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Speaker:

Ms. Wang Chunying, deputy administrator and spokesperson of the State Administration of Foreign Exchange (SAFE)

Chairperson:

Mr. Xie Yingjun, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 21, 2023

Xie Yingjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are joined by Ms. Wang Chunying, deputy administrator and spokesperson of the State Administration of Foreign Exchange (SAFE). Ms. Wang will brief you on China's foreign exchange receipts and payment data in the first half of 2023 and take your questions.

Now, I will give the floor to Ms. Wang.

Wang Chunying:

Good morning. Welcome to today's press conference. I will start by introducing China's foreign exchange receipts and payment data in the first half of 2023 and then take your questions.

In the first half of 2023, the global economic recovery faced significant challenges amid a complex and difficult global financial market and geopolitical landscape. Under the strong leadership of the Central Committee of the Communist Party of China (CPC), China has focused on the primary task of pursing high-quality development, and has seen an upturn in the domestic economy. The country's foreign exchange market demonstrated resilience in several aspects. Notably, expectations of the RMB exchange rate remained stable; cross-border capital flows sustained in a stable and orderly manner; the supply and demand of foreign exchange market remained balanced; and both cross-border receipts and payments by non-banking sectors as well as the foreign exchange settlement and sales by banks registered a surplus.

For cross-border receipts and payments by non-banking sectors, in U.S. dollar terms, banks registered $3.0259 trillion in foreign-related receipts and $2.9792 trillion in foreign-related payments for customers, which represented a surplus of $46.7 billion. Or in yuan terms, banks handled foreign-related receipts of 20.9746 trillion yuan and payments of 20.6526 trillion yuan for customers, recording a surplus of 322.1 billion yuan. According to data on foreign exchange settlement and sales by banks, in the first half of 2023, in U.S. dollar terms, banks settled $1.1325 trillion and sold $1.1307 trillion, representing a surplus of $1.8 billion. Or in yuan terms, banks settled 7.8482 trillion yuan and sold 7.8338 trillion yuan, recording a surplus of 14.3 trillion yuan.

In the first half of 2023, China's foreign exchange receipts and payments have demonstrated the following characteristics:

First, cross-border capital flows remained stable with net inflow momentum. In the first half of 2023, the total amount of cross-border receipts and payments by non-banking sectors exceeded $6 trillion, which was the second highest level in history during the same period. In terms of the balance, foreign-related receipts and payments have seen a surplus. Specifically, the surplus of foreign-related receipts and payments reached a seasonal high in January 2023. This can be attributed to factors such as enterprises rushing to collect foreign exchange before Spring Festival. During the February-May period, the amount of foreign-related receipts and payments remained basically the same. The size of surplus rebounded to $12 billion in June. Based on quarterly data, we have also seen a surplus for two consecutive quarters.

Second, foreign exchange settlement and sales by banks recorded a small surplus, and the supply and demand of the overseas foreign exchange market remained basically balanced. In the first half of the year, the overall foreign exchange settlement and sales by banks recorded a surplus, and the supply and demand of foreign exchange sustained a basic balance upon consideration of other factors in this regard. According to quarterly data, foreign exchange settlement and sales by banks recorded a small deficit in the first quarter and this turned into a surplus in the second quarter. Particularly in June, despite the increasingly complex external environment, foreign exchange settlement and sales by banks recorded a surplus of $8.2 billion, which was significantly higher than the monthly average in the previous months.

Third, the foreign exchange sales rate increased, and the foreign exchange financing by enterprises remained stable. In the first half of 2023, the sales rate, a measure of customers' willingness to buy foreign exchange, which is the ratio of foreign exchange purchased by customers from banks to foreign-related foreign exchange payments made by customers, stood at 69.2%, up 3 percentage points over the same period in 2022. In terms of foreign exchange financing, as of the end of June 2023, the outstanding domestic foreign exchange loans of market participants, such as Chinese enterprises, amounted to $274.9 billion, an increase of $3.7 billion from the end of 2022. The balance of foreign currency financing under international trade, such as import refinancing and forward letter of credit, stood at $67.4 billion, declining $9.4 billion from the end of 2022.

Fourth, the foreign exchange settlement ratio steadily increased, and the balance of enterprises' foreign exchange deposits declined. In the first half of 2023, the foreign exchange settlement ratio, a measure of customers' willingness to settle foreign exchange, which is the ratio of foreign exchange sold by customers to banks to customers' foreign-related foreign exchange receipts, reached 67.5%, up by 0.5 percentage point over the same period in 2022. As of the end of June 2023, domestic foreign exchange deposits held by Chinese enterprises and other market participants totaled $606.1 billion, declining $28 billion from the end of 2022. This suggests that the general willingness among market entities to hold foreign exchange remains stable.

Fifth, the volume of China's foreign exchange reserves remained basically stable. By the end of June 2023, China's foreign exchange reserves totaled $3.1930 trillion yuan, $65.3 billion more than the end of 2022, mainly due to the combined effects of currency translation, asset price changes and other factors.

Moving forward, SAFE will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. It will pursue progress while ensuring stability, uphold fundamental principles and break new ground. SAFE will pursue further reform and opening-up in the foreign exchange sector and prevent risks associated with external influences. It will ensure the security and circulation of foreign exchange reserves, while maintaining and increasing their value. It will also keep enhancing the capacity of foreign exchange management and leverage its enabling role in facilitating a new development paradigm and fostering high-quality development.

That concludes my introduction about the main statistics concerning China's foreign exchange receipts and payment data in the first half of 2023. Now, I'm happy to take questions from the media.

Xie Yingjun:

Everyone is welcome to pose questions. Before doing so, please let us know which news organization you represent.

CCTV:

Since the beginning of this year, the global economic recovery has seemed rather challenging. May I ask if China's current account has been impacted in any way? How do you view the future trend of China's current account? Thank you.

Wang Chunying:

Thank you for your questions. Since the beginning of this year, there have indeed been some changes in the global economy. These changes are now reflected in certain items of China's current account, primarily through a gradual return to normal levels. Overall, China's current account is still showing resilience, consistent with our prior evaluations. In the first quarter, the current account surplus amounted to $81.5 billion, a figure relatively high compared to the same period in history. The ratio of the current account surplus to GDP during the same period was 2%, which remains balanced and reasonable.

Preliminary statistics suggest that the current account surplus exceeded $50 billion in both April and May of this year. Given these figures, we anticipate that the current account surplus for the first half of the year will remain high. As for future trends, our assessment is that the reasonable surplus in China's current account will remain unchanged in the medium to long term.

Normally, the analysis of the current account focuses on two key items: goods and services. From the perspective of goods, new growth points for China's goods exports continue to surface, contributing to the stabilization of export volume and optimization of the export structure. In the first half of this year, external demand decreased, yet within this context, China's traditional export products, such as electromechanical and labor-intensive products, have remained stable. Also, exports of the frequently mentioned "three new products" (electric vehicles, lithium batteries and solar cells) have seen a fast year-on-year growth rate, reaching 51%. We also see that recently, the import of some intermediate goods for consumer electronics has demonstrated positive trends, and future exports of related finished products are expected to perform well. Therefore, from the perspective of major products, we have new growth points, the traditional base remains stable, and some imported intermediate goods show potential for future exports. Globally, China's export is generally better than that of most countries. From January to April, China's share of global exports still increased year on year. These are the main trends in goods trade.

In terms of service trade, due to COVID-related restrictions being lifted and various guarantees being restored, China's cross-border travel has shown signs of recovery, and related travel expenditures have also increased year on year but remain lower than pre-pandemic levels. The impact on the current account is controllable. 

I believe that this issue can also be evaluated from the perspective of the medium- to long-term determinants of the current account. The trend of the current account is determined by a country's manufacturing level and economic structure. From this viewpoint, we posit that China has a solid foundation to sustain a reasonable balance in its current account.

First, promoting high-quality development in manufacturing will continuously enhance the international competitiveness of Chinese products, providing a new thrust for China's foreign trade. Concurrently, the development of manufacturing and services will become integrated. In this process, the advancement and improvement of manufacturing will stimulate an increase in related productive service trade income.

Second, the economic structure serves as the long-term determinant of the current account. The current account mirrors the relationship between savings and investment. The fact that China sustains a surplus in the current account reflects that savings exceed investment. In recent years, China's economic structure has been continually adjusted, leading to a rise in the role of consumption within the national economy. However, China's savings rate remains relatively high on a global scale. Thus, from this perspective, our economic structure still contributes to maintaining a reasonable surplus in the current account.

So, in response to your questions, I would like to address it from the two aspects mentioned above. We analyze the prospects of the current account from the perspective of its composition. Also, we examine it based on the medium- to long-term determinants, such as manufacturing level and economic structure. China has a solid foundation for maintaining a reasonable surplus in its current account, and this pattern is expected to persist in the medium to long term.

That's my response to your questions. Thank you.

MNI:

I would like to ask whether the current significant spread between Chinese and U.S. interest rates is intensifying capital outflow pressure. Additionally, what kind of scenario might we expect in the Chinese bond market for capital investment in the second half of the year? Thank you!

Wang Chunying:

Regarding your questions, I provided a brief overview earlier. Now, I will explain it in more detail.

In the first quarter of this year, China's international balance of payments demonstrated a surplus in the current account and a deficit in the capital account, resulting in a self-balanced situation. The deficit in the capital account has continued its trend of stabilization since the second half of last year, and the total amount of various overseas investments has already recovered to net inflows. Looking at the first half of this year, cross-border capital flows have been relatively stable, and supply and demand in the foreign exchange market are essentially balanced. This answers your first question.

Your second question mentioned the future trend of capital investment in China's bond market. With regard to investment in bonds, despite the downturn in the global cross-border bond market since the beginning of this year, foreign investment in China's bond market has generally improved. Let's look at some data. If we don't take into account maturing bonds, foreign net purchases of domestic bonds amounted to nearly $79 billion in the first half of this year, reversing the trend of net sales last year. Especially in the second quarter, foreign net purchases of domestic bonds reached $58.5 billion, which was a relatively high quarterly level. If we take into account maturing bonds, foreign holdings of domestic bonds have increased for two consecutive months, while the net increase in foreign holdings of domestic bonds surpassed $11 billion in June. At the same time, in terms of holders, overseas central banks are still the major foreign-funded institutions investing in China's bond market. Overseas financial institutions have also played an active role in China's bond market. These factors fully show the value of Chinese bonds in investment and medium- and long-term asset allocation, which is demonstrated by current data.

Looking ahead, overseas investors will continue to steadily increase their holdings and allocation of RMB-denominated assets. This is because RMB-denominated assets still maintain advantages in investment diversification. The reason for that is China's monetary policy mainly serves the domestic economy and the trends in the RMB bond market differ from the bond markets in developed and emerging countries. Meanwhile, China is still the world's second largest bond market and has good liquidity, facilitating the diversified asset allocation of investors. This makes China's bond market attractive.

From the data, we can see that China's bond market has become an important option for global investment by overseas investors. As of the end of June, over 1,100 institutions from more than 60 countries had entered the interbank bond market. The level of transaction activity by overseas institutions has been rising and turnover has totaled over $2 trillion, a more than eight-fold increase since China significantly opened up its bond market in 2016. In addition, the scope of investment targets for foreign-funded institutions has been expanded. In addition to treasury bonds, policy financial bonds and interbank certificates of deposit, foreign-funded institutions have now gradually started investing in Chinese credit bonds such as short-term financing bonds and medium-term notes as well as asset backed securities and other investment targets.

In terms of policies, China has taken steady steps to advance the opening-up of the bond market, facilitating investment by overseas investors. It has launched the Bond Connect program and promoted the integration of Bond Connect with multiple channels, including QFII, RQFII and direct investment. The launch of the Swap Connect program this May is conducive to managing interest rate risks for overseas investors. Next, China will further optimize the opening-up of the bond market and continue to advance product and service innovation.

Overall, China will further open up the bond market in a gradual and controlled manner, striking a balance between efficiency and safety. This will leave room for stable and sustainable growth of foreign investment in China's bond market. That is all from me in response to your questions. Thank you.

