Ladies and gentlemen, good morning! Welcome to this press conference from the State Council Information Office (SCIO). The Ministry of Commerce (MOFCOM) has played an active part in building a moderately prosperous society in all respects. Today, we are delighted to be joined by Mr. Wang Wentao, minister of commerce; Mr. Wang Shouwen, vice minister of commerce and deputy China international trade representative; and Mr. Qian Keming, vice minister of commerce. They will share relevant information and answer your questions. First, let's give the floor to Mr. Wang Wentao.
Friends from the media, ladies and gentlemen, good morning! I am very glad to be attending this SCIO press conference today. First of all, I would like to extend my appreciation to you for your long-term attention to and support for China's commerce work.
At the ceremony marking the centenary of the Communist Party of China (CPC), General Secretary Xi Jinping announced that we have realized the first centenary goal of building a moderately prosperous society in all respects. This historic achievement made by the Chinese people under the CPC's leadership is a key milestone in our socialist modernization drive.
The commerce work connects China with the world, links urban and rural markets, and concerns each and every household. It has also played an important role in building a moderately prosperous society in all respects. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China's commerce work has made historic achievements and undergone significant reforms. China has further consolidated its position as a major economy and trading nation, and is accelerating its move toward becoming a quality economy and trader. While being the world's second largest consumer market and largest trading nation, China also leads the world in paid-in foreign investment and outbound investment with growing global economic governance capacities, which in turn promote economic prosperity, social development and the people's well-being. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the commerce system bears in mind the country's most fundamental interests and carries out the "four commitments."
下面，我简单把商务工作有关情况向大家作个介绍：
Next, I would like to share with you some information about our commerce work.
First, we are committed to expanding domestic demand as a strategic priority to foster a strong domestic market. China enjoys the advantage of a unique and super-sized market with a population of 1.4 billion people and a 400-million strong middle-income group. Domestic demand is a fundamental driver of China's economic growth and its expansion is essential to meeting people's aspirations for a better life. We have driven innovation in circulation by creating 15-minute community service circles for the convenience of residents, upgrading pedestrian streets, transforming the retail sector, promoting the innovative development of commodity markets, improving cold-chain logistics facilities for agricultural products, enhancing the urban and rural logistics distribution system, and advancing the standardization of commercial circulation to make it smoother and more convenient. We have upgraded consumption by boosting the consumption of goods such as cars and home appliances, and services such as catering and housekeeping. We have recently announced five leading cities for developing into international consumption centers. Meanwhile, we have strengthened commercial systems in counties and boosted rural consumption. We have worked to ensure emergency supplies. In response to unexpected situations, such as the recent floods and sporadic coronavirus cases, we enhanced the joint supply security mechanism to ensure market supplies. In 2020, the total retail sales of consumer goods reached 39.2 trillion yuan. Consumption has been the strongest engine driving economic growth for many years.
Second, we are committed to expanding high-level opening-up to promote high-quality development. Opening-up is the only way for China to achieve national prosperity. Driven by greater opening-up, reform and development holds the key to China's continual development achievements. High-quality development requires a high-level of opening-up. We continue expanding the scope of opening-up and further broadening market access. The negative list for foreign investment has been shortened from 93 to 33 items. We have also raised foreign equity caps in areas including the automotive, finance and securities sectors. We have launched comprehensive pilot demonstration programs for wider opening-up in the services sector. We have actively built new highlands and platforms for opening-up, pushed for the establishment of 21 pilot free trade zones and the high-quality development of the Hainan Free Trade Port while promoting the innovative upgrading of national economic development zones. We ensured the success of major expos such as the China International Import Expo, Canton Fair, China International Fair for Trade in Services, and China International Consumer Products Expo. We have accelerated institutional opening-up and improved systems and mechanisms commensurate with new business types and models such as cross-border e-commerce. We have promulgated the Foreign Investment Law and regulations for its implementation, implemented a pre-establishment national treatment plus negative list management system nationwide. We aim to align with international rules and advance trade and investment liberalization and facilitation.
Third, we are committed to serving the people through commerce and contributing to the victory in eradicating poverty. Winning the fight against poverty is the most daunting and complex task for achieving moderate prosperity in all respects. We have been upholding a people-centered development philosophy in the commerce work. On one hand, we have leveraged the strengths of commerce and introduced measures in five commerce-related areas of e-commerce, housekeeping services, overseas labor services, industrial growth and border trade. On the other, we have actively cooperated with other countries and international organizations to channel more development aid to impoverished regions in central and western China to support local industrial development.
Fourth, we are committed to pursuing mutually beneficial cooperation and common development under the vision of building a community with a shared future for mankind. We have pressed ahead with the Belt and Road cooperation by intensifying trade and investment cooperation with partner countries and forging closer business and cultural exchanges, so that all countries can enjoy new development opportunities and broader markets, and share in the dividends of China's reform and development. Through our well-implemented cooperation and foreign aid projects, we have provided assistance within our ability to developing countries, notably the least developed countries, as part of our efforts to implement the vision of building a community with a shared future for mankind. We have played an active part in international economic governance, put forward China's proposals and contributed Chinese wisdom to multilateral meetings such as the G20, APEC and BRICS. We firmly uphold the multilateral trading system with the WTO as the core and are striving to build an international network of high-standard free trade zones.
