Market News International:
I want to ask more about foreign investment in China. Due to sluggish domestic consumption, rising costs and fierce competition, returns on investment are declining. The Trump administration has said on many occasions that U.S. enterprises would be restricted in making fresh investments in China. How does the commerce ministry assess the willingness and trend of foreign investment in China in one or two years against this background?
Wang Shouwen:
Thank you for your question. Although costs of production factors have been rising in recent years, including labor and land costs, China's economic growth reached 6.3 percent in the first half of this year. Such a growth was driven largely by domestic consumption that contributed 60%. This shows China has a huge market and one that is very attractive to foreign investment.
There are indeed aspects of trade friction and restrictions, but the pull of China's huge market is not to be underestimated. At the same time, China has very clear policies for attracting foreign investment. General Secretary Xi Jinping has stated many times that China's policies for the utilization of foreign investment will remain unchanged, China will continue to protect legitimate interests of foreign companies investing in China, and China will keep offering better services to foreign companies investing in China. A stable environment is very attractive to foreign investment.
Just as Minister Zhong has said, China's inbound investment ranked second in the world. How does China achieve this? First, China is making serious efforts to attract foreign investment. Foreign investment has already created 10% of all jobs in urban areas, 20% of domestic taxes, and 40% of exports and imports over the past 40 years since the reform and opening up began. Also, in the past 40 years, foreign companies investing in China have gained great benefits. For instance, American enterprises investing in China earned $700 billion in revenues last year. Many of them have made more in the Chinese market than in their home market. They value the Chinese market very much, so they are willing to invest in it. The Chinese government has adopted a series of measures to support foreign investment. We have progressed solidly in opening up and easing market access for foreign investment.
China issued the first negative list in 2013 when the China (Shanghai) Pilot Free Trade Zone was established. The list included more than 190 restrictive measures. Now, the number is reduced to 37. We not only work hard to expand access for foreign investment, but also protect the interests of foreign investors. This year, the "Foreign Investment Law" was unveiled, giving foreign companies equal treatment with Chinese companies. We set up a complaint mechanism for foreign investment, and we continue to take measures to facilitate and promote foreign investment. For example, China has simplified approval procedures for foreign investment, meaning that 99% of foreign companies only need to register with the commerce supervision authorities. For foreign companies investing in central and western China, and in some advantaged industries, we have formulated a guidance catalogue. Moreover, we have developed platforms for attracting foreign investment. We have worked hard to attract foreign investment to our free trade zones and development areas. These measures have ensured smooth access to Chinese market for foreign investors, and their legal interests have been given due protection. In the future, we will promote the implementation of these laws and policies, open wider to the world, and improve the environment for foreign investment utilization. As a result, I feel optimistic for our utilization of foreign investment.
L'Independant Mali:
During the past 70 years, China and Africa have developed a strong relationship in terms of trade. What are the main achievements made so far? What are you planning to do to consolidate and improve the outcomes? Thank you.
Qian Keming：
Thanks for your question. Due to the concerns of the leaders of China and African countries over the years, and thanks to the joint efforts from both parties, Sino-African economic cooperation has witnessed great development, with its cooperation framework becoming all-round, multi-level and wide-ranging. China has been Africa's largest trading partner for the past 10 years, and Africa is an emerging investment destination for Chinese companies. By the end of 2018, the stock of Chinese direct investment in Africa had exceeded $46 billion, with more than 3,700 Chinese enterprises making such investments. Africa has become China's second largest overseas contracting market. In 2018, the value of the new contracts signed between China and African countries reached $78.4 billion. At the 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC), General Secretary Xi Jinping pledged to work toward an even stronger China-Africa community with a shared future for all, and proposed "eight major initiatives" covering cooperation in the next three years and beyond, providing political guidance and strategic plans for the development of China-Africa relations in the new era. We will further deepen China-Africa economic and trade cooperation by following the principle of sincerity, real results, affinity and good faith and the principle of pursuing the greater good and shared interests, pursuing the objective of jointly promoting the Belt and Road Initiative, and focusing on the implementation of the "eight major initiatives".
Regarding our future plans, we actually have many, but I'm not going to elaborate on all of them here. Instead, I'd like to talk about three aspects.
First, we will support African countries to enhance their own capability to develop. The way we used to adopt to help them was like "providing blood"; now, we are going to help African countries to "produce blood". We will take industrial cooperation as the major driving force to support the transformation of Africa's economic structure, its industrial development in particular. At the same time, we will focus on infrastructure development, and accelerate the development of connectivity and the integration process.
Second, we will pool the resources and forces of various parties. We know that China-Africa cooperation is a big game. In China's case, in the past, the central government played a major role. In the future, the central government will work jointly with local governments to continue the work. We are going to shift from the government-centered approach to the joint coordination of government, enterprises, financial agencies, commercial associations and the private sector. In addition, we will fully mobilize external resources to carry out trilateral cooperation, with developed countries and international agencies as major partners, so as to expand channels of cooperation with African countries.
We will also work to transform and upgrade the cooperation model. We will focus on the following three tasks. The first is to deepen investment cooperation with African countries and encourage more local and private enterprises to invest in the region, thus creating employment and foreign exchange. By promoting the model of the economic and trade cooperation zones, we hope to develop a group of industrial clusters covering mining, light industry, textiles, construction materials, home appliances, automobiles, and even some high-tech industries. The second is to continue to expand trade with Africa and increase imports of non-resource products. As we all know, we have platforms such as the China International Import Expo and the China-Africa Economic and Trade Expo. The latter is held especially for Africa in central China's Changsha city. We will give full play to the role of these platforms and expand our imports from Africa. The third is to strengthen infrastructure construction. As I mentioned earlier, from the perspective of infrastructure construction cooperation, we will gradually diversify the model from EPC to BOT, PPP and the integration of investment-construction-operation, and guide financial institutions and enterprises to try new cooperation models in investment and financing. Thank you.