Yicai:

According to the report to the 20th CPC National Congress, science and technology must be regarded as the primary productive force. What has SAFE done to support the financing of sci-tech innovation enterprises? What achievements have been made? What measures will be taken next? Thank you.

Wang Chunying:

Thank you. SAFE has fully implemented the decisions and plans of the CPC Central Committee and the State Council concerning the financial sector serving the real economy, further advanced the reform of foreign exchange management and adopted preferential policies for enterprises, effectively serving the scientific and technological innovation of enterprises, facilitating cross-border financing and lowering financing costs for enterprises. Most sci-tech enterprises, especially micro, small and medium enterprises (MSMEs), are still at the initial stage of their business ventures with relatively small or even negative net assets. The macro-prudential management of cross-border financing is based on the net assets of enterprises and allows enterprises to borrow money at their own discretion according to a certain coefficient. MSMEs, especially sci-tech ones, usually have small or even negative net assets and face difficulties in cross-border financing. In response, we have introduced a series of policies since 2018 and launched cross-border financing facilitation pilot programs in nine provinces and cities, facilitating high-tech enterprises to borrow foreign debt at their discretion up to a certain amount. The basic limit is $5 million, within which high-tech companies in pilot areas can receive foreign debt financing at their discretion.

In May 2022, we expanded the scope of pilot programs to include specialized and sophisticated enterprises that produce new and unique products and increased the number of pilot areas from nine provinces and cities to 17 provinces and cities, covering 80% of high-tech enterprises and specialized and sophisticated enterprises that produce new and unique products nationwide. At the same time, we raised the limit in the original nine provinces and cities to $10 million and set the limit to $5 million in the eight newly added pilot areas. So far, the average amount of foreign debt borrowed by eligible enterprises has reached $5.96 million, with an average interest rate of 2.64%, significantly lowering the financing costs of enterprises.

Next, SAFE will further expand the pilot programs on facilitating cross-border financing, bring more benefits to more enterprises, promote cross-border financing facilitation policies across the country, and raise the limits in all areas where early pilot programs have been launched to $10 million. That's our first consideration. Second, we will ramp up support for sci-tech SMEs and make cross-border financing facilitation policies available to support their innovative development. 

That is all from me in response to your questions. Thank you.

The Paper:

At present, the market believes that the U.S. Federal Reserve is likely to continue raising interest rates, but that it will soon come to an end. In this context, what are your expectations for the trend in China's foreign exchange market in the second half of this year?

Wang Chunying:

Your judgment is the same as ours. That is, the Federal Reserve is likely to continue raising interest rates but that this is coming to an end. Concerning the future trend in the foreign exchange market, to get a comprehensive overview, we should make observations and analysis based on both internal and external circumstances. That is also the characteristic of our foreign-related economy.

In terms of the economic fundamentals, China's economy will sustain its recovery momentum, providing stronger support for the foreign exchange market. Economic fundamentals have been playing a decisive role in influencing the trend of China's foreign exchange market. Since the beginning of this year, the Chinese economy has gradually emerged from the shadow of the pandemic and returned to normal. In the first half of this year, GDP increased by 5.5%. In the future, China will implement macro policies in a targeted and scientific manner, work hard to expand domestic demand, and promote unimpeded flow in the economy, so as to effectively upgrade the quality and appropriately expand the output of our economy. With the slowdown in global growth, the Chinese economy will play a greater role in supporting the foreign exchange market.

From the perspective of the foreign exchange market, the adjustment capacity and adaptability of China's foreign exchange market have significantly improved, effectively mitigating the risk of external shocks. The foreign exchange market has made substantial progress in recent years, making vast improvements and developments in transaction subjects, product transaction types, transaction models, and transaction scale. This progression aptly meets the diversified needs of the market. The flexibility of the RMB exchange rate has increased, and the market understanding of the two-way fluctuations of the RMB exchange rate, along with the concept of exchange rate risk neutrality, is improving. An increasing number of companies are able to better manage exchange rate risks. At the same time, in cross-border transactions, RMB payments now account for about 50%, reducing the risk of currency mismatch. All of these developments have further solidified the internal stability of China's foreign exchange market.

From an external standpoint, the Fed's tightening monetary policy is coming to an end, thereby weakening its spillover effect on the global economy. In recent years, the monetary policies of developed economies, led by the Fed, have been loosened and then tightened, which has induced substantial volatility in the international financial market and intensified adjustments within the international financial market. At present, inflation in the United States has declined from its previous peak, and the high interest rates may add to the rising risks of an economic recession. The market consensus is that the Fed's interest rate hikes are coming to an end, the momentum for the continued strengthening of the U.S. dollar has waned, and the external environment will marginally improve.

Over the years, the foreign exchange management department has successfully and steadily handled multiple rounds of external shocks. During this process, we have accumulated experience and continuously enriched and improved market regulation measures and methods. Therefore, we have the foundation, strength and confidence to maintain the stable operation of China's foreign exchange market. We will firmly guard against the risk of sharp fluctuations in the exchange rate and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

That's all. Thank you.

South China Morning Post:

As you pointed out, RMB assets are attractive to foreign capital, but the RMB exchange rate has significantly fluctuated recently. We note that macro-prudential adjustment parameters for cross-border financing were raised yesterday. Will China continue to take measures to stabilize confidence and prevent a sustained and excessive fall in the exchange rate? Thank you.

Wang Chunying:

In recent years, the People's Bank of China and SAFE have established and improved the macro-prudential management of cross-border financing. Yesterday, we raised the macro-prudential adjustment parameters. The market has offered various analyses and interpretations, many of which I believe are accurate. This time, our primary adjustment was raising the parameter from 1.25 to 1.5. This change has increased the upper limit of the risk-weighted balance of cross-border financing for domestic financial institutions and enterprises, directly expanding access for enterprises to obtain financing from overseas, including banks. As previously mentioned, corporate cross-border financing is based on net assets, while banks are based on core capital. After the coefficient's increase, the expansion of overseas financing capacity will increase the source of cross-border financing, expand capital inflows, and help boost domestic liquidity, especially foreign currency liquidity. This change will balance supply and demand in the foreign exchange market and play a role in stabilizing foreign exchange market expectations. This policy has been well-received by the market. I notice that many companies are very interested in it, and they are also happy to see the coefficient increase.

We've discussed many issues related to the exchange rate. Whether viewed from the perspective of cross-border capital flows, foreign exchange settlement and sales data, the balance of payments, or even the maturity of the foreign exchange market and our policies, the RMB exchange rate has the potential to remain basically stable at a reasonable and balanced level moving forward. In the past, we have managed multiple rounds of external shocks, accumulated experience and improved our regulatory tools and measures. Not long ago, the PBC stated at a press conference that tools are meant to be utilized. We will adhere to comprehensive policies, focus on stabilizing expectations, and adopt different measures according to actual conditions to provide the market with a stable environment and expectations. This approach will facilitate foreign-related economic entities conducting business and investment activities. Thank you.

Yicai:

The current U.S. dollar interest rate remains at a high level, and there is a certain interest rate gap between the interest rates of China and the U.S. Against this background, could you tell me about any changes in China's foreign debt in the first half of the year? Thank you.

Wang Chunying:

Impacted by the Fed's interest rate hike, last year's external debt data experienced a slight deleveraging. However, the overall trend has stabilized since the beginning of this year. At the end of the first quarter, the total external debt balance stood at $2.5 trillion, representing an increase of $38.2 billion or 1.6% over the figure at the end of the previous year. China's external debt is anticipated to remain relatively stable in the first half of the year.

Looking at the composition of foreign debt, there are active and passive types of foreign debt. Different types of foreign debt demonstrate various characteristics of change, but these changes are relatively stable and moderate.

Let me talk about active foreign debt first. In recent years, cross-border financing of domestic entities has remained rational, with increases and decreases in active foreign debt being more moderate. Broadly speaking, cross-border loans obtained by enterprises, trade financing such as usance letters of credit, direct investment financing between affiliated enterprises, and interbank lending are all active foreign debts in which domestic entities actively use overseas resources. When the Fed's monetary policy was lax in the initial stages, these active foreign debts did not significantly increase leverage, so the adjustment pressure was relatively minor when the policy was tightened later. The balance of active external debt decreased by 6% last year and remained essentially stable in the first half of this year. During the previous round of external debt deleveraging in 2015, the balance of active external debt fell by 29%. Specifically, among the active foreign debts this year, only cross-border loans obtained by enterprises have declined, while the balance of other active foreign debts has moderately rebounded or remained basically stable.

Examining passive external debt, since the beginning of this year, overseas entities have been more proactive in allocating RMB-denominated assets, and passive external debt has remained basically stable. Passive external debt refers to foreign investors investing in domestic bonds and non-residents depositing in domestic banks. Recently, foreign investors have increased their holdings of bonds for two consecutive months, and the situation is improving month by month. Furthermore, the balance of deposits of non-residents from overseas rebounded in the first half of the year, reversing the decline of last year. This overall stability of the passive external debt balance reflects the long-term investment value of RMB-denominated assets. 

Additionally, the structure of China's external debt has further improved, and the risk is generally manageable. In terms of the types of debt, in recent years, the growth of external debt has been driven by overseas investors investing in domestic bonds, most of which have had medium to long-term maturities. The share of external debt used for the purpose of financing, such as cross-border deposits and lending, fell to 53%. In terms of maturity, the proportion of medium and long-term external debt is rising, while short-term external debt is mainly being driven by cross-border financing and credit. These are the essential financial tools widely used by import and export companies to conduct international trade. The use of trade credit, whether it is received in advance or deferred, is a good indicator of the competitive edge of Chinese export companies' products, as well as import companies' choices for overseas suppliers. In terms of currency, the proportion of RMB-denominated external debt reached a historical high. At the end of 2022, the debt payment rate, debt rate, liability rate and the ratio of short-term external debt to foreign exchange reserves were all within the international safety zone. This means that China's foreign debt is safe. Also, China is a net creditor nation, and the synergy between external assets and liabilities is strong. 

Overall, the ratio of China's external debt to GDP has remained at 14% to 16% in recent years. Cross-border financing is generally in line with the development of the real economy, and China's external debt is expected to remain stable in the future. 

That is all from me in answer to your questions. Thank you.

Hong Kong Bauhinia Magazine:

Facing the fluctuations in the RMB exchange rate this year, what work has SAFE done to help companies manage their exchange rate risks? Do you have any suggestions? Thank you. 

Wang Chunying:

Thank you. SAFE sees serving companies in managing exchange rate risks as a long-term and fundamental task. We strive to carry out our work in the following aspects: 

First, SAFE has been working to promote the enterprises' exchange rate risk-neutral business philosophy through various channels and methods. Last year, we issued guidelines for enterprises to manage exchange rate risks, with the aim of helping enterprises establish effective exchange rate risk management mechanisms. Recently, SAFE has compiled a collection of past cases, which uses cases to popularize how to use derivative products to manage exchange rate risks in different scenarios. We have published last year's cases on our official website, and this year's cases will be published on the website once they are completed. In addition, we promoted the enterprises' exchange rate risk-neutral business philosophy through various channels such as the "china-forex" official WeChat account, and promoting the self-discipline mechanism. This has been one of our major works.

Second, SAFE has guided banks to establish a long-term mechanism for exchange rate risk management service. As banks provide services to customers directly, SAFE has guided banks to increase their promotion of RMB and foreign exchange derivatives, and encouraged banks to diversify their product types, to provide more convenient online channels for trading derivative products. Efforts have also been made to improve credit-granting activities and margin management related to derivative products, and enhance banks' ability to provide services at the grassroots level. In the first half of the year, SAFE conducted a special assessment of bank services for enterprises to manage exchange rate risks, aimed at encouraging and guiding banks to summarize and learn from past best practices and implement them in their business operations and service. In terms of serving customers to manage exchange rate risks, we hope that banks can adopt a more systematic approach and make institutional arrangements. This is the work we are doing with banks, which we will continue in the future. 