Looking ahead, we will march forward on the new journey toward fully building a modern socialist country. The positioning of the commerce work can be summarized in three important aspects, that is, commerce work, as an important part of the domestic circulation and an important link between domestic and international circulations, plays an important role in building a new development paradigm. Commerce work is an important part of the domestic circulation as it includes domestic trade. The position as an important link between domestic and international circulations involves foreign trade, foreign investment and domestic trade. Our work can play an important role in building a new development paradigm. Ahead of us are heavy responsibilities and a noble mission. We will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ground our work in the new stage of development, and fully and faithfully apply the new development philosophy. With our focus on the positioning in the above three important aspects, we have introduced a portfolio of "5+5" measures for this year's work. Specifically, for smoother domestic circulation, we will take five measures of elevating traditional consumption, fostering new types of consumption, upgrading consumption platforms, optimizing distribution networks, and developing stronger distributors. To promote international and domestic circulations, we will also make efforts in five aspects of keeping the fundamentals of foreign trade and foreign investment stable, deepening Belt and Road economic and trade cooperation, promoting the integration of domestic and foreign trade, developing high-standard opening-up platforms, and strengthening multilateral and bilateral trade and economic cooperation. To sum up, the three important aspects will be implemented through the five measures in domestic circulation and another five in international and domestic circulations, which together constitute our fundamental tasks this year.
下面，我和我的同事王受文先生、钱克明先生愿意接受各位媒体的提问。谢谢。
Next, my colleagues and I will answer your questions. Thank you.
陈文俊:
谢谢王部长。下面欢迎提问，提问前请通报自己所在的新闻机构。
Chen Wenjun:
Thank you, Mr. Wang. The floor is now open for questions. Please identify your news outlet before asking your questions.
During the historic transformation from secure access to food and clothing to a decent life, and finally, to moderate prosperity, China's consumption structure has shifted focus from consumption for survival and a decent life to consumption for an affluent life and enjoyment. What measures have been taken by the MOFCOM to upgrade consumption, and what measures will be adopted in the future? Thank you.
I will answer your questions. Consumption is an important engine driving growth and reflects people's need for a better life. Since the 18th CPC National Congress, the MOFCOM has resolutely implemented the strategy of expanding domestic demand. Here I will present you some data. In terms of scale, China's total retail sales of consumer goods grew from 20.6 trillion yuan in 2012 to 39.2 trillion yuan in 2020, up by 8.4% per annum on average. China has become the world's second-largest consumer market, second only to the United States. In terms of structure, people's level of consumption and quality of life have been greatly improved, which I think has been witnessed by everyone here. Here are some figures. Every 100 households have 121 color TV sets, 102 refrigerators, and 254 mobile phones. Our service consumption has grown rapidly. Though hit hard by the epidemic, it still accounted for 50.1% of total consumption spending last year. Along with the improvements in the quality of life, consumption upgrading has been continuously accelerated. We have seen that new areas of consumer spending continue to emerge in service consumption and new consumption patterns, such as digital consumption, cultural consumption, tourism consumption, and health consumption. Nowadays, some new business formats and models are often referred to as consumption scenarios. Different consumption scenarios keep evolving and innovating. Next, the MOFCOM will adapt to consumption trends and make efforts in the following aspects:
First, we will upgrade traditional consumption, which has a huge potential. Home appliances, furniture, automobiles, and catering are the top four popular consumption products, accounting for about 25% of the total retail sales of consumer goods. Take automobile consumption for example, we will promote the shift from purchase management to usage management for automobiles, especially expanding the distribution of second-hand cars. These days I have paid special attention to second-hand cars. One of the rules of international automobile consumption is that when vehicle holding reaches a certain number, the market of second-hand automobiles will see a significant rise in trade volume. Therefore, the second-hand market will grow bigger in the future, promoting both sequential consumption and circular consumption. We encourage the recycle of home appliances and furniture in the regions with suitable conditions, as well as exchanging old for new. We also support innovation of the catering industry's operational model and improvement in service quality to further expand catering consumption. More attention should also be paid to the preservation and innovation of time-honored brands, brand consumption, and especially new business formats and models, including the "China-Chic" economy, which has attracted many young people.
Second, we will accelerate the fostering of new consumption patterns. The pandemic has buoyed some new consumption patterns dominated by online consumption, with many innovative changes. So, we must accelerate the fostering of new consumption patterns, including smart shops, contactless delivery, house call services, and other new business formats and models. Meanwhile, we encourage traditional circulation enterprises to create new consumption scenarios which are immersive, experiential, and interactive. When going shopping in Beijing, I often find some new, exciting, and refreshing consumption patterns. There are many creative internet-famous sites in districts with distinctive features. All these are new and dynamic growth areas.
Third, we will upgrade consumption platforms. Through the innovation and development of consumption platforms, we will connect points, lines, and planes and finally combine the expansion of consumption with the improvement in people's living standards. I just said that we are fostering five international consumption centers, namely Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing. Meanwhile, we will promote high-quality upgrading of pedestrian streets and develop business districts and districts with distinctive features. This May, we worked with relevant departments to launch a nationwide campaign of Consumption Promotion Month, which was a great success. Next, while making an all-out effort to contain the epidemic, we will launch more campaigns and adopt a series of policies and measures to further boost consumption based on its characteristics. We will also promote shopping festivals to attract consumers and boost the market and the business, meet diversified demand at various levels, and adapt to the trends to promote the upgrading of both consumption structure and capacity. Thank you.
Since the 18th CPC National Congress, China's open economic system has been continuously improved, providing strong support and guarantees for China's opening up to the outside world and the building of a moderately prosperous society in all respects. The Fifth Plenary Session of the 19th CPC Central Committee made arrangements for developing new systems for an open economy with even higher standards. How will the Ministry of Commerce implement these arrangements and promote institutional opening up? Thank you.
王文涛:
开放是中国特色社会主义制度的重要特征，这个问题比较综合，我来回答一下。
Wang Wentao:
Opening up is an important feature of the socialist system with Chinese characteristics. It's a broad question, so let me answer it.
