measures to local enterprises, but attach some conditions to bidding and tendering of non-local government, and phenomena such as unreasonable charge existed in circulation channel, they are subject to the work of breaking regional blockades and elimination in a centralized manner, and we have achieved a comparatively good effect. Moreover, we have effectively eliminated and rectified behaviors of some retailers which charge admission fee or delay payment by utilizing their market advantages. We can recall that two years ago issue on the relationship between supply and demand is our major concern, but it was almost not a problem in the last year, and even it occurred, it happened in partial place not the centralized way, and was properly resolved in a timely manner. That is to say, the awareness of contract standardization and performance of contract by law are improved both on retailer and supplier. [10:08]

Gao Hucheng: We have also rectified the false advertisement of TV shopping, which is one of the phenomena deeply disgusted and concerned by the public. TV shopping sells counterfeit and shoddy products on radio and television by making false advertisement and misleading consumers, and it makes fictitious promise for after-sale service, violating the legal rights of consumers. By working together with departments such as the Ministry of Public Security and the State Administration of Press, Publication, Radio, Film and Television, we are carrying out rectification specific to TV shopping nationwide in a centralized manner, and we have established the term for this activity. We believe that the relatively good results can be achieved under the joint work by various departments. [10:08]

Gao Hucheng: We have also made great efforts on the issue of insecurity and economical inefficiency of rural economy. To date, a total of 730,000 of countryside stores have been built. Countryside stores are those transformed out of individual or co-operative society in the past, which are located in villages of rural area. Until now, with our support, construction of countryside stores has covered 97% of villages and towns and 82% of administrative villages nationwide, which enables the commodities of countryside stores to be distributed in a centralized manner, with 63.4% of delivery rate. According to our questionnaire survey, 95% of peasant households regard that the commodity quality has been significantly improved since the reconstruction and upgrade of countryside stores. [10:08]

Gao Hucheng: Furthermore, we have established the traceability system for commodity, particularly those for meat, egg and vegetables. To date, based on the pilot project implemented in Shanghai two years ago, the system has expanded to 50 medium and large-sized cities nationwide, with covering increasingly more commodity lines and enterprises. We have made 402 slaughtering enterprises enter into the traceability system, and in more than 50 of cities, you can trace the aforementioned commodities lines from 205 of large-sized wholesale market, 6,390 standardized vegetable market and 3,432 medium and large-sized chain supermarkets. Moreover, we have reinforced the construction of traceability system for medicinal materials. So far, the traceability system for medicinal materials has covered 11 provinces, including Yunnan and Guangxi. [10:09]

Gao Hucheng: For consumption environment, I would like to emphasis a point when introducing this general background. Indeed, based on the basic national condition that is of “small scale production and big market”, and the issue of inefficiency, high cost and complexity of procedures in circulation of our country, we do have carried out some work for resolving those problems. However, my point is that I believe the consumption environment will get better, with circulation cost becoming less expensive and gradually growing of consumption (commodity consumption and availability of service included). Why? The reason is very simple. We can review various matters, and when we look forward to the future, we had better to look back in the past. We can recall that what we encountered with in the circulation of agricultural products market two or three years ago, the difficulty in buying and selling arose by “small scale production and big market” and emergent events of ceaseless hype of agricultural products (including the violent market fluctuation in the emergent events) at that time have been effectively controlled in recent years. As a result, we have reasons to believe that under the joint efforts from government and industry (those from the local government at all levels and industry in particular) and with the consumers’ demand and supervision demand, our industry will continually improve its system for guaranteeing supply and circulation, the governmental department will also play the role as one of the major competent departments, and we will increase more efforts in all aspects of work, so as to ensure that consumption, as one of the three driving forces, will not only contribute 50% in driving economic growth, but also increase this proportion on an on-going basis. [10:09]

Reporter from CCTV and CNTV: Good morning, Minister Gao. You mentioned the progress and conditions of China (Shanghai) Pilot Free Trade Zone as well as other pilot FTAs just now. As we have noticed that there is a bigger FTA—the TPP, via Trans -Pacific Partnership Agreement, which is also underway and some of the main economies have joined the TPP. So what kinds of influence it may bring have on the foreign trade pattern under the present WTO framework for China in the future? Has China begun to consider joining TPP recently?

Gao Hucheng: At present, the trend of global investment liberalization and trade liberalization run parallel. As Premier Li Keqiang said that global multilateral trade system and regional investment and trade liberalization go hand in hand like two running wheels. That is also the position China holds in international economic orders, especially the investment and trade liberalization. We believe as always that the world multilateral trade system is the footstone of global multilateral trade, and China, is the participant, builder as well as a positive contributor of the global multilateral trade system, especially the global trade rules that are formulated on the basis of the Wworld Ttrade Oorganization. Besides, we believe that the regional arrangements, and bilateral trade and investment liberalization arrangements are beneficial complementsary to the multilateral trade system, or even beneficial improvement. We believe the two development trends could be implemented without coming into conflicts and both of them aim to further expand the global investment and trade facilitation, boost a better recovery of global economy and contribute to a more liberate and convenient environment for global trade and investment.