Third, the exchange rate hedging of micro, small, and medium-sized enterprises has always been one of our priorities. We have continuously improved the management of exchange rate risks and services for these companies. This work does require consistent effort. Since the beginning of this year, SAFE has continued to expand cooperation between government departments, banks, and enterprises and to improve the cost-sharing mechanism for hedging. We must first know if there are risks, then know how to use hedging tools, and finally have the ability to use them. In our survey, we found that micro, small, and medium-sized enterprises are more concerned about hedging costs, so we have done a lot to improve cost sharing. We have encouraged banks to reduce fees and concede interest, continued to guide the China Foreign Exchange Trade System to make these companies exempt from handling fees for hedging derivatives in the interbank foreign exchange market, and reduced their hedging costs through various means. At the same time, we have supported banks to use big data to facilitate the granting of credit for derivatives to these companies. 

You also asked about my suggestions just now. In general, no matter how the market changes, we all hope that enterprises can bear risk neutrality in mind, adopt a rational view towards exchange rate fluctuations, focus on their main business, and avoid engaging in speculation. These are basic principles that foreign-related companies should always follow. 

We have conducted a lot of research recently, and we are glad to see that the surveyed enterprises have developed a better understanding of risk neutrality and that they are capable of using derivative products and tools to manage exchange rate risks, strictly implementing hedging operations, and scientifically evaluating hedging effects. We hope to see more enterprises with such risk management capabilities and will adopt various measures together with banks and relevant government departments to help enterprises develop similar capabilities and conditions. Thank you.

Xie Yingjun:

Due to time constraints, there will be one last question.

Beijing Radio and Television Station:

Since the beginning of this year, the international financial market has continued to fluctuate, and the RMB exchange rate has generally weakened. How would you evaluate the situation of China's foreign exchange market in the first half of this year? Thank you.

Wang Chunying:

Since the beginning of this year, we have faced a complex and challenging external environment, yet China's foreign exchange market has demonstrated robust stability and resilience in terms of capital flow, market transactions, and market expectations. Here are some specific characteristics.

First, China's cross-border capital flow has remained relatively stable, and the supply and demand in the foreign exchange market have been basically balanced. In the first half of this year, foreign-related income and expenditure, as well as bank settlement and sales of foreign exchange, both registered a surplus. Notably, in the second quarter, the surplus figures were $12.5 billion and $17 billion, respectively. The main items of the balance of payments have significantly contributed to the surplus. Data shows that the surplus of trade in goods from January to May was basically unchanged from the same period last year, a high level in history. This continues to play a primary role in stabilizing cross-border capital inflow. At the same time, foreign capital flows have continued to exhibit favorable trends, turning from a net outflow in the second half of last year to a net inflow. In the first quarter, foreign capital net inflow logged $23.5 billion.

Second, transactions of foreign exchange market entities have been generally rational. In recent years, more and more market players have become adaptable to RMB exchange rate fluctuations, choosing appropriate times for foreign exchange settlements and purchases mainly according to international trade and investment practices. The numbers have borne it out. For example, in January and March this year, when the RMB appreciated, there was an increase in foreign exchange purchases, and the surplus of foreign exchange settlement and sales fell, even creating a deficit. However, the surplus in June was significantly higher than in previous months, as there were more foreign exchange settlements in June amid the depreciation of the yuan. The rational transactions of market entities have further stabilized the exchange rate.

Third, expectations for the RMB exchange rate have remained basically stable. To better understand expectations, we usually refer to the risk reversal index in the foreign exchange options market for the RMB. It reflects bearish and bullish outlooks for the RMB and transaction preferences in the market. A bearish outlook means expecting the depreciation of the RMB, so the increase of the index indicates higher expectations in the market that the RMB will depreciate, while a decline indicates higher sentiment expecting appreciation. Since the beginning of this year, the risk reversal index of the one-year options market has generally shown a downward trend and remained relatively low, indicating that the market has not developed a consistent and sustained expectation for the depreciation of the RMB. Recently, through surveys conducted among banks, companies, and other market players, we found they hold a rational and objective view that there is a basis for the RMB to remain stable over the long term.

On the whole, the foreign exchange market this year has remained stable and effectively adapted to the adjustments and changes in the external environment. It has demonstrated that China's foreign exchange market is maturing and more resilient. That's all I would like to say. Thank you.

Xie Yingjun:

Thanks for the introduction by Ms. Wang and the participation of our media friends. Today's briefing is now concluded. Goodbye!

Translated and edited by Wang Qian, Zhu Bochen, Liu Sitong, Liu Caiyi, Liu Qiang, Xu Kailin, Yan Bin, Huang Shan, Cui Can, Zhang Rui, Zhang Jiaqi, Li Huiru, David Ball, Jay Birbeck, and Tom Arnsten. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Ms. Guo Tingting, vice minister of commerce

Mr. Yang Tao, director general of the Comprehensive Department of the Ministry of Commerce (MOFCOM)

Mr. Xu Xingfeng, director general of the Department of Market Operation and Consumption Promotion of MOFCOM

Mr. Li Xingqian, director general of the Department of Foreign Trade of MOFCOM

Mr. Zhu Bing, director general of the Department of Foreign Investment Administration of MOFCOM

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 19, 2023

Shou Xiaoli:

Friends from the media, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Ms. Guo Tingting, vice minister of commerce, to brief you on China's commerce work and operations in the first half of 2023 and to take your questions. We also have with us Mr. Yang Tao, director general of the Comprehensive Department of the Ministry of Commerce (MOFCOM); Mr. Xu Xingfeng, director general of the Department of Market Operation and Consumption Promotion of MOFCOM; Mr. Li Xingqian, director general of the Department of Foreign Trade of MOFCOM; and Mr. Zhu Bing, director general of the Department of Foreign Investment Administration of MOFCOM. Now, I'll give the floor to Ms. Guo for a brief introduction.

Guo Tingting:

Thank you. Friends from the media, good afternoon. I want to begin by expressing my gratitude for your continued interest in and support for our commerce work. It is a pleasure to have you all here today at this press conference. Now, let me give you a brief overview of our business operations in the first half of this year.

Since the beginning of this year, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, MOFCOM has fully implemented the guiding principles of the 20th CPC National Congress, focused on promoting various tasks in the business field, and promoted the introduction of a series of policies and measures. In the first half of the year, business operations generally showed a trend of recovery, and high-quality business development made steady progress.

First, domestic consumption experienced a relatively swift recovery. We organized a series of initiatives under the 2023 "Year of Consumption Promotion" campaign, introducing policies and measures to stimulate household consumption and actively promote its expansion. As a result, the total retail sales of social consumer goods reached 22.8 trillion yuan, marking a year-on-year increase of 8.2%. Notably, contact-based consumption experienced a significant rebound, with catering income surging by 21.4%. Furthermore, sales of upgraded products flourished, including a 44.1% increase in the sales of new energy vehicles (NEVs), while sales of gold, silver and jewelry, and sports and entertainment products above designated size increased by 17.5% and 10.5%, respectively. Online shopping also surged, with online retail sales of physical goods growing by 10.8%, accounting for 26.6% of the total social retail sales.

Second, foreign trade maintained its growth momentum. Despite challenges such as weak international demand, we diligently implemented guidelines for stabilizing the scale and optimizing the structure of foreign trade. We have assisted enterprises in expanding markets and securing orders. In the first half of the year, imports and exports of goods totaled 20.1 trillion yuan, an increase of 2.1%, and exports increased by 3.7%, with a surplus of 2.8 trillion yuan, an increase of 17.4%. China's exports accounted for 14% of the international market in the first quarter, a rise of 0.3 percentage point from the previous year. Notably, our trade with emerging markets surpassed that with Europe and the United States, with a 5.4% increase in imports and exports to ASEAN, 7% increase to Latin America and 10.5% increase to Africa. Meanwhile, exports to the EU grew by 1.9%, while exports to the United States declined by 8.4%. Private enterprises displayed considerable resilience in their import and export activities, achieving an 8.9% increase, and their share rose by 3.3 percentage points to 52.7%. The "three new products" (electric vehicles, lithium batteries and solar cells) gained significant momentum, leading to a remarkable 61.6% increase in total exports, thus becoming a new driving force for trade growth. Additionally, there was a notable 6.3% increase in the export of mechanical and electrical products. Trade in services also experienced rapid growth, with imports and exports of services in the first five months reaching 2.6 trillion yuan, representing a 10.2% increase. Specifically, the import and export of travel services saw a remarkable surge of 67%.

Third, the absorption of foreign capital remained stable. Since the beginning of this year, we have dedicated ourselves to a series of "Year of Investment Promotion" activities to attract and utilize foreign capital more effectively. The number of newly established foreign-funded enterprises saw a rapid increase. In the first half of the year, 24,000 foreign-invested enterprises were established, marking a significant rise of 35.7%. The actual utilization of foreign capital decreased by 2.7%, reaching 703.65 billion yuan. Investment from developed countries continued to grow in China, with France, the United Kingdom, Japan and Germany witnessing increases of 173.3%, 135.3%, 53% and 14.2%, respectively. The quality of foreign investment also improved, particularly in high-tech industries, which experienced a 7.9% increase, accounting for 39.4% of the total foreign investment, rising by 3.9 percentage points. Foreign investment in high-tech manufacturing specifically rose by 28.8%. The role of leading opening-up areas in driving investment is evident, as the 21 pilot free trade zones attracted 129.66 billion yuan of foreign capital, representing an increase of 8.2%, and accounting for 18.4% of the country's total foreign investment.

Fourth, foreign investment and cooperation steadily progressed. We continued to enhance the quality and level of foreign investment and cooperation while further advancing the high-quality development of the joint construction of the Belt and Road Initiative (BRI). In the first half of the year, China's non-financial outbound direct investment totaled 431.61 billion yuan, registering an increase of 22.7%. We expanded cooperation in new areas like the green, digital and blue economies. During this period, we inked new memorandums of cooperation with four countries, including Brazil, and signed a total of 41 investment cooperation memorandums in related fields. We also saw improvements in the quality and efficiency of overseas contracted projects, achieving a 7% increase in turnover to 490.1 billion yuan, while the construction and operation of key projects steadily moved forward.

Fifth, bilateral and multilateral cooperation continues to deepen. We continue to expand the global network of high-standard free trade zones (FTZs) and the comprehensive implementation of the Regional Comprehensive Economic Partnership (RCEP). We held negotiations on version 3.0 of China-ASEAN Free Trade Area (FTA) and the ministerial meeting with signatories of the Digital Economy Partnership Agreement, and actively promoted our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In the first half of the year, China signed a free trade agreement (FTA) with Ecuador, completed substantive negotiations on the FTA upgrade with Singapore, and put into effect the early achievements of FTZ negotiation with Nicaragua. We firmly upheld the multilateral trading system and actively participated in WTO reform. China has played a key role in concluding negotiations on the text of the Investment Facilitation for Development agreement, and completed the domestic ratification process of the Agreement on Fisheries Subsidies. A total of 14 Chinese proposals were made in fields such as trade and the environment. We continue to deepen bilateral economic and trade cooperation. A series of events were held, including the Fifth Meeting of the Council of China-France Entrepreneurs, the Sino-German Entrepreneurs Roundtable, China-Central Asia Economic and Trade Ministers' Meeting, China-Africa Economic and Trade Expo, and the China-Central and Eastern European Countries (CEEC) Expo.

Next, MOFCOM will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and fully implement the decisions and plans made by the CPC Central Committee and the State Council. We will work to perform the important role of commerce development in three aspects. Efforts will be intensified to ensure stable performance in foreign trade and investment, as well as to promote consumption, providing strong support for sustaining China's economic recovery.

That concludes a brief overview of our work. Next, my colleagues and I are happy to answer your questions. Thank you.

Shou Xiaoli:

Thank you. Now the floor is open for questions. Please identify the news outlet you work for before asking your question.

CCTV:

It was recently proposed at a State Council executive meeting that when conditions allow, policy measures should be introduced promptly and implemented in a timely manner, while also expanding the toolkit of policy options to maximize their combined effects. What policies will be introduced to ensure steady economic growth in the future? Thank you.

Guo Tingting:

Thank you for your question. This is indeed a question that is of concern to all sectors of society, and represents the common expectations of the market.