In the process of building a moderately prosperous society in all respects, especially since the 18th CPC National Congress, we have opened to the outside world in a wider and deeper manner. Some high-level open systems have basically taken shape. For example, in terms of law, the foreign-related economic and trade legal system has been gradually improved. In terms of management, the management system, policy system, and security guarantee system have also become more complete. A market system that is relatively unified, open, competitive, and orderly has gradually taking shape. Opening up is a kind of reform in itself. In the next step, we need to promote reform with determination, courage and responsibility and deepen reform by opening up and accelerate the transition from opening up based on flows of goods and factors of production to opening up based on rules and related institutions. We will further push forward the continuous improvement of the new systems for an open economy with higher standards in the following three aspects.
First, we will scale up efforts to improve free trade zones and ports. Since their establishment, pilot free trade zones have served as good models of reform and opening up. At the national level, we have rolled out 278 institutional innovations. Meanwhile, the Hainan Free Trade Port is also under steady construction. We have reached a consensus and pinpointed our targets. In the next step, we will promote our opening up in accordance with a higher standard of international economic and trade rules. We may apply high-level economic and trade rules in some areas with favorable conditions and conduct stress tests. Testing helps boost our opening up efforts. After detailed analysis, some economic and trade rules can be directly implemented when the conditions become favorable. Some must be ratified and then implemented, such as the Regional Comprehensive Economic Partnership (RCEP). We take high-standard economic and trade rules as references to promote further opening up. We will also further cut the negative list on foreign investment in the pilot free trade zones. We have been exploring and working hard in these aspects.
Second, we will improve the balance in opening up our different regions. We will further promote major regional strategies and regional coordinated development strategies and strengthened inter-regional connections, including coordinating coastal and inland areas and connecting the eastern and western regions. In particular, there is great potential for opening up in the central and western regions as China further deepens opening up. China has a vast territory, and there is a lot of room for development in the central and western regions. This year, in accordance with General Secretary Xi Jinping's requirements for enabling exhibits to become traded goods and exhibitors to spot more investment opportunities at the China International Import Expo (CIIE), we launched a series of investment promotion events for the CIIE, so that CIIE exhibitors can learn more about the market and investment environment of China's central and western regions. The first promotional event was held in Sichuan province and next, we will launch a series of activities to promote the linkage between the east, west, central areas and northeast China. Considering the transfer of some industries and the expansion of the market, we will also accelerate the innovation and development of border trade, speed up the construction of border economic cooperation zones and cross-border economic cooperation zones, and step up the opening of border areas to the outside world.
Third, we will improve the security guarantee system for the open economy. Development is the foundation of security, and security is the bottom line at all times. We must keep security in mind and accelerate development on the basis of security. The more open we are the more attention we must pay to security. We will improve the level of supervision, ensure the security of the industrial chain and the supply chain, properly resolve economic and trade frictions, and forestall and defuse major risks.
In recent years, there have been a growing number of free trade agreements in the world. How is the development of China's free trade agreements coming along? What role do they play? What are the future plans?
Thank you for your question. Indeed, currently, international free trade agreements are flourishing. According to WTO statistics, more than 350 free trade agreements have been reached so far. It is particularly noteworthy that some large free trade agreements have been signed and entered into force. For example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the RCEP, the EU-Japan Economic Partnership Agreement, and the U.S.-Mexico-Canada Agreement are all large-scale free trade agreements. Under the correct leadership of the CPC Central Committee and the State Council, we have followed the general trend of international regional economic integration, actively carried out free trade agreement negotiations with trading partners and made great progress. In 2002, China's first free trade agreement, the free trade agreement reached with ASEAN, enabled us to embark on a new journey of free trade agreements. So far, we have successfully negotiated19 free trade agreements and signed agreements with 26 countries and regions.
It is worth mentioning that since the 18th CPC National Congress, we have signed nine free trade agreements (FTAs), including eight with individual countries, such as the Republic of Korea (ROK), Australia and Switzerland, and the Regional Comprehensive Economic Partnership (RCEP) agreement. Meanwhile, we've upgraded existing free trade agreements, including the China-ASEAN FTA, and proceeded with negotiations on upgrading the China-Chile FTA, the China-Singapore FTA, and the China-New Zealand FTA. These are all very important works.
You asked what important role FTAs have played for our country. I should say that the role is very clear. First, the FTAs play a significant role in expanding trade and investment relations with our free trade agreement partners and stabilizing the overall performance of foreign trade and foreign investment. For example, trade volume with its FTA partners accounted for only 12.3% of China's total foreign trade in 2012, but last year, the proportion rose to nearly 35% of the total. Last year, the epidemic had a great impact on global trade, however, China's trade with its FTA partners grew by 3.2%, while trade with non-FTA partners only increased by 0.8%. Therefore, FTAs play a very significant role in foreign trade. In terms of investment relations, last year, nearly 70% of China's outbound investment was to its FTA partner countries and 84% of foreign investment in China was from FTA partners. Therefore, FTAs play a very significant role in investment relations.
Second, FTAs have further deepened economic and trade relations with FTA partners. For example, bilateral trade between China and the Association of Southeast Asian Nations (ASEAN) was only more than $78 billion in 2003, however, the figure reached $685.1 billion last year, an increase of 8.7 times. If there are no FTAs, trade cannot grow so much. China has remained ASEAN's largest trading partner for 12 consecutive years. In 2020, ASEAN also became China's largest trading partner. Take another example - Chile. Chile's trade with China accounted for 20%, or one-fifth, of its total foreign trade in 2012, compared to one-third last year. This goes to show just how effectively the FTA and the FTA upgrade have worked to promote trade between the two countries. Pakistan is another example. We inked the China-Pakistan FTA in the past, with a low level of trade liberalization. We upgraded the FTA the year before last. After the upgrade, the level of liberalization has increased. Pakistan's exports to China have grown rapidly, and the trade imbalance between China and Pakistan has also been narrowed.