Gao Hucheng: In this respect, China has made her its own contributions in Bali to the Doha Round Package made in the ninth WTO Ministerial Conference in Bali closed lately. This is the first early harvest after more than a decade of Doha Round negotiations, and we have reached ten agreements in agriculture, trade facilitation and development aid, injecting great vigor into Doha Round negotiations at next step. At present, all the WTO members are positively discussing to carry outon the implementation of the early harvest and exploring ways and options to end Doha Round negotiations.

Gao Hucheng: Meanwhile, the regional FTA negotiations have just been unfolding. China has joined them and also begun to promote our own FTA construction. As it is stated in the Third Plenary Session of the 18th CPC Central Committee and Report on the Work of the Government delivered by Premier Li Keqiang, China needs to positively push FTA strategy and build a FTA network of high standard facing the globe. China has joined China-ROK FTA, China-Australia FTA, China-Japan-ROK FTA and RCEP negotiations so far, and will start the GCC (Gulf Cooperation Council) negotiations and prepare for the pre-feasibility and feasibility study on early FTA negotiations with other countries. In a words, China has been positively involved involving in FTA negotiations. As a defender as well as a contributor of the world multilateral trading system, China has been actively joined joining in the various bilateral and multilateral investment and trade liberalization negotiations globally.

Gao Hucheng: In terms of the TPP you just mentioned, we regard it as a very important negotiation and a high-level trade agreement. China has been comprehensive and open to regional investment and trade liberalization for long, so we hope that relevant sides could also be comprehensive, open and transparent in promoting the regional trade arrangements so as to inject new vigor into the multilateral trading system. We attach great importance to the progress of TPP negotiation and begian to assess its development and progress. Meanwhile, we also keep in touch with the main participants of TPP negotiations. For example, for China and the U.S., the relevant information on the progress of regional FTA negotiations either China or the U.S. joined which is made by the U.S. side has been confirmed as one of the system arrangements of the Joint Commission on Commerce and Trade. In this respect, China side pays great attentions and holds a comprehensive and open attitude to make assessment positively. Thank you.

Reporter from Southern Metropolis Daily: It’s well known that China will hold APEC serial meetings and Informal APEC Economic Leaders’ Meeting this year, but many criticism comments internationally believe that the role APEC plays in promoting regional economic and trade cooperation is weakened. So Minister Gao, how could we stop such voice in hosting APEC this year? What kinds of concrete measures do we have in promoting APEC cooperation? Thank you.

Gao Hucheng: APEC is a regional organization with the most participants and most influence in Asia-Ppacific regions at present. Since it was established in 1989, driven by the two missions of promoting regional trade and investment liberalization and facilitation as well as economic and technological cooperation, APEC has made important contributions and played an important role in promoting the trade and investment development as well as the economic prosperity in Asia-Pacific region.

Gao Hucheng: I don’t agree with the saying that APEC’s role is being weakened, and I believe that none of the 21 APEC members agree with it. Why? That’s simple. As long as you have a review on the annual APEC meetings, either the ministerial meeting or the non-formal economic leaders’ meeting, the fruits or inventory to the meeting, or the role APEC has played in promoting regional trade & investment facilitation and economic cooperation, each of them will lead you to come to the conclusion.

Gao Hucheng: As a member of one big family in Asia-Pacific region, China’s economy is closely related with Asia-Pacific countries. In 2013, the trade between China and APEC members accounted for 60% of China’s total foreign trade. The direct investment China made in APEC members accounted for nearly 70% of China’s total direct investment. 83% of China’s actual utilization of foreign capital was from APEC members. Among China’s ten largest trading partners, 8 of them are APEC members. This clearly demonstrates the China’s connection with APEC, as well as APEC members’ relation with China.
Gao Hucheng: China will host APEC once again after 13 years, including Informal APEC Economic Leaders’ Meeting and APEC Ministerial Meetings. The latter will be held in Qingdao, Shandong on May 17-18. Considering the new economic situation in Asia-Pacific region, China proposed a theme of “Shaping the future through Asia-Pacific Partnership” for APEC Chinese year. I think this theme fits well with the economic development situation in Asia-Pacific countries. The three major topics are to advance regional economic integration, promote innovative development, economic reform and growth, and enhance comprehensive connectivity and infrastructure development.