Since the beginning of this year, MOFCOM has fully implemented the decisions and plans of the CPC Central Committee and the State Council. As I just mentioned, we have taken multiple measures to stabilize foreign trade and investment and promote consumption, to fully unleash the effect of multiple policies. Our work in the first half of the year has mainly been in the following aspects: first, many policy measures were introduced and implemented. Some of them aim to stabilize the scale and improve the structure of foreign trade; some encourage the establishment of foreign-funded R&D centers; some are pilot measures for aligning with international rules and promoting institutional opening-up in qualified FTZs and ports; and some are policy documents for bolstering the consumption of home furnishings and green and smart home appliances and improving and diversifying home services. Second, we have launched several campaigns, including events for boosting consumption and attracting investment that will run through the year. In the consumption boosting events, we collaborated with local governments and industry associations to improve consumption expectations and the consumption environment. And with the help of the investment promotion events, we promoted both inbound and outbound investment. Third, a series of significant expos were held, including the third China International Consumer Products Expo and the 133rd China Import and Export Fair.

A State Council executive meeting recently called for fully unleashing the effect of multiple policies. MOFCOM will continue to implement the policies that have been introduced and accelerate the rollout of policy measures that are ready to but not yet be introduced. Furthermore, we will carry out in-depth investigations and research, reinforce policy options, and fully implement a combination of policies to ensure commerce development, providing support for China's economic recovery. In terms of foreign trade, we will develop measures to help NEVs expand their international markets, upgrade processing trade, provide more convenience for business people to apply for visas, and resume and increase international flights. Efforts will also be made to organize significant expos, such as the China International Import Expo (CIIE), China Import and Export Fair, and China International Fair for Trade in Services (CIFTIS). In terms of foreign investment, we will introduce policies to further optimize the business environment for foreign investment and promote continuing to shorten the negative list for foreign investment. We will continue to hold roundtable discussions with overseas enterprises and maintain regular exchanges and communications with foreign-funded enterprises. In terms of consumption, we will continue carrying out campaigns that promote consumption, boosting consumption of imported products and consumption in summer holiday and autumn season. We will also roll out measures to increase the consumption of automobiles, promote sound development of the catering industry, and encourage the use of digital technology to improve life services, among others.

We will keep you updated on the progress of related work through various channels, including MOFCOM's press conferences. Your continued interest and support are greatly appreciated. Thank you.

Zhonghongnet:

The Central Economic Work Conference proposed giving priority to restoring and expanding consumption. What work has been carried out in the first half of the year to promote consumption, and what have been the results? Thank you.

Xu Xingfeng:

Thank you for your interest in the consumption work. Consumption is the ultimate demand and the enduring driving force for economic growth. Since the beginning of the year, MOFCOM has fully implemented the decisions and plans of the CPC Central Committee and the State Council about giving priority to restoring and expanding consumption. We have introduced policies, launched campaigns, improved consumption environment, and stabilized supply. The consumption market in the first half of the year showed a steady recovery. Ms. Guo just briefed us on the related work. Our work has mainly been in the following aspects:

First, we stabilized consumption in key areas, consolidating consumption fundamentals. As we said before, automobiles, home appliances, home furnishing and catering are four major fields of consumption. We introduced multiple policy measures to encourage consumer spending on big-ticket items. In terms of automobiles, measures were made to improve electric vehicle battery charging facilities and tap the rural market for NEVs. Recently, we rolled out two campaigns to boost automobile sales in various cities and spur NEVs consumption in counties and towns. We also launched a nationwide secondhand car information inquiry platform, aimed at creating a positive and reassuring experience for people when buying secondhand cars. In the first half of the year, the auto sales and the growth of NEV consumption were very pleasing. As Ms. Guo said earlier, used vehicle sales in China surged 15.6%, showing a steady recovery. In terms of home appliances, we stepped up efforts to support the consumption of green and smart home appliances. In the first half of the year, major e-commerce platforms saw a 67% and 12.7% increase in sales of replacement home appliances and green and smart home appliances sold in rural areas, respectively. In terms of home furnishing, we already provided information in this respect yesterday. In terms of the catering sector, a series of gourmet events were held to promote the recovery and development of the catering industry.

Second, we focused on creating a consumer-friendly environment through activities. As Ms. Guo mentioned, the consumption boosting events will run through the year with seasonal themes, monthly exhibitions and weekly attractions, with the aim to create many consumption booms. In the first half of the year, we held four themed events for boosting spring consumption, national consumption, green consumption and international consumption. We also held major expos, such as the China International Consumer Products Expo and the China International Silk Expo. A number of major events were held, including consumption promotion activities for cotton and textile products, time-honored brands and online-shopping. We are grateful to the media for their coverage of these events and for making them known to the public. Additionally, we encouraged local governments nationwide, including in Shanghai, Beijing, Tianjin, Hebei, Chongqing and Guangxi, to carry out various consumption promotion events with local characteristics.

Third, we have improved the environment to encourage consumption. As you all know, China is developing five international consumption centers in the cities of Shanghai, Beijing, Guangzhou, Tianjin and Chongqing. In this regard, we have stepped up efforts and held the second International Consumption Center City Forum to promote exchanges and mutual learning among cities. Meanwhile, we have also promoted renovating existing commercial pedestrian streets and upgrading business formats across the country. We have designated 12 national demonstration smart business areas to enhance urban commerce. A total of 2,057 "15-minute community life circles" have been built in 80 regions nationwide to address weak links in community businesses. We have promoted the development of county-level commercial systems and improved rural commercial outlets. According to the National Bureau of Statistics, retail sales of consumer goods in urban areas increased by 8.1% from January to June, while those in rural areas grew by 8.4%.

Fourth, we have ensured supplies meet basic public consumption needs, which has always been a focal point of our efforts. Focusing on daily necessities such as grain, oil, meat, eggs, milk, fruits and vegetables, we have maintained the market monitoring and warning system. We have strived to improve commodity circulation and ensure supply of daily necessities. In the first half of the year, 6,200 pieces of market monitoring information concerning daily necessities were released via a business forecast platform, attracting significant attention from certain enterprises and local governments. Moreover, we have also made active efforts to deal with the impact of natural disasters on the market, such as earthquakes in Luding county of Sichuan province and Shaya county of Xinjiang Uygur autonomous region, flooding in Henan province and Guangxi Zhuang autonomous region, and the recent rainstorm in Chongqing. We have ensured emergency supplies of daily necessities in disaster areas. Moreover, according to the trend of the pork market, we purchased and stored pork in time to guide pork prices back to reasonable. That's all. Thank you.

Phoenix TV:

In recent years, the scale of China's foreign investment has continued to rise, but the actual amount of foreign investment used in the first half of this year has decreased. What's your opinion about that? Thank you.

Zhu Bing:

Thank you for your attention to foreign investment data. In recent years, MOFCOM has implemented the policy decisions and plans of the CPC Central Committee and the State Council. We have worked with local governments and other departments to ensure stable performance in foreign investment. We have achieved continuous expansion of the scale of foreign investment in China, with the investment structure having been improved continuously. These efforts have positively contributed to promoting economic and social development and building a new development pattern. In 2022, despite a 12% decline in global transnational investment, foreign investment in China grew by 6.3%. China's actual use of foreign investment hit a record high, reaching 1.2 trillion yuan ($189.13 billion), representing an increase of 8% and ranking second globally. Since the beginning of this year, the world economy's recovery has slowed, and global transnational investment has been sluggish. The recent UNCTAD World Investment Report 2023 shows that global foreign direct investment continues to face downward pressure this year due to multiple factors. Given this impact, compounded by the high base in the same period of 2022, the actual use of foreign capital in China in the first half of this year showed a slight year-on-year decline of 2.7%, but the overall scale remained stable. 

We believe that the short-term fluctuation will not affect the continued optimism of foreign investors in China's growth, and the overall trend of expanding investment in China has not changed. Recently, we've observed a continuous stream of visits to China by senior executives from multinational companies. Their aim is to conduct comprehensive, in-depth assessments of China's business environment and to explore new opportunities for investment and cooperation. Multinationals widely agree that the Chinese market, which contains enormous development opportunities, is not an "option" but a "must." They will continue to increase investment in China and explore the Chinese market. As Ms. Guo just mentioned, in the first half of this year, the number of new foreign-invested enterprises in the country increased by 35.7% year on year, which also fully proves this point. 

We believe that with the concerted efforts of all parties, the effects of foreign investment policies and measures will gradually emerge. With an improved business environment, China will remain a favored foreign investment and business destination. Thank you!

Reuters: 

China's accession to the CPTPP requires the support of all current members, but some of them may face potential political constraints that prevent them from supporting the Chinese application. How does China plan to overcome current CPTPP members' concerns that their trade relationship with the U.S., the world's largest economy, could be at risk if China were to join the bloc? Thank you. 

Guo Tingting:

Thank you for your question. It is true that China has been proactively working toward its accession to the CPTPP. Let's have Mr. Yang Tao give the details.

Yang Tao: 

Thank you for your question. China applied to join the CPTPP in September 2021, and is now actively working to accelerate the accession process. We have conducted comprehensive and in-depth analysis, evaluation and research on all CPTPP provisions and identified possible measures and laws and regulations that need to be amended. Currently, China is communicating and negotiating with the members, following the procedures for joining the CPTPP. China has advocated building open, transparent, mutually beneficial and win-win regional free trade arrangements and promoted trade and investment liberalization and facilitation. Going forward, China is willing to maintain communication and exchanges with the members on China's accession to the CPTPP. Thank you!

MNI: 

In view of weak external demand, it is expected that China's export outlook faces difficulties in the second half of the year. How will MOFCOM support export enterprises in the second half?

Li Xingqian:

Thank you for your question. The decline in international market demand represents a significant factor influencing the development of foreign trade. If we look further back, global trade is returning to its pre-epidemic trends. The average annual growth rate of global trade during the three years of the epidemic was 9.7%, clearly higher than the average yearly growth rate of 2.4% from 2010 to 2019 before the epidemic. We believe that such high growth during the epidemic was temporary and unsustainable.

Looking forward to the second half of the year, foreign trade faces many uncertain, unstable and unpredictable factors. With economic and non-economic factors interacting, the situation is extremely difficult, which can be seen in two ways. On the one hand, global economic and trade growth is weak. The three driving forces of production, consumption, and investment are sluggish. The global manufacturing PMI has been below the 50-point mark for nine consecutive months. Inflation in major economies is still at a high level, and the recovery in commodity consumption has been relatively slow. On the other hand, non-economic interference is on the rise. Some countries have pushed for "decoupling," "chain disruption," and so-called "de-risking," putting up artificial obstacles to impede regular economic and trade exchanges. Enterprises say that some countries' politicization of trade issues has led to the forced transfer of orders and production capacity, harming the economic interests of both suppliers and buyers.

Despite facing these difficulties and challenges, we remain confident. China's foreign trade industry and supply chains are resilient. China's foreign trade enterprises, which have become strong competitors in the international market, have inherent innovation ability. Recently, we have followed up on key foreign trade industries and enterprises and noticed some positive changes. For example, cross-border transactions are becoming smoother, and the number of international flights is steadily recovering. The share of enterprises with flat or growing new contracts is picking up. For the electronic information industry, which is under pressure, the import of intermediate goods is on the rise, which means there may be a favorable turn in the year's second half. In addition, China's competitive products, such as electric vehicles, solar cells and lithium batteries, will continue to grow rapidly. Multilateral and bilateral trade cooperation, including the BRI and free trade agreements, are also unlocking the potential for trade growth.