Third, FTAs have greatly promoted China's opening-up. In terms of trade in goods, China has an average most-favored-nation tariff rate of 7.5%. Under FTAs, China and its trading partners implement zero tariffs on 90 percent of products, so the level of tariff liberalization in goods trade is very high. In terms of trade in services, of the 160 services sub-sectors under the 12-sector WTO classification, China committed to opening up 100 sub-sectors under 9 sectors when entering the organization. By promoting free trade agreements, we have greatly enhanced the openness of trade in services. Take the RCEP agreement as an example. China added 22 new services sectors to the 100 sectors it committed to open upon its accession to the WTO, and raised the level of openness of 37 sectors. In terms of investment, there are no agreements regarding investment openness in the WTO. The FTAs have created many rules regarding investment openness, investment market access, investment facilitation, and investment protection, which will help develop mutual investment between China and its FTA partners, and advance regional integrated development to form more stable industrial and supply chains.
We will further expand opening-up by signing more free trade agreements and upgrading our existing free trade agreements. In accordance with the decisions and deployments of the CPC Central Committee and the State Council, we will step up our efforts to build a network of high-standard free trade zones, which focuses on neighboring economies, radiates across the Belt and Road Initiative-related economies, and has a global reach. Next, we will upgrade our existing free trade agreements, including the China-Singapore FTA and the China-ROK FTA. At the same time, we will accelerate negotiations on new agreements, including the China-Japan-ROK FTA, China-Gulf Cooperation Council FTA, China-Israel FTA and China-Norway FTA. We are actively considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). We will thoroughly implement the decisions and deployments of the CPC Central Committee. Thank you.
According to the website of the World Trade Organization (WTO), the organization's 12th Ministerial Conference will be held in November. The WTO is now facing challenges, and all parties have paid close attention to how the WTO will get through the difficulties. My question is that after the 18th CPC National Congress in 2012, what role has China played in safeguarding the multilateral trading system? Additionally, what achievements can we expect from the 12th WTO Ministerial Conference? Thanks.
王文涛:
这个问题非常及时，也很专业，各方也特别关注。请王受文先生回答。
Wang Wentao:
Your question is a timely and professional one. All parties have attached great importance to it. This question goes to Mr. Wang Shouwen.
Thanks for your question. Just as you mentioned, the WTO is currently facing severe challenges, and is in a difficult situation. For example, the WTO Appellate Body has been paralyzed, making it quite hard to defend justice in international trade. In terms of facilitating trade negotiation, it's not easy to reach multilateral trade agreements now. In particular, some countries have politicized trade issues and taken unilateral and protectionist trade measures, greatly undermining the efficacy and authority of the multilateral trading system. As a responsible member of the WTO, China has always been an active participant in all the work and trade negotiations of the WTO since it joined the organization. China was and remains committed to supporting the multilateral trading system and has actively participated in relevant reforms to the WTO. China is an active participant, strong supporter and major contributor in the multilateral trading system.
You asked about the work we have done in the WTO since the 18th CPC National Congress. Let me give you an example. In 2013, China actively participated in the WTO Ministerial Conference held in Bali, Indonesia, and worked hard towards the conclusion of the Trade Facilitation Agreement. The full implementation of the agreement has successfully cut the cost of international trade by around 14%. In 2015, China took an active part in the WTO Ministerial Conference in Nairobi, during which we agreed to eliminate export subsidies for agricultural products, which was a boon for agricultural trade liberalization. Also, during this conference, as an important participant, China actively pushed for the conclusion of an agreement on expanding the products covered by the Information Technology Agreement, involving a global trade volume of over one trillion U.S. dollars. This was a significant contribution. In addition, China has played an active and important role in advancing negotiations on topics including investment facilitation, e-commerce, and micro, small and medium-sized enterprises.
General Secretary Xi Jinping has reaffirmed on many international occasions China's commitment to firmly upholding WTO rules, supporting necessary reforms to the WTO and jointly safeguarding the multilateral trading system with other members. China has made great efforts towards reform of the WTO. In June of 2018, a white paper titled "China and the World Trade Organization" was released, explaining China's concrete measures to support the multilateral trading system. In November of 2018, China released its position paper on WTO reform, outlining three principles and five suggestions for reform. In May of 2019, China submitted its WTO reform proposals for concrete actions concerning 12 topics in four areas. This is also the first reform proposal submitted by a developing country to the WTO. In November of 2019, China hosted the Informal WTO Ministerial Meeting in Shanghai and encouraged all parties to reach an important consensus on safeguarding the multilateral trading system. China, the European Union and other WTO members agreed last April on an interim appeal arbitration arrangement while the organization's Appellate Body remains incapable. In other multilateral mechanisms of global governance, including the G20, APEC and the BRICS, China has also advocated to support the multilateral trading system. On all such occasions, China has stated its position on building an open world economy and a community with a shared future for mankind.
The 12th WTO Ministerial Conference you mentioned will be the first in four years. The last Ministerial Conference took place in Argentina in 2017. There are many expectations for the upcoming conference. In our opinion, the extent to how many achievements will be made during the conference is of great significance to enhancing the WTO's image and the international community's confidence in the WTO. We expect that achievements will be made in negotiations on fishing subsidies and the fight against COVID-19. We hope there will be some arrangements regarding the reform of the Appellate Body. We are also looking forward to positive progress in service domestic regulation, investment facilitation and e-commerce. Such outcomes will all help enhance the international community's confidence in the efficacy and authority of the WTO. To achieve these, we will support Ngozi Okonjo-Iweala, the Director-General of the WTO, in organizing and coordinating effective negotiations among WTO members, to achieve practical progress and fully demonstrate the organization's value and role.