Gao Hucheng: In investment and trade areas, we will focus on promoting Asia-Pacific FTA construction, which is established as an orientation when APEC first came into being in 1989. Support the multilateral trading system, fight against trade protectionism, promote the connectivity of global value chains and global supply chains and strengthen the communications in technology, economic cooperation and other areas. The above theme and topics have won positive response and support from the members in the APEC Informal Senior Officials’ Meeting. In 2014, we will join efforts with other APEC members, centering on the main topics for APEC Chinese year, expand consensus through serial meetings and cooperation and mutually promote a pragmatic and fruitful APEC Informal Economic Leaders’ Meeting shaping the future, making new contributions to the common development of local economy as well as the development and prosperity of global economy. Thank you.

Reporter from Phoenix TV/ There are many analyses stating that the uncertainty of China’s present policy is adding. With rising cost, the profits are compressed; so many foreign-funded companies think that China’s investment environment is descending. You mentioned just now that China’s investment overseas is surging and many countries regard China as a rich country now. How does China deal with its foreign investment? What do you think of the above worry? Will China release relevant policies or measures to expand its opening to the foreign investment? Thank you.

Gao Hucheng: I briefed about China’s actual utilization of foreign investment at the first beginning. Last year, the actual utilization of foreign investment amounted to USD117.6 billion, up by 5.3%. It’s a meaningful number against the global downturn last year. That’s to say, the average growth rate of global investment was far below 5.3%, in spite of it, China still maintained such a growth. Moreover, the investigation made by the chamber of commerce and organizations of foreign-funded companies in China show that either through the chamber of commerce for EU (China) or through that of other countries and regions, more than 85% of the investigated companies were profitable in China and above 90% of the companies would like to expand their investment in China.
Gao Hucheng: But why there is such criticism or saying that the investment in China is shrinking with rising cost? How is China’s foreign investment environment on earth? I think that we should know at first that after China joined the WTO, we did adjust the preferential policies given to foreign investors in terms of the national treatment compared with that at the first beginning of China’s reform and opening up. Meanwhile, there are also profound changes in China’s products as well as industrial structures. For example, China’s labor-intensive products are not competitive any longer as a result of the rising cost. So all of these will be reflected in foreign investment areas.

Gao Hucheng: At the same time, we should also notice the rapid development of domestic enterprises, including various enterprises under different ownerships. When we have a look at the world top 500 enterprises and compare the number of China’s enterprises with that of ten years or twenty years before, we may easily find the changes. Therefore, I think that the advantages of China’s comprehensive utilization of foreign investment do not change, but only with small changes in its direction, structures as well as areas. For example, among China’s USD117.6 billion utilization of foreign investment, more than half of which came to the service sector, a radical change compared with that used in manufacturing and production before.

Gao Hucheng: In order to further improve the investment environment, we actually have proposed new requirements as stated in the resolution of the Third Plenary Session of the 18th CPC Central Committee as well as the report on the work of government delivered by Premier Li Keqiang to further widen the opening up, improve investment environment and release the system and mechanism bonus. We will take serial measures to widen the opening up, especially the improvement of investment environment. That is one of the main efforts we should focus on for next step.

Gao Hucheng: We consider focusing on the opening measures for next step at first, especially in the service sector, including finance, education, culture, medical treatment, children nursery, pension for the aged, architecture design, accounting, auditing, commercial logistics and e-commerce, as well as the conventional manufacturing. The Ministry of Commerce will work with relevant departments to carry out measures to release the limits on foreign capitals in terms of the shares percentage and the business scope.

Gao Hucheng: I also briefed about China (Shanghai) Pilot Free Trade Zone before. Actually, it’s a trial for the system and mechanism. We aim to form a transferable and repeatable system and mechanism, rather than transferable and repeatable preferential policies by China (Shanghai) Pilot Free Trade Zone. Therefore, we want to lead Shanghai to modify the negative list, narrowing the list and widening the requirements, so as to gain transferable and repeatable experience for the system or mechanism and further extend to other districts orderly under overall arrangement of the central government and State Council.

Gao Hucheng: Thirdly, strengthen the guidance on national economic and technological development zones, border economic cooperation zones and cross-border economic cooperation zones, through which, further widen the opening up of western China and the border districts of China. Meanwhile, we also encourage to optimize industrial structures in structure adjustment and transfer of industry, such as the transfer of processing trade into western China, and further simply the policies and procedures for foreign-funded enterprises located in eastern China to transfer to western China.

Gao Hucheng: Besides, we will push forward to improve the investment environment, make more efforts to create an open and fair law environment, a high-efficient and convenient administrative environment, and a market environment with fair competition so as to truly protect the legitimate rights and interests and intellectual rights of foreign-funded enterprises. This is the requirement of our system and mechanism as well as the requirements proposed in the report on work of the government in terms of China’s opening up. Thank you.

Cui Wenliang: That closed today’s press conference. Thank you, Minister Gao Hucheng. Thank you, friends from the press.
People’s Daily Online: The live ends here. Thanks for your attention.

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