In the second half of this year, MOFCOM will continue to adopt a problem-oriented approach and cooperate with localities and government departments to create synergy, fully promoting the stability and improvement of foreign trade. We will focus on three aspects. First, more efforts will be made to help enterprises keep orders stable and expand markets and ensure the success of a number of major expos, including the CIIE, the China Import and Export Fair, and the CIFTIS. We will support enterprises to participate in overseas exhibitions to market their products and services. Faster visa processing will be promoted, and efforts will be made to facilitate the resumption and addition of more flights to international routes. Second, we will safeguard the stability of industrial and supply chains. Efforts will be made to improve processing trade, dynamically adjust the catalog of maintenance products in comprehensive bonded zones, step up monitoring and early warning of trade risks, and help enterprises cope with unreasonable trade restriction measures. Meanwhile, we will be more proactive in expanding imports. Third, we will further innovate the development of foreign trade. We will support the continuous upgrading of the country's distinctive and competitive products, guide cross-border e-commerce brand cultivation and standard development, and promote the development and application of trade document digitalization. At the same time, training involving new models, green and low-carbon trade, and free trade agreements will be held in different sectors, helping enterprises enhance trade capacity. Thanks.

21st Century Business Herald:

This year marks the 10th anniversary of the establishment of China's pilot FTZs. My question is, in the first half of this year, what has MOFCOM done with regard to implementing the strategy of upgrading the pilot FTZs and tap into their roles as pilot platforms for comprehensive reform and opening up? Thanks. 

Guo Tingting:

Thank you for your question. As you said, this year marks the 10th anniversary of the establishment of China's pilot FTZs. We have some considerations regarding this landmark. Mr. Yang will explain the details. 

Yang Tao:

Thanks. The pilot FTZ construction is a major strategic measure adopted by the CPC Central Committee with Comrade Xi Jinping at its core to further reform and open up in the new era. As you said, this year marks the 10th anniversary of China's pilot FTZ construction. From the new start, MOFCOM has continued to thoroughly study and put into practice the important instructions on pilot FTZ construction given by General Secretary Xi Jinping and firmly implemented the pilot FTZ upgrading strategy in accordance with the key plans made at the 20th CPC National Congress. Our work has focused on three aspects:

First, we have prioritized connections with high-standard international economic and trade rules amid efforts to promote institutional opening-up. Recently, we submitted a circular to the State Council for release on deepening reforms in some eligible pilot FTZs and the Hainan Free Trade Port to align with high-standard international economic and trade rules amid efforts to boost institutional opening up. The circular focuses on pilot policies and measures and risk prevention and control approaches in six major fields, including trade in goods and services, the temporary entry of business personnel, digital trade, business environment, and risk control, and supports the five eligible FTZs in Shanghai, Guangdong, Tianjin, Fujian, and Beijing and the Hainan Free Trade Port to take the lead in the pilot work. This will help explore the path for comprehensively deepening reform and expanding opening up, providing practical support for joining high-standard economic and trade agreements.

Second, we have worked to expand the application of a new batch of institutional innovations to unleash greater reform dividends. We recently submitted to the State Council for release a circular on expanding the application of the seventh batch of reform experiences tested in China's pilot FTZs nationwide or in special regions, involving 24 reform measures in total. This is expected to further unleash the dividends of the reform and opening-up policies of pilot FTZs, and help improve the business environment and build a higher-level open economy. 

Third, we have adopted a to-do list to guide our efforts in the next three years, and advance differentiated exploration. The list nails down 164 major tasks relevant pilot FTZs plan to handle independently in the next three years amid efforts to strengthen categorized guidance and help pilot FTZs deepen reform and practical innovation in accordance with their local conditions. 

High-level institutional innovations have effectively stimulated the vitality of pilot FTZs. Statistics show that in the first half of this year, utilized foreign investment in 21 pilot FTZs reached 129.66 billion yuan, a year-on-year increase of 8.2%. The growth of utilized foreign investment by high-tech industries reached 21.2% year on year. Overall, pilot FTZs cover less than 0.4% of national land and attracted 18.4% of total foreign investment in the country. 

Moving forward, MOFCOM will continue to fully implement the guiding principles of the 20th CPC National Congress and focus on three improvements, which are: improving the alignment with high-standard international economic and trade rules, market access, and systemic integration of reform. Efforts will be made to fully implement the strategy to upgrade pilot FTZs and other relevant policies and measures, and tap into their roles as pilot platforms for comprehensive reform and opening up, making continuous contributions to the high-level opening up. Thanks.  

CNBC:

I have two questions. First, in the first half of this year, how many executives from foreign companies have visited China, especially those from the US and Europe? Second, what kind of achievements has the "Invest in China Year" series of investment promotion activities made in the first half of the year, and how does MOFCOM plan and expect to attract foreign investment in the second half of this year?  

Zhu Bing:

Thank you for your questions. Since the beginning of this year, many executives of transnational corporations have come to China to evaluate the investment environment and search for new opportunities, which speaks volumes about their strong willingness to invest in China and optimism about China's prospects. MOFCOM warmly welcomes investors of various countries. Chinese Commerce Minister Wang Wentao met with visiting executives of transnational corporations more than 20 times this year, detailing our new policies and measures for attracting and utilizing foreign investment, and holding deep conversations about consolidating existing cooperation and further exploring potential cooperation. Recently, on the basis of our regular communication mechanisms, MOFCOM established a roundtable meeting mechanism with foreign companies to expand the communication channels between the Chinese government and foreign companies, which has helped to enhance communication, respond to enterprises' concerns in a timely manner, coordinate efforts to resolve the difficulties and problems foreign businesses face in their operations, and offer more effective and relevant services.   

According to the preliminary information, more executives of transnational corporations plan to visit China in the second half of this year. We will try our best to facilitate their evaluation of the investment environment, their efforts to align development strategies, and their negotiation of cooperation projects. China will become more and more open. Transnational corporations are welcome to continue their investment in China and share China's huge market and the dividends of open development.  

The second question was about the "Invest in China Year" series of investment promotion activities. I will brief it now. Implementing the decision and plan made by the CPC Central Committee and the State Council on making greater efforts to attract and utilize foreign investment, MOFCOM hosted for the first time the "Invest in China Year" series of investment promotion activities with the theme of "Invest in China, Working Together for a Bright Future of Openness and Prosperity." These events cover the country's east, central, west, and northeast regions and comprehensively display the business environment and investment opportunities in different localities, confirming the reliability of investing in China. So far, a total of 14 events of three categories have been held. 

The first category is comprehensive events. This March, we hosted the launch ceremony of "Invest in China Year" in Guangzhou, which Chinese Vice Premier He Lifeng attended and addressed with a keynote speech. In the presence of almost 100 transnational corporations, he reiterated China's determination to enhance opening-up, helping to strongly boost the confidence of foreign investors in China. 

The second category is "bringing in" activities. We held special local promotions in Guangdong, Chongqing, Tianjin and other places, and a national-level economic and technological development zone promotion event in Jiangsu province. We organized and carried out a series of activities, such as the "Multinational Corporations in Heilongjiang and Inner Mongolia" and "CIIE Enters Jilin and Yunnan." In line with the actual development and industrial characteristics of various regions, we actively promoted opening-up policies, investment environment and projects, and vigorously supported investment attraction around the country, especially in the central, western and northeast regions.

The third category is "going global" activities. We visited the Gulf countries to carry out special promotions, which attracted the participation of more than 70 local companies, and promoted the positive progress of many investment projects in China. We held the launch ceremony for the "Year of Investment Promotion — Germany Station" activity in Germany, in which more than 100 German companies and business associations participated, and many companies put forward investment plans. During the Year of Investment Promotion series of activities in the first half of the year, various regions continued to increase their efforts to attract investment. According to incomplete statistics, more than 2,900 foreign investment projects are currently being discussed in various regions.

Next, we will focus on promoting the implementation of policies and measures in various foreign investment fields, and continue holding the Year of Investment Promotion series of activities. We aim to better guarantee foreign investment services, strive to create a market-oriented, law-based and internationalized first-class business environment, help foreign-funded enterprises deepen their presence in the Chinese market, and share the dividends of China's development. Thank you.

The Paper:

Affected by factors such as shrinking external demand, China's foreign trade imports and exports were under pressure in the first half of the year. How does MOFCOM evaluate the situation of foreign trade imports and exports in the first half of the year? In addition, we've noticed a significant decline in the growth rate of imports and exports in May and June. What is the reason behind this? Thank you.

Li Xingqian:

Thank you for raising these two important questions. Your first question is about the import and export performance in the first half of the year. Since the beginning of this year, the external challenges facing foreign trade have indeed increased significantly. The State Council has issued policy measures in a timely manner to fully support foreign trade enterprises in exploring markets. Overall, in the face of a severe and complex external environment, foreign trade in the first half of the year withstood the pressure and demonstrated strong resilience. There have been outstanding performances in three areas:

First, the overall scale of trade has remained stable, and the volume of trade has continued to grow. From January to June, China's imports and exports of goods exceeded 20 trillion yuan, with a year-on-year increase of 2.1%. When compared with the same period before COVID-19, that is, the first half of 2019, it increased by 36.7%. We continue to maintain our position as the world's largest trading nation in goods, and our market share is steadily increasing. According to the latest data from the World Trade Organization (WTO), in the first quarter, global exports fell by 1.6% year on year, while China's export market share in the international market was 14%, an increase of 0.3 percentage point compared with the first quarter last year. Our monitoring also shows that in the second quarter, China's export share in the international market still maintained a steady and rising trend. Against the backdrop of overall sluggish global demand, our neighboring countries and regions have generally experienced double-digit declines in exports. China's export market is diverse, and its products are rich, effectively offsetting the impact of weak external demand and the cyclical decline of some products. The current performance of China's foreign trade is in line with expectations.

Second, the quality of trade has been continuously improved. From January to June this year, the share of emerging markets in imports and exports increased by 1.8 percentage points compared with the same period last year, reaching 63.5%. Our imports and exports to FTA partners increased by 2.4%, and to countries along the Belt and Road grew by 9.8%, both higher than the overall export growth rate. The quality of exported products is improving, and high-quality, high-tech and high-value-added products are growing strongly. In the first half of the year, electric passenger vehicles, solar cells and lithium batteries together boosted the overall export growth rate by 1.8 percentage points. The model of foreign trade is also being innovated and developed. We have replicated and promoted 30 excellent practice cases of new foreign trade models nationwide. In the first half of the year, cross-border e-commerce exports increased by 19.9%, maintaining a fast development momentum.

Third, foreign trade has effectively served the overall economic development. Foreign trade has continued to drive the recovery of the national economy, directly and indirectly employing 190 million people. Last year, we canceled the registration requirement for foreign trade operators, further stimulating the enthusiasm of market entities. From January to June, there were 35,000 new foreign trade enterprises with import and export records compared to the same period last year. In terms of ensuring supply in the domestic market, we actively expanded imports of grain, energy and resource products, and high-quality consumer goods to meet domestic production and living needs. In terms of opening-up, we promoted the comprehensive implementation of the RCEP among the 15 signatory countries, so that the internal and external circulations flow more smoothly.

Your second question is about the decline in the growth rate of China's imports and exports in May and June. This is actually a direct reflection of the weak recovery of the world economy in the field of trade. Specifically, there are four main reasons for the decline. First, overall external demand remains weak. Major developed countries are still adopting austerity policies to cope with high inflation, and some emerging markets have significant fluctuations in their exchange rates and insufficient foreign exchange reserves, which has significantly suppressed import demand. Second, the electronics and information industry is in a cyclical downturn. Consumer electronics products are one of China's leading export products, but this field has an "Olympic cycle" and is currently in a low for the four-year period. Affected by this, the export growth rate of computers, integrated circuits and cellphones, which account for more than 30% of our country's exports, has declined by double digits. Third, the import and export base in the same period last year was significantly raised. From May to June last year, the average monthly import and export volume was 3.57 trillion yuan, which was 430 billion yuan higher than the average monthly volume of 3.14 trillion yuan in the preceding four months. Fourth, import and export prices are declining. Currently, international commodity prices have been weakening. In May, China's import prices fell by 4.5%, and in June, they fell by a further 8.5%. The export prices also turned negative year on year from May, indicating a shift from positive to negative.

However, we should also note that foreign trade is accumulating new vitality despite declining import and export growth in May and June compared to the same period last year. The month-on-month growth rate has remained positive. The foreign trade cargo and container throughput at China's ports monitored by the transportation department is also growing, and the actual flow of goods in and out is still rather active. Therefore, we remain optimistic about the prospects of foreign trade in the second half of the year. Thank you.