This year marks the 20th anniversary of China's accession to the WTO and also the start of the 14th Five-Year Plan. China will open its door even wider to the world. We will work, in line with the arrangements made by the CPC Central Committee, to propose China's suggestions and approaches for WTO negotiations and reform. In addition to accelerating the building of the new development paradigm and the promotion of high-level opening-up, we will join hands with our trade partners across the globe to make economic globalization open, inclusive, balanced and beneficial to all. Thanks.
Convenience is a new demand for people seeking a better life, which is also an important sign of moderate prosperity in all respects. What work has the Ministry of Commerce done to improve the circulation network and facilitate household consumption? In which areas will further efforts be made in the future? Thank you.
Thank you for your questions. I will answer them. Circulation is connected to production at one end and consumption at the other, and it has a fundamental and leading role in the national economy. The development of China's circulation industry has been very rapid, making big steps, especially in terms of internationalization, standardization, intelligence, intensification, and informatization. It is moving relatively fast, and in some aspects, it is leading the world. Our circulation efficiency is improving while costs are gradually decreasing. In 2020, for the total logistics cost for the entire society – that means, total logistics costs as a percentage of GDP of China – dropped to 14.7%, which is a decrease of 3.3% compared with 2012. Chain operation, e-commerce, logistics and distribution, smart stores, contactless distribution, unmanned retail, and other new business formats and models continue to emerge, some of which represent forced model innovations due to the COVID-19 pandemic and other situations. Many of these innovations are ahead of the rest of the world. Circulation efficiency is as important as production efficiency, and it is an important aspect of improving the overall operating efficiency of the national economy.
The developments mentioned above are indeed good, but we will also see some problems and shortcomings during development. Although the share of total national logistics costs in China's GDP has dropped to 14.7%, it is still relatively high compared to those of developed countries. So we may encounter logistics costs that are relatively high, and that enterprises' complaints are also relatively strong. Next, we will be problem-oriented to make up for these shortcomings, strengthen the weaknesses, and make efforts in the following aspects.
First, in rural areas, we will launch county-level commercial system construction campaigns. Rural commerce still has great potential, but it is constrained due to shortcomings in circulation. For example, logistics coverage and express deliveries cover 99.7% of areas at the township level but only a little over 50% at the village level. This shortcoming restricts the further development of rural consumption. We propose to promote the construction of a rural commercial system based on the principles of "county-level overall planning, with counties as the center, towns as the focus, and villages as the foundation." Additionally, we'll encourage and promote the "three sinks" by market-based means: the sinking of the supply chain of enterprises to small-town and rural markets, which mainly encourages the marketing network of large-scale circulation enterprises to extend to the countryside and provide distribution and standardized procurement for some small merchants serving millions of households in rural areas; the sinking of logistics and distribution to small-town and rural markets, including the integration of resources in e-commerce distribution, postal services, supply and marketing, and the express delivery, as we encourage them to sink further; and the sinking of commodities and services to small-town and rural markets so that rural commodity consumption can adapt to the characteristics of rural areas. Service consumption is a shortcoming worth singling out among all the shortcomings in rural areas, and we must continue to strengthen it, including by providing better after-sales service. By encouraging the "three sinks," we realize the building of the rural commercial system, which are the sinking of the supply chain of enterprises, the sinking of logistics, and the sinking of goods and services.
Second, in terms of urban areas, in addition to building international consumer cities, business districts, pedestrian streets, and characteristic urban neighborhoods, we will also extend the "last mile to your home" development, i.e. the community, to create convenient living circles that people can reach within 15 minutes from their residence. We will accelerate the construction of wet markets, convenience stores, and comprehensive community service centers. We will accelerate the development of branding and chaining convenience stores, support enterprises in their digital transformation, innovate business models, promote convenient consumption, and push forward the construction of standardized wet markets.
Third, we will improve commercial circulation facilities. We will mainly focus on shortcomings to exert our strength. Currently, the shortcoming worth singling is cold chain logistics. The cold chain circulation rate of meat in China is only 30%, and that of fruits and vegetables is less than 20%, while that of developed countries is more than 90%. Therefore, our next step is to promote cold chain logistics for agricultural products, speed up the construction of cold chain logistics, and make up for these shortcomings.
Fourth, we will strengthen emergency guarantees. After the COVID-19 outbreak, the Ministry of Commerce, in accordance with the requirements of the central government, worked with relevant government departments, commissions, and localities to form a nine-province joint supply and guarantee mechanism to ensure the supply of daily necessities in Hubei province and Wuhan city. Recently, as we witnessed new outbreaks of the pandemic in various places, coupled with floods in some places, media outlets reported that there were some instances of panic buying and that the supply of materials encountered some difficulties. In addition, due to the pandemic prevention and control measures, logistics has not been so smooth or even blocked in some places for a short period of time, resulting in some particular supply shortages. In response, we immediately launched a joint guarantee and supply mechanism, with localities as the main body, strengthening the supply of materials in various regions. Then, things tended to return to normal quickly, ensuring that people could go on with their daily lives. Next, we will try to improve the provision of early warning predictions based on big data. If there is a shortage of goods in some places due to the supply being affected, and there is abnormal data, we must give reminders and warnings, and then we must immediately activate the joint guarantee and supply measures. We also particularly hope that media outlets will continue to strengthen supervision in this area and report relevant emerging situations in a timely manner. We will pay attention to the media reports on the one hand, and on the other hand, through our system, including the system of government functional departments and the monitoring system we have established, we can reflect on the situation and respond promptly, quickly, and accurately, making sure that no matter what happens, the basic guarantee of the people's daily necessities can be met. Thank you.
The Political Bureau of the CPC Central Committee held a meeting on July 30. During the meeting, General Secretary Xi Jinping stressed that China should align its efforts to consolidate and expand the achievements in poverty elimination with an emphasis on promoting rural vitalization. To our knowledge, the MOFCOM has introduced numerous commerce-related assistance measures, such as reducing poverty via e-commerce. What will be done next to help extensively promote rural vitalization? Thank you.
王文涛:
这个问题我在开场白的时候点到了，请钱克明副部长回答。
Wang Wentao:
I've covered this in my opening remarks. Mr. Qian Keming will further elaborate on your question.
As Mr. Wang pointed out in the opening remarks, commerce-related work stretches from urban to rural areas, connects China with the rest of the world, and synergizes production and sales, thus giving it special advantages in poverty alleviation. We have fully leveraged its strengths in this regard by introducing a policy package in five aspects and attracting all sectors of society to actively engage in the work and effectively help develop industries in poverty-stricken areas, boost employment, and increase farmers' incomes.
First, reducing poverty through the e-commerce industry. Currently, the e-commerce industry has become one of the most direct and effective ways to help poor people escape poverty and increase their incomes. The MOFCOM has carried out comprehensive demonstration projects in which e-commerce has been brought to rural areas and covered all national-level poverty-stricken counties across the country. The MOFCOM also organized large e-commerce enterprises to establish public welfare channels on e-commerce poverty alleviation work, and developed rural e-commerce brands. Preliminary statistics show that e-commerce has helped some 7.71 million farmers either start a business or find employment locally. Meanwhile 6.19 million people have seen their incomes increase.
Second, reducing poverty through the housekeeping industry. The housekeeping industry is a small but powerful lever for poverty alleviation work. The MOFCOM has carried out poverty alleviation projects in this regard and built connections between housekeeping firms and national-level poverty-stricken counties. A total of 31 export centers for housekeeping workforces have been established, and more effort has been made in the training of housekeeping staff. The scheme helped employed more than 850,000 people in poverty-stricken areas, thus helping their families step out of poverty.
Third, reducing poverty through the export of labor. Employment channels have been expanded via the export of labor. The MOFCOM has built connections between labor export enterprises and poverty-stricken areas, funneled more resources into these regions, and supported labor in poor areas to work abroad. Over the years, some 146,000 people have been sent abroad to work. Their average annual income exceeded 100,000 yuan, with some even earning 300,000 to 400,000 yuan a year. Hence, those people working abroad can help their whole family emerge from poverty and thus bring an economic boom to the region.
Fourth, reducing poverty through the development of industry, industrial development has expanded the market. The MOFCOM has held a series of events to synergize production and sales, with contracted purchases reaching 42 billion yuan over the years. The MOFCOM also works to reduce poverty through consumption and encourages commodity circulation enterprises across the country to set up booths for poverty alleviation products, which has expanded sales channels for agriproducts. From the 122nd to the 128th Canton Fair, companies from poverty-stricken counties were exempted from a total of 86.69 million yuan in booth expenses, and inked deals worth more than $1.7 billion.
Fifth, reducing poverty through border trade. In this sense, border trade has facilitated poverty alleviation via openness. The MOFCOM has worked proactively to improve policies concerning border trade and promote its diversified development. This has reduced poverty for some 500,000 people in the border regions and helped increase their incomes. A three-year action plan on paired assistance has been carried out in which 24 national-level economic development zones in eastern China now cooperate with 19 economic cooperation zones in either border or cross-border regions. In this way, high-quality development of the economy in border regions has been better facilitated.
As China has secured a complete victory in the battle against extreme poverty and kicked off a new chapter toward rural vitalization, the MOFCOM will continue to make coordinated efforts and make commercial resources more accessible at the community level. Just now, Mr. Wang mentioned that the outreach of commercial resources should be expanded to the community level in three aspects. The MOFCOM will improve the circulation of commodities, expand openness and cooperation, and boost employment so as to align efforts to consolidate and expand the achievements in poverty elimination with efforts to promote rural vitalization. In terms of improving commodity circulation, the MOFCOM will strengthen the establishment of a three-tier logistics system at the village, township, and county levels in poor areas, improve trunk circulation networks for agriproducts, and precisely synergize production and sales. A project which boosts agricultural development through e-commerce will also be carried out. In terms of openness and cooperation, the MOFCOM will improve the assistance programs of the Canton Fair, promote the on-the-spot processing of imported goods in border trade, and facilitate the relocation of the processing trade. The MOFCOM will also launch a campaign to introduce hundreds of enterprises to border regions. An open and cooperative platform will be built for regions that have shaken off poverty. In terms of boosting employment, the MOFCOM will launch a campaign that will help farmers shed poverty through the housekeeping industry. Regional brands for housekeeping labor will be built. The MOFCOM will continue to help export labor and promote stable employment for people who have shaken off poverty. All these tasks require us to further enhance the economic vitality and sustain impetus for further growth in poor areas, and keep the smooth economic circulation between urban and rural areas so that poor regions can be better integrated into the new pattern of development and make new contributions to comprehensive rural vitalization. Thank you.
My questions are related to the Belt and Road Initiative (BRI), put forward by President Xi Jinping in 2013. What achievements have MOFCOM made in promoting the initiative? And what contributions have been made in building a community with a shared future for mankind? What is the situation regarding China's investment in countries along the Belt and Road this year? And what are MOFCOM's investment plans going forward? Thank you.