Economic Daily:

What were the new achievements and highlights of Belt and Road economic and trade cooperation during the first half of 2023? What efforts will be taken to promote high-quality Belt and Road cooperation? Thank you.

Guo Tingting:

Thank you for your questions. I'd like to address them. Since the start of this year, MOFCOM has fully implemented the important instructions of General Secretary Xi Jinping on jointly promoting Belt and Road Initiative and the decisions and arrangements of the 20th National Congress of the CPC. We've worked with all related parties to steadily advance Belt and Road economic and trade cooperation. New achievements have been made on various fronts. 

First, the foundation of trade and investment has been continuously strengthened. We secured a steady growth of trade volume and an increasingly optimized trade structure. Over the past six months, our goods trade with Belt and Road countries reached 6.89 trillion yuan, marking a 9.8% year-on-year increase. This is 7.7 percentage points higher than the nation's overall growth in goods trade during the same period. Our exports of NEVs, machine tools, and household appliances to Belt and Road countries rose by 163.3%, 49.7% and 26.2%, respectively. Meanwhile, our imports of quality specialty products, including agricultural products from Belt and Road countries, grew by 17.9%, and fertilizers by 71.7%. We also noted the rapid growth in bilateral investment. In the first half of the year, our non-financial direct investment in Belt and Road countries reached 80.1 billion yuan, an increase of 23.3%, and we received 55.95 billion yuan of actualized investment from Belt and Road countries, a 23.7% increase.

Second, we have strengthened connectivity. On the one hand, we have advanced the "hard connectivity" of infrastructure. In the past six months, the turnover of Chinese enterprises' contracted projects in Belt and Road countries totaled 277.72 billion yuan, an increase of 11.5%. Key projects like the Cambodia Sihanoukville Special Economic Zone and the China-Laos Railway commenced operation smoothly. We made new progress in constructing the New International Land-Sea Trade Corridor, a joint endeavor between China and Singapore. Based on industrial park cooperation agreements, China and some ASEAN countries took steps to jointly develop demonstration zones for innovative economic and trade development. On the other hand, we facilitated the "soft connectivity" of economic and trade rules and standards. RCEP took effect in 15 member countries, and the version 3.0 China-ASEAN FTA negotiations were held. We also signed a free trade agreement with Ecuador. Most importantly, we deepened the "connectivity of the heart." Several "small but beautiful" programs aimed at enhancing education, healthcare and poverty alleviation were carried out in Belt and Road countries, greatly improving local people's livelihoods. We also advanced nine programs of China-Africa cooperation.

Third, the building of mechanisms and platforms has been improved. We established working groups to facilitate trade with two countries and promote investment with five countries. In terms of cooperation in emerging sectors, we signed eight memorandums of cooperation with six countries on green development, the digital economy, the blue economy, e-commerce, and trade in services. To fully utilize cooperation platforms, we successfully hosted the third CEEC Expo & International Consumer Goods Fair and the third China-Africa Economic and Trade Expo.

Following the guidance of the CPC Central Committee and the arrangements of the State Council, MOFCOM will continue to enhance economic and trade cooperation with Belt and Road countries and expand cooperation spaces to make new contributions to high-quality Belt and Road cooperation with more win-win results. Thank you.

Macau Monthly:

The United Nations Conference on Trade and Development (UNCTAD) offered an analysis of global multinational investment in its recent report. What is your take on the trend of China's attractiveness to foreign investment in the second half of 2023? What measures will be taken to attract and make use of foreign investment? Thank you.

Zhu Bing:

Thank you for your questions. As you noted, the UNCTAD report indicates that global multinational investment declined by 12% last year, with further downward pressure being projected for this year. The external environment for attracting investment is severe as global investment is experiencing a downturn, and competition for investment introduction is becoming increasingly intense. Nevertheless, it's important to remember that the fundamentals of the Chinese economy, characterized by its strong resilience, enormous potential, and long-term growth, remain unchanged. China's vast open market presents numerous opportunities for foreign enterprises. Our overall advantages in attracting investment, created by a complete industrial system, impeccable infrastructure, abundant human resources, and a continuously improving business environment, are constantly being reinforced. Under the strong leadership of the CPC Central Committee and the State Council, we are both determined and confident in our ability to successfully attract and utilize foreign investment this year. We will coordinate with all localities and government departments, prioritizing the following four aspects of work.

First, we will push for a higher standard of opening up. The negative list for foreign investment access will be appropriately shortened, and restrictions will be either eased or removed entirely. To advance the comprehensive pilot program for service sector opening, we will implement a number of trial measures, drawing on the rules, regulations, standards, and management models stipulated in high-standard economic and trade agreements, thereby steadily advancing the institutional opening of the sector. We will also revise the Measures for Strategic Investment by Foreign Investors in Listed Companies to further relax restrictions in this area.

Second, we will strengthen policy support for foreign investment. MOFCOM has directed localities to conscientiously implement special policies for foreign-invested research and development centers, foreign investment in manufacturing, and the catalog of encouraged foreign investment industries. More foreign investment has been directed toward advanced manufacturing, with its introduction to high-tech manufacturing increasing by 28.8% in the first half of 2023. While diligently implementing existing policies, we will redouble efforts to address foreign enterprises' common calls for fair competition, trade facilitation, and supply of production factors. New policies and measures will be adopted to enhance the business environment and attract foreign investment. We will collaborate closely with all localities and government departments to ensure effective policy implementation and bolster foreign enterprises' sense of gain. 

Third, we will continue to host the Year of Investment Promotion series of activities. As I just said, in the first half of the year, we organized 14 major events, effectively promoting our investment environment and policies, encouraging multinational companies to better understand and invest in China. In the second half of this year, we plan to host nine key events in conjunction with major economic and trade exhibitions. This includes a Year of Investment Promotion keynote forum during the China International Fair for Investment and Trade (CIFIT), a specialized session for the service industry at the CIFTIS, a dedicated promotion for China's central region during the Expo Central China, and a Year of Investment Promotion summit during the CIIE. We hope these events can bolster local governments in attracting investments, fostering project collaborations, and bringing in more promising foreign investment projects for China.

Fourth, we will elevate the level of service support for foreign investment. This year, we have fully utilized the foreign trade and investment coordination and service mechanism, and the specialized team for key foreign investment projects, strengthened regular exchanges with foreign-funded enterprises and foreign business associations, and upgraded and established a roundtable conference system for foreign-funded enterprises to carry out multiple forms of exchange activities at various levels. Recently, Minister Wang Wentao has presided over roundtable meetings with foreign-funded enterprises in the pharmaceutical industry and Japanese enterprises, listening to their feedback and addressing their concerns. Next, we will continue to leverage the roundtable system and develop it into an vital platform for the Chinese government to connect with, serve and support foreign-invested enterprises. Should any enterprise encounter difficulties or problems related to their investment or operations, they can directly contact the designated team for foreign investment under MOFCOM.

Thank you.

Yicai:

According to recent data, in the first half of the year, China's consumer market achieved a stable and rapid recovery. However, the rebound in big-ticket items such as home furnishings and appliances remains insufficient. What measures will be taken in the next step? Thank you.

Xu Xingfeng:

Thank you for your question. The topic is a common concern for many people. In the first half of this year, total retail sales of consumer goods increased by 8.2% year-on-year. Everyone has high expectations regarding how to sustain the positive momentum in consumption and stabilize the demand for big-ticket item such as household appliances, home furnishings, and automobiles. The meeting of the Political Bureau of the CPC Central Committee emphasized that restoring and expanding demand is key to maintaining and motivating the current economic recovery. Next, MOFCOM will diligently implement the deployments and decisions made by the CPC Central Committee and the State Council, continue to integrate the strategy of expanding domestic demand with deepening supply-side structural reform, and enhance policy coordination and working collaboration, deepening the level of implementation. We will focus on the following four aspects:

First, we will focus on optimizing the consumption environment and implementing more detailed policies. As I introduced earlier, the State Council and related departments have issued a series of policies around promoting consumption, so the next step is to "cultivate and flourish." This means that these policies that have been issued can actually be transformed into results. As you mentioned just now, the household consumption policy covers a wide range, including home appliances, furniture, home decorations, home textiles and housekeeping. Yesterday, we held a policy briefing here to introduce the relevant implementation considerations.

In addition, as discussed and reviewed by the executive meeting of the State Council last year, MOFCOM and 17 other departments have issued policies and documents on boosting the circulation of automobiles and expanding automobile consumption, many of which are currently in progress. Responding to the issue of "mileage anxiety" concerning NEVs, MOFCOM, based on its own responsibilities, is working with other departments to actively improve the charging infrastructure. For example, on the premise of ensuring safety, we are encouraging the installation of charging facilities in gas stations and parking lots of shopping malls, supermarkets, shopping centers and so on where conditions allow. These policies form a cohesive approach to stabilize and expand automobile consumption. In addition, we will carry out in-depth investigations and studies, enlarge policy reserves and enrich our policy toolkit in light of changes to the current consumer market, and promote the introduction of policies at the appropriate times.

Second, we will focus on cultivating a vibrant consumption atmosphere by continuously organizing engaging consumer events. The Year of Consumption Promotion which we just introduced has now entered its second half when policies should be implemented with further precision and various activities should be conducted well and effectively. Nationwide, the "Home Refresh Consumption Season" will serve as a major promotion to harness people's enthusiasm toward all kinds of household furnishings. On July 12, we launched the "Summer Consumption Season" in Chongqing, which is now in full swing. In September, we plan to launch the "Golden Autumn Shopping Festival." Subsequently, there will be the CIFTIS and the CIIE, which everyone is aware of, following one after another. At the local level, we will continue to mobilize the enthusiasm of local governments to initiate tailored and captivating consumption promotion activities in accordance with local conditions, to build a unique "one place, one product" brand and enhance the effectiveness and influence of activities.

Third, we will focus on improving consumption conditions and refining the business system. The business system affects the convenience of consumption, and we will start with both urban and rural areas. In cities, we will cultivate and construct international consumption hubs, revitalizing and elevating pedestrian streets, developing smart shops and business circles, expanding the coverage of "15-minute community life circles," and promoting the development of distinctive neighborhoods. In rural areas, we will implement a three-year plan for county-level commerce, cultivating a batch of leading commercial counties at national level, upgrading and renovating a number of township business centers and establishing new rural convenience stores.

Fourth, we will prioritize innovative consumption scenarios and cultivate consumption hot spots. At present, various new forms and models of the consumer market are flourishing. It is vital to guide innovative development, as laid out in the "three integrations." The first integration involves merging business models. The boundaries between specialty stores, professional stores, shopping malls and supermarkets have become less clear now, and shopping centers now offer diverse elements and functionalities. The second integration revolves around cross-border collaboration. By synergizing business, travel, culture, sports and health, we aim to create more immersive, experiential and interactive consumption scenarios. The third integration focuses on merging online and offline aspects of commerce. We will support the healthy development of "instant retail" and livestream e-commerce to extend and expand into the offline world. This approach aligns with current trends and aims to promote the provision of digital and intelligent services among traditional businesses.

That's all from me. Thank you.

Shou Xiaoli:

Thank you, Mr. Xu for your answers, and thank you to everyone from the press for attending. That's all for today's press conference, goodbye.

Translated and edited by Wang Qian, Wang Yiming, Liu Sitong, Cui Can, Duan Yaying, Yuan Fang, Wang Yanfang, Liu Qiang, Liu Caiyi, Ma Yujia, Li Huiru, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speaker:

Mr. Fu Linghui, spokesman of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 17, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to today's press conference held by the State Council Information Office (SCIO). This is a regular briefing on economic data. We are delighted to be joined by Mr. Fu Linghui, spokesman of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS, to brief you on the national economic performance of the first half of 2023, and to take your questions.

Now, I'll give the floor to Mr. Fu for an introduction.

Fu Linghui:

Thank you, Ms. Shou. I'm very glad to attend today's press conference. I'll first brief you on the main economic data of the first half of this year and then take your questions.