China has been actively promoting mutual development and prosperity between China and the rest of the world in its course of building a moderately prosperous society in all respects. In 2013, President Xi Jinping proposed the BRI with a focus on building a community with a shared future for mankind. Over the past eight years, fruitful outcomes have been achieved in the process of advancing the grand visionary initiative through practical actions; and a highly extensive platform for international cooperation has been formed as a global public good which has been extremely popular. Next, I will introduce the progress made by MOFCOM in promoting the BRI from five aspects:
First, unimpeded trade was deepened. We promoted the high-efficient flow and rational distribution of resources. China has positively expanded imports, developed new forms and models of business such as cross-border e-commerce, promoted the construction of overseas warehouses, stepped up efforts to build grand trade passageways including China-Europe freight routes and the New International Land-Sea Trade Corridor, and shaped a network of free trade zones built with high standards. Between 2013 and 2020, China registered $9.2 trillion in total volume of goods trade with other Belt and Road countries.
Second, investment and cooperation continued to be improved and industrial and supply chains were established for mutual benefit. China focused on facilitating outward investment and cooperation, deepened international production capacity cooperation, and promoted trilateral and multilateral market collaboration, as well as actively attracting overseas enterprises to invest and operate their businesses in China. From 2013 to 2020, China invested a total of $136 billion directly into other Belt and Road countries, and a total of 27,000 enterprises from other Belt and Road countries were established in China, with total investment volume reaching approximately $60 billion.
Third, cooperation projects were effectively implemented and partnerships for improving connectivity were deepened. China, with host countries, jointly promoted infrastructure connectivity, accelerated the construction of green projects and projects related to people's well-being, and co-established overseas economic and trade cooperation zones. Between 2013 and 2020, Chinese enterprises registered a turnover of $640 billion in contracted projects in other Belt and Road countries. As of the end of 2020, the economic and trade cooperation zones built by Chinese enterprises in these countries had seen investment of nearly $40 billion, paying fees and taxes to the host countries exceeding $4.4 billion, and creating 330,000 jobs for local people.
Fourth, we set up and improved various mechanisms and platforms to provide tremendous opportunities for boosting openness and cooperation. So far, China has signed more than 200 cooperation documents with 172 countries and international organizations to promote the BRI, increasing its circle of friends. MOFCOM made efforts to build more than 90 bilateral cooperation mechanisms regarding unimpeded trade, investment and cooperation, service trade, and e-commerce to tackle problems encountered when cooperating via practical measures. At the same time, the successes of the CIIE, Canton Fair, CIFTIS and China International Consumer Products Expo have significantly boosted trade connections with the countries and regions involved.
Fifth, we wrote a vivid chapter in building a community with a shared future for mankind when we worked together to fight against the COVID-19 pandemic with vigorous and effective measures. Faced with the sudden outbreak of the pandemic, China, while endeavoring to ensure proper domestic prevention and control measures, cooperated with other countries to overcome difficulties through mutual assistance. China has so far provided emergency assistance to 150 countries and 13 international organizations, and exported anti-epidemic supplies to more than 200 nations and regions, and is providing vaccine assistance to 102 nations and four international organizations.
Going forward, MOFCOM will follow the decisions and arrangements of the CPC Central Committee and the State Council, continue to deepen economic and trade cooperation through the BRI, boost trade using well rounded approaches, make investments and build cooperative relationships innovatively, improve relevant platforms and mechanisms, strengthen risk prevention and control, and realize high-quality development through the BRI, thus making continued contributions to building a community with a shared future for mankind, with deeper and more solid measures. Thank you.
Foreign trade is one of the "three carriages" driving China's economy, contributing much to the country's employment and taxes, and playing a vital role in building a moderately prosperous society in all respects. Faced with the complicated global trade situation, what are MOFCOM's forecasts for China's foreign trade in the future? What policies and measures will you be taking? Thank you.
First, foreign trade has promoted the steady development of the economy. In 2020, the scale of China's foreign trade hit a record high of $4.6 trillion, accounting for 14.7% of the international market share. Second, it has fueled supply in the domestic market. The CIIE planned, arranged and promoted by Xi Jinping, general secretary of the CPC Central Committee, has boosted imports, and provided numerous commodities favored by Chinese consumers. With imported goods going to ordinary supermarkets and millions of households, consumers now have more options. Third, it has expanded employment and taxes, bringing jobs to around 180 million people.
Since the 18th CPC National Congress in 2012, China's foreign trade has contributed a total of 11% to the country's total financial revenue, while maintaining a stable foreign exchange reserve of around $3 trillion. It has effectively guaranteed the sound balance of international payment for a huge country like ours. China has already become the world's largest trading nation in goods. Last year, it ranked first in terms of total trade volume in goods and services globally.
How do we perceive this situation? China's foreign trade maintained an upward momentum in the first seven months of this year, with an increase of 24.5% year on year, hitting a 10-year high. This growth can be attributed to multiple factors, while of which are one-offs. Given the temporary nature of these one-off factors, we think the situation in the first half of next year will be very serious. For example, the increasingly severe pandemic situation in surrounding regions brought about the re-shoring of orders, with many orders shifting to China. However, as the pandemic has gradually been curbed, these re-shored orders might be transferred back. The exports of medical supplies such as masks, medical isolation gowns and respirators soared at the beginning of the pandemic. Now, there has been a sharp decline as these one-off factors fade away. We see growth gradually slowing as the second half of 2021 gets under way. We may encounter more severe challenges next year. At the same time, our economy started to recover from the second half of last year. Given the huge numbers, the rapid pace of recovery cannot be sustained for a long time. We hope the recovery will slow down in a gradual manner with growth eventually stabilizing within a reasonable range. Improving the cross-cycle policy adjustment will allow the economic fluctuations to stabilize within a reasonable range, and prevent harm from dramatic fluctuations in economic growth and market entities. So, for the second half of this year, we will concentrate on improving the cross-cycle policy adjustment in a bid to keep foreign trade within a reasonable range. Specifically, we will focus on four aspects: stabilizing growth, promoting innovation, ensuring a smooth flow in industrial and supply chains and expanding cooperation.