In the first half of this year, the Chinese economy has shown encouraging recovery momentum. In the first half of this year, faced with a complex and grave international environment as well as arduous tasks to advance reform and development, and ensure stability at home, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, adhered to the general working guideline of making progress while maintaining stability, fully and faithfully applied the new development philosophy on all fronts, accelerated the efforts to foster a new development pattern, focused on promoting high-quality development, better balanced domestic and international imperatives, coordinated the work of COVID-19 prevention and control with economic and social development, ensured both development and security, and gave priority to ensuring stable growth, employment and prices. As a result, market demand gradually recovered, production supply continued to increase, employment and prices were generally stable, and residents' income grew steadily. The national economy showed a good momentum of recovery.

According to preliminary estimates, the gross domestic product (GDP) in the first half of the year reached 59,303.4 billion yuan, up by 5.5% year on year at constant price, 1.0 percentage point faster than that in the first quarter of 2023. By industry, the value added of the primary industry was 3,041.6 billion yuan, up by 3.7% year on year; that of the secondary industry was 23,068.2 billion yuan, up by 4.3%; and that of the tertiary industry was 33,193.7 billion yuan, up by 6.4%. By quarter, GDP grew by 4.5% year on year in the first quarter and 6.3% in the second quarter. GDP in the second quarter was up by 0.8% quarter on quarter. 

1. Agricultural production was stable and animal husbandry grew steadily.

In the first half of 2023, the value added of agriculture (crop farming) witnessed a year-on-year increase of 3.3%. The summer grain had another harvest. The total output of summer grain was 146.13 million metric tons, 1.274 million metric tons less than that of the previous year, or down by 0.9%, but still the second highest amount in history. In the first half of the year, the output of pork, beef, mutton and poultry was 46.82 million metric tons, up by 3.6% year on year. Of this total, the outputs of pork, beef, mutton and poultry increased by 3.2%, 4.5%, 5.1% and 4.3%, respectively. The output of milk was up by 7.5% and that of eggs grew by 2.9%. At the end of the second quarter, the number of pigs registered in stock was 435.17 million, up by 1.1% year on year; and in the first half of the year, 375.48 million pigs were slaughtered, up by 2.6%.

2. Industrial production recovered gradually and equipment manufacturing grew quickly.

The total value added of industrial enterprises above designated size grew by 3.8% year on year in the first half year, or 0.8 percentage point faster than that in the first quarter. In terms of sectors, the value added of mining increased by 1.7% year on year, that of manufacturing increased by 4.2%, and that of the production and supply of electricity, thermal power, gas and water increased by 4.1%. The value added of equipment manufacturing increased by 6.5%, 2.7 percentage points faster than that of the industrial enterprises above designated size. Analysis by types of ownership showed that the value added of state holding enterprises rose by 4.4% year on year; that of share-holding enterprises was up by 4.4%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 0.8%; and that of private enterprises was up by 1.9%. In terms of products, the production of solar cells, new-energy automobiles and industrial control computers and systems increased by 54.5%, 35.0% and 34.1%, respectively. In June, the value added of industrial enterprises above designated size grew by 4.4% year on year, or up by 0.68% month on month. In June, the Manufacturing Purchasing Managers' Index stood at 49.0%, and the Production and Operation Expectation Index was 53.4%.

3. The service sector grew quickly and services involving contacts and gatherings improved significantly.

In the first half of the year, the value added of services went up by 6.4% year on year, 1.0 percentage point faster than that in the first quarter. Specifically, the value added of accommodation and catering, information transmission, software and information technology services, leasing and business services, financial intermediation, and wholesale and retail grew by 15.5%, 12.9%, 10.1%, 7.3% and 6.6%, respectively. In June, the Index of Services Production increased by 6.8% year on year. Specifically, the Index of Services Production of accommodation and catering, information transmission, software and information technology services, and leasing and business services went up by 20.0%, 15.4% and 9.3%, respectively. In the first five months, the business revenue of service enterprises above designated size grew by 8.5% year on year. In June, the Business Activity Index for Services stood at 52.8%, and the Business Activity Expectation Index was 60.3%. Among these, the Business Activity Index for industries like air transportation, express mail services, telecommunication, broadcast, television and satellite transmission services, monetary and financial services, and insurance were within the high expansion range of 60.0% and above.

4. Market sales registered good momentum of growth and sales of upgraded goods accelerated.

In the first half of the year, the total retail sales of consumer goods reached 22,758.8 billion yuan, up by 8.2% year on year, 2.4 percentage points faster than that of the first quarter. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 19,753.2 billion yuan, up by 8.1% year on year, and that in rural areas was 3,005.6 billion yuan, up by 8.4%. Grouped by consumption patterns, the retail sales of goods were 20,325.9 billion yuan, up by 6.8%; and the income of catering was 2,432.9 billion yuan, up by 21.4%. Goods for basic living enjoyed stable growth, with the retail sales of clothes, shoes, hats and textiles and of grain, oil and food by enterprises above designated size up by 12.8% and 4.8%, respectively. The sales of upgraded goods grew quickly. The retail sales of gold, silver and jewelry, of sports and recreation goods, and of cosmetics by enterprises above designated size went up by 17.5%, 10.5%, and 8.6%, respectively. Online retail sales reached 7,162.1 billion yuan, up by 13.1% year on year. Specifically, the online retail sales of physical goods were 6,062.3 billion yuan, up by 10.8%, accounting for 26.6% of the total retail sales of consumer goods. In June, the total retail sales of consumer goods increased by 3.1% year on year, or up by 0.23% month on month.

5. Investment in fixed assets continued to increase and investment in high-tech industries grew quickly.

In the first half of the year, the investment in fixed assets (excluding rural households) reached 24,311.3 billion yuan, up by 3.8% year on year. Specifically, the investment in infrastructure grew by 7.2%; that in manufacturing grew by 6.0%; and that in real estate development fell by 7.9%. The floor space of commercial buildings sold reached 595.15 million square meters, down by 5.3%; and the total sales of commercial buildings were 6,309.2 billion yuan, up by 1.1%. By industry, investment in the primary industry went up by 0.1%, that in the secondary industry was up by 8.9%, and that in the tertiary industry was up by 1.6%. Private investment dropped by 0.2%. Investment in high-tech industries grew by 12.5%, of which investment in high-tech manufacturing and high-tech services grew by 11.8% and 13.9%, respectively. In terms of high-tech manufacturing, investment in manufacturing of medical equipment, measuring instruments and meters and manufacturing of electronic and communication equipment grew by 16.8% and 14.2%, respectively. In terms of high-tech services, investment in professional technical services and in services for transformation of scientific and technological achievements grew by 51.6% and 46.3%, respectively. In June, investment in fixed assets (excluding rural households) grew by 0.39% month on month.

6. Imports and exports of goods continued to grow and the trade structure continued to be optimized.

In the first half of the year, the total value of imports and exports of goods was 20,101.6 billion yuan, an increase of 2.1% year on year. The total value of exports was 11,458.8 billion yuan, up by 3.7%. The total value of imports was 8,642.9 billion yuan, down by 0.1%. The trade balance was 2,815.9 billion yuan in surplus. The imports and exports of general trade increased by 4.0%, accounting for 65.5% of the total value of imports and exports, 1.2 percentage points higher than that of the same period in the previous year. The imports and exports by private enterprises grew by 8.9%, accounting for 52.7% of the total value of imports and exports, 3.3 percentage points higher than that of the same period in the previous year. The imports and exports with countries along the Belt and Road grew by 9.8%. In June, the total value of imports and exports was 3,488.3 billion yuan, down by 6.0% year on year. The total value of exports was 1,989.8 billion yuan, down by 8.3%; and that of imports was 1,498.5 billion yuan, down by 2.6%. 

7. Consumer price rose year on year and producer prices for industrial products dropped year on year.

In the first half of the year, the consumer price index (CPI) rose by 0.7% year on year. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 2.1%. Clothing prices increased by 0.8%. Housing prices dropped by 0.2%. Prices for articles and services for daily use rose by 0.5%. Transportation and communication prices fell by 2.3%. Prices for education, culture and recreation grew by 1.7%. Prices for medical services and health care went up by 1.0%. Prices for other articles and services increased by 2.9%. In terms of food, tobacco and alcohol prices, fresh fruit prices went up by 7.9%, pork prices increased by 3.2%, grain prices rose by 1.6%, and fresh vegetable prices dropped by 2.7%. The core CPI excluding food and energy prices grew by 0.7% year on year. In June, the country's CPI maintained the same level year on year and dropped by 0.2% month on month.

In the first half of the year, the producer prices for industrial products went down by 3.1% year on year. Specifically, the prices in June dropped by 5.4% year on year, or down by 0.8% month on month. In the first half of the year, the purchasing prices for industrial producers went down by 3.0% year on year. Specifically in June, the prices dropped by 6.5% year on year, or down by 1.1% month on month.

8. Employment was generally stable and the surveyed unemployment rate in urban areas declined.

In the first half of the year, the urban surveyed unemployment rate averaged 5.3%, down by 0.2 percentage point over that of the first quarter. In June, the surveyed unemployment rate in urban areas was 5.2%, the same as that of the previous month. The surveyed unemployment rate of population with local household registration was 5.1% and that of population with non-local household registration was 5.3%, of which, the rate of population with non-local agricultural household registration stood at 4.9%. Specifically, the surveyed unemployment rates of population aged 16-24 and 25-59 were 21.3% and 4.1%, respectively. Among the population aged 25-59, the surveyed unemployment rates of the population with junior secondary school education or below, with senior secondary school education, with junior college education, and with university education or above were 4.4%, 4.4%, 3.9% and 3.2%, respectively. The urban surveyed unemployment rate in 31 major cities was 5.5%, the same as the previous month. The employees of enterprises worked 48.7 hours per week on average. By the end of the second quarter, the number of rural migrant workers totaled 187.05 million, up by 3.2% year on year.

9. Residents' incomes increased steadily and the incomes of rural residents grew faster than that of urban residents.

In the first half of the year, the nationwide per capita disposable income of residents was 19,672 yuan, a nominal growth of 6.5% year on year, 1.4 percentage points faster than that of the first quarter; the real growth was 5.8% after deducting price factors, 2.0 percentage points faster. In terms of permanent residence, the per capita disposable income of urban households was 26,357 yuan, a nominal growth of 5.4% year on year and a real growth of 4.7%; the per capita disposable income of rural households was 10,551 yuan, a nominal growth of 7.8% year on year and a real growth of 7.2%. In terms of income sources, the nationwide per capita salary income, net business income, net property income and net income from transfers grew by 6.8%, 7.0%, 4.7% and 6.1% in nominal terms, respectively. The median nationwide per capita disposable income of residents was 16,393 yuan, with a nominal growth of 5.4% year on year.

Generally speaking, in the first half of the year, as economic and social development has fully returned to normal and macro policies have come into effect, the national economy showed a good momentum of recovery and high-quality development was advanced steadily. However, we must be aware that the international political and economic situation is intricate and complicated, and the foundation for sustained economy recovery at home is not yet solid. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, adhere to the general principle of pursuing progress while maintaining stability, fully and faithfully apply the new development philosophy on all fronts, focus on the top task of high-quality development and strategic task of creating a new pattern of development, comprehensively deepen reform and opening up, accelerate the modernization of the industrial system, promote smooth economic flow, and make more efforts to change the growth model, improve the economic structure and gather new growth momentum, so as to effectively enhance the quality and reasonable growth of quantity in the economy. Thank you.

Shou Xiaoli:

Thank you, Mr. Fu. The floor is now open for questions. Please identify the media organization you work for before asking your questions.

CCTV:

Judging by the data just released, China's economy has continued to recover in the second quarter of this year. How would you evaluate the economic trends of the first half of this year? In addition, what are the characteristics of our country's economic performance? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, as the economy and society have fully resumed normal operations, policies aimed at stabilizing growth, employment, and prices have gradually taken effect. Market demand has gradually recovered, production and supply have consistently increased, and employment has remained generally stable. People's livelihoods have been effectively guaranteed, the quality of development has continued to improve, and the national economy is on a path of recovery. The characteristics are primarily as follows: 

First, overall economic growth has picked up. In the first half of this year, China's gross domestic product (GDP) grew by 5.5% year on year, significantly outpacing the 3% growth rate for the entirety of last year and the 4.5% growth rate in the first quarter. Since the beginning of this year, the world has experienced a sluggish economic recovery and relatively high inflation, and contractionary monetary policies in major economies have resulted in significant spillover effects. Faced with a complex and challenging external environment, China's economic growth has been notably faster than that of the world's major developed economies, exhibiting strong resilience.