We will stabilize growth, mainly in terms of market entities and orders. We are still faced with some difficulties, which are also commonly seen in the international community, such as limited shipping capacities and expensive shipping fees, rising prices of bulk commodities and raw materials, pressure caused by the rising renminbi exchange rate, and rising labor costs. These are the four main issues being faced by foreign trade companies. Small- and medium-sized enterprises (SMEs) are facing rather difficult circumstances. Therefore, we will take a series of measures to stabilize market entities and orders.
We will promote innovation. Besides the traditional foreign trade activities, we will fully promote the development of new business forms and patterns, such as cross-border e-commerce and exports of high-tech, high-quality and high added value products. We will also step up efforts to promote Chinese brands overseas.
保畅通，保证我们的外贸产业链、供应链畅通。
We will ensure a smooth flow in both foreign trade industrial and supply chains.
We will expand cooperation. Due to time constraints, I will condense this point as deepening international economic and trade cooperation. As Mr. Wang said earlier, we should deeply integrate the efforts in protecting the multilateral trading system, negotiating FTAs and upgrading FTAs into overall international economic cooperation, and better play our part in promoting development of the globe and Chinese foreign trade. Thank you.
陈文俊:
时间关系，再提最后一个问题。
Chen Wenjun:
Due to time constraints, we will take one last question.
We have noted that last year, global cross-border direct investment fell by about 40%, but foreign investment in China registered a trend-bucking rise of 4.5%. This suggests that foreign investors are still optimistic about the Chinese market. What role has foreign investment played in China's efforts to build a moderately prosperous society in all respects? Some foreign-funded enterprises are worried that foreign investment will no longer be needed to foster a new development paradigm. What's MOFCOM's take on this? What other measures will be taken to attract foreign investment? Thank you.
Thank you for your question – I'll answer it. I completely agree with your conclusion that foreign investors are still optimistic about the Chinese market. Your question involves three aspects: first, the role foreign investment plays; second, our view on some foreign investors' concerns; third, what measures should be taken next. I will respond to these three aspects individually.
Here, I'll make a simple evaluation of the role and contributions of foreign investment. China has always been an important destination for foreign investment. Since the 18th CPC National Congress, the overall scale of foreign investment flowing into China has been on the rise and has been the second largest worldwide over the past four years. Especially last year, despite a 40% drop in global foreign investment, foreign investment entering China grew by 4.5%, bucking the declining global trend. This type of investment is not easy to come by. As an important part of China's market entities, foreign-funded enterprises have made unique and significant contributions to the country's economic and social development. Foreign enterprises account for 2% of all market entities in China and have created about 40 million jobs – one-tenth of the employed urban population. Additionally, they have contributed to one-sixth of China's tax revenue and two-fifths of imports and exports. This fully shows that foreign-invested enterprises are important participants in, witnesses, and contributors to China's building of a moderately prosperous society in all respects. While foreign enterprises contribute to China's development, they themselves have also grown well in the country. The Chinese market has become an important and even main source of profit for some multinational companies. According to a survey by foreign chambers of commerce, 56% of U.S. enterprises, 73% of European enterprises, and 89% of Japanese enterprises in China made profits last year despite being affected by the pandemic.
We put forward fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. Some one-sided interpretation of the paradigm focuses too much on the domestic circulation as the mainstay and worries about the discarding of foreign investment. This is a complete misunderstanding. General Secretary Xi Jinping has stressed many times that a new development pattern is by no means a closed domestic circulation, but a more open dual circulation that allows domestic and overseas markets to reinforce each other. In fact, most foreign enterprises in China are practitioners of dual circulation. Their domestic circulation is "in China and for China." They purchase, produce, and sell in China and are deeply integrated into the country's domestic circulation. At the same time, these companies have contributed two-fifths of China's imports and exports, which have also promoted domestic and international dual circulation.
下一步我们将采取哪些措施？还是四个方面：扩开放、强服务、保权益、优环境。
Next, we will take measures in four aspects: expanding opening-up, strengthening services, safeguarding rights and interests, and improving the business environment.
First, we will open wider. Mr. Wang Shouwen has mentioned this. Just now, I also spoke about how we will further shorten the negative list and accelerate the efforts to formulate the 2021 version of the negative list. By widening the market access and relaxing the restrictions, we will open wider. We have also promoted negotiations on some free trade agreements and actively facilitated and participated in WTO reforms.
Second, we will step up efforts to guarantee services. We have set up special work teams with 20 departments and key provinces to help vital foreign enterprises and projects solve problems. The special teams have been operating normally. The Investment Promotion Agency of the Ministry of Commerce has established a National Center for Complaints of Foreign-Invested Enterprises – their telephone number is 010-64404523. All provinces and cities in the country have agencies for complaints from foreign companies, not only the MOFCOM, which can be checked on the official website of MOFCOM. If foreign enterprises encounter any difficulties or problems, they can solve them through coordination at different levels. This is what it means to "strengthen services."
Third, we will enhance protection of the legitimate rights and interests of foreign investors. We will make good use of the complaint mechanism and better protect their rights and interests in accordance with the law.
Fourth, we will continue to improve the business environment. We will effectively implement the Foreign Investment Law and its implementation regulations, improve the supporting systems, and foster a business environment that is based on market principles governed by law and up to international standards. As General Secretary Xi Jinping has said, China will open its door only wider to the world. We're happy to see that foreign companies invest in China and can share the dividends of China's reform and development. Thank you.