Second, domestic demand has continued to expand. Various policies and measures aimed at stimulating domestic demand have taken effect, continuously releasing its potential. Notably, consumer spending has significantly boosted economic growth. In the first half of this year, total retail sales of consumer goods grew by 8.2% year on year, maintaining a relatively rapid growth rate. The contribution of final consumption expenditure to economic growth reached 77.2%, significantly higher than that of last year. Investment has continued to grow, and investment in key areas has increased swiftly, playing an effective role in optimizing the supply structure. In the first half of this year, fixed-asset investment grew by 3.8% year on year, with infrastructure and manufacturing investments up by 7.2% and 6%, respectively.

Third, industrial development has been strengthened. Driven by a series of policies and measures to ensure stable agricultural production, increase production, and boost the real economy, the primary, secondary, and tertiary industries have continued to recover, and the foundation for development has been consolidated. Agricultural production has remained stable. A bountiful summer grain harvest has been achieved, and the market supply of vegetables, fruits, meat, poultry, eggs, and milk has generally been sufficient. In the first half of this year, the output of pork, beef, mutton, and poultry increased by 3.6% year on year. Industrial production has continued to recover. In the first half of this year, the value-added of industrial enterprises above designated size increased by 3.8% year on year, a 0.8 percentage point faster than the first quarter. The service sector has grown rapidly. In the first half of this year, the value-added of the service sector grew by 6.4% year on year, outpacing economic growth, with the growth rate of service industries featuring frequent contact or clustering of people, such as wholesale and retail, accommodation and catering, and transportation, picking up significantly.

Fourth, the economic mix has been adjusted and optimized. The industrial structure has continued to improve. In the first half of this year, the value-added of the service sector accounted for 56% of GDP and contributed 66.1% to economic growth, higher than that of the secondary industry. The value-added of the equipment manufacturing industry accounted for 32.3% of the value-added of industries above designated size, an increase of 1.4 percentage points over the same period last year. The structure of consumer spending and investment has improved. In the first half of this year, the retail sales of gold, silver, and jewelry, as well as sports and entertainment goods by enterprises above designated size, increased by 17.5% and 10.5%, respectively, and investment in high-tech industries increased by 12.5%, significantly faster than the growth of total investment.

Fifth, the driving force for innovation has continued to grow. New industries have grown and expanded. In the first half of this year, the value-added of aerospace vehicle and equipment manufacturing above designated size, as well as lithium-ion battery manufacturing above designated size, increased by 22.9% and 29.7%, respectively. The value-added of information transmission, software, and information technology services increased by 12.9%. New forms of business have continued to flourish. In the first half of this year, the online retail sales of physical goods increased by 10.8% year on year, accounting for 26.6% of the total retail sales of social consumer goods.

Sixth, employment and people's livelihoods have been ensured. With the economy recovering, the policy of stabilizing employment has continued to show effects, and the employment situation has gradually improved. In the first half of this year, the average surveyed urban unemployment rate registered at 5.3%, down a 0.2 percentage point from the first quarter, and the figure for June logged at 5.2%, indicating a downward trend since the beginning of the year. Personal income has grown rapidly. In the first half of this year, per capita disposable income rose by 5.8% in real terms, considerably faster than the growth rate for all of last year. The income gap between urban and rural residents has narrowed. In the first half of this year, the ratio of per capita disposable income between urban and rural residents decreased by 0.05 compared with the same period last year.

On the whole, our economy has shown a robust momentum of recovery and solid progress in transformation and upgrading. However, it's important to recognize the complex international political and economic situation, the sluggish global economic recovery, and, consequently, the necessity for intensified efforts to achieve sustained economic recovery. Moving forward, we will thoroughly implement the decisions and arrangements of the Central Committee of the Communist Party of China (CPC), adhering to the general principle of pursuing progress while ensuring stability. With our primary focus on high-quality development, we will implement macro policies in a systemic and targeted way, intensify efforts to expand domestic demand, comprehensively deepen reform and opening up, accelerate the cultivation and strengthening of new economic drivers, and invigorate business entities. The aim is to promote overall economic improvement, strive to realize the effective enhancement of economy's quality and achieve a reasonable growth in quantity.

Kyodo News:

Economic growth in the second quarter of 2023 was relatively faster than the same period last year, which was hit by COVID-19, but the international economic situation remains complex. What do you think of the economic growth prospects in the second half of this year? How will you achieve the economic target set for the whole year? Thank you.

Fu Linghui:

Thank you for your questions. In the first half of this year, the Chinese economy overall was in recovery and displayed an encouraging rebound momentum. As the economy and society have returned to normal operations, key indicators have generally improved, new growth drivers have gained strength, the quality of development has steadily risen, and the living conditions of the populace have continued to improve. All these factors have established a solid foundation for achieving the economic and social development targets set for the whole year.

Looking forward to the next stage, despite the complex and challenging external environment and pressures on domestic economic development, the economic fundamentals that will sustain long-term growth remain unaltered. The economy retains its strong resilience, substantial potential, and immense vitality, and the conditions supporting high-quality development remain robust. With the accumulation of positive factors that promote development, the economy is expected to maintain the encouraging momentum of rebound.

First, consumer spending will continue to boost economic growth. Since the beginning of this year, all sectors have actively supported the recovery and increase in consumer spending, gradually unlocking its potential. Consumer spending has played a significant role in boosting economic growth and contributing to the overall recovery. In the first half of this year, final consumption expenditure contributed to 77.2% of economic growth, significantly higher than that of last year. In the next stage, the employment situation will continue to improve further, and personal income will continue to increase, which will help increase people's purchasing power and willingness to spend. Policies aimed at stimulating spending in new energy vehicles and green smart home appliances are expected to have a positive impact on consumption and further support economic recovery.

Second, the service sector will develop better. As the economy and society have fully resumed normal operations, the growth of the service industry has gained significant momentum. Service industries involving direct interaction among people, such as wholesale and retail, accommodation and catering, and transportation, have experienced a notable rebound, substantially contributing to overall economic growth. In the first half of this year, the service sector contributed to more than 60% of economic growth. Looking ahead, there will be an increased demand for services such as cultural tourism, fitness, and sports, as well as producer services such as research and development, design, and business conventions and exhibitions. These factors will drive the service sector to maintain rapid growth and contribute to stable economic performance. The business activity index for the service sector, which registered 52.8% in June, has consistently indicated expansion for six consecutive months.

Third, new growth drivers will become stronger. China has been actively implementing the strategy of innovation-driven development and strengthening its strategic scientific and technological capabilities. Technologies such as modern information technology, artificial intelligence, and big data have been widely applied. Innovative outcomes have continued to emerge, and new industries and new products have grown at a good pace. Since the beginning of this year, significant milestones have been achieved, such as the maiden commercial flight of China's self-developed C919 large passenger aircraft and the successful installation of the world's first 16-megawatt offshore wind turbine. These advancements highlight the ongoing empowerment of high-quality development through scientific and technological innovation. Moreover, the growth of consumer spending on smart products has been expanding, driving the growth of related manufacturing. In the first half of this year, the value-added of equipment manufacturing related to smart product spending increased by 12%. At the same time, in terms of breaking through technological bottlenecks in key fields, the manufacturing sector related to semiconductor-related industries grew relatively fast, and the value-added of manufacturing special equipment for semiconductor devices increased by 30.9%. As for specific products, the output of some new materials and intelligent products has also seen robust growth, with a 23.3% increase in aerospace aluminum production and a 34.1% increase in industrial personal computer (IPC) and system production in the first half of this year. Looking ahead, innovation will provide a stronger boost and inject new impetus into economic development.

Fourth, efforts in green transformation have been significantly rewarded. With a faster pace towards green energy development, we are making progress in promoting green production and lifestyles, and achieving a harmonious coordination between green transformation and economic growth. In the first half of this year, the output of new energy vehicles, solar cells, and charging piles increased by 35%, 54.5%, and 53.1%, respectively. Moreover, there was a 61.6% increase in the export of lithium batteries, solar cells, and electric vehicles. In the upcoming phase, we expect to continue the sound progress of green development, which will contribute to transforming the driving forces of economic growth while improving the quality of economic development.

Furthermore, all localities and departments have been committed to high-quality development, implementing macro policies in a systemic and targeted way, and working hard to expand domestic demand and ensure smooth economic circulation. This endeavor will provide a strong guarantee for stable economic performance. In general, since the beginning of this year, China's economy has gradually shaken off the impact of COVID-19, returned to the track of normal operation, and shown a good recovery momentum. Throughout this year, despite pressure and challenges, our economy will steadily recover, and its development quality will continue to improve as employment improves, personal income increases, domestic demand grows, supply structure adjusts and improves, and new growth drivers become stronger. Therefore, we have the confidence, conditions, and ability to meet the economic and social development targets set for the whole year. Thank you.

Reuters:

Could you please tell us if economic growth in the second quarter was faster or slower than expected? What are the factors behind it? Thank you.

Fu Linghui:

Thank you for your questions. Since the start of this year, the Chinese economy has gradually returned to regular operation. It had a good start in the first quarter and continued its recovery in the second quarter. Generally speaking, the Chinese economy has shown a trend of recovery and improvement in the first half of this year. Regarding the economic performance of other countries, overall economic growth worldwide has accelerated following the adjustment of epidemic prevention and control measures. However, due to different national conditions, stages of development, and the international environment, the pace of their rapid economic growth differs significantly.

Regarding China's economic performance, since the country has fully resumed regular social and economic operations this year and production demand has gradually recovered, sectors like consumption and services, which were greatly impacted by the epidemic earlier, have accelerated their recovery and played a larger role in driving economic growth. The overall stability of agriculture and industry has provided strong support for economic recovery. In general, economic operations have gradually rebounded from the impact of the pandemic and are now back on a growth track. China's GDP grew by 5.5% year on year in the first half of this year, and by 6.3% in the second quarter. China's GDP growth rate of 5.5% is significantly faster than last year's growth rate of 3%, and also faster than the average annual growth rate of 4.5% over the past three years, indicating a notable recovery in economic growth. China's growth rate of 5.5% in the first half of the year is high in both valuation and quality.

First, China's GDP growth rate of 5.5% is faster than many other countries globally. Since the beginning of this year, worldwide economic growth has been sluggish, with major economies struggling to maintain positive growth. However, China has maintained relatively rapid economic growth, providing substantial support for global economic development. Major international organizations have recently increased their expectations for global economic growth. One of the key reasons behind this is that China has maintained its economic recovery. According to statistics released by major economies, in the first quarter of this year, GDP in the United States, the eurozone, Japan, and Brazil grew by 1.8%, 1%, 1.9%, and 4%, respectively. Even considering the situation in the second quarter, China's economic growth rate in the first half of the year remains the fastest among major economies.

Second, China's GDP growth rate of 5.5% results from structural improvement and optimized driving forces. In terms of demand, the economic growth, which was primarily driven by investment and exports last year, is now fueled by consumption and investment. In particular, consumption has played a significantly larger role in driving the economy. In the first half of 2023, final consumption expenditure contributed to over 70% of China's GDP growth. Regarding production, while the economy depended mainly on the industrial sector last year, it is now powered by a combination of the service sector and industry, with the share of the service sector growing considerably. In the first half of this year, the service sector contributed to over 60% of China's economic expansion.

Third, China's 5.5% growth was propelled by innovation and a shift in its development mode. As the innovation-driven development strategy was further implemented, new growth drivers continuously emerged, lending strong support to high-quality development. In the first half of this year, investment in high-tech industries rose 12.5% year on year, the added value of information transmission, software, and information technology services increased 12.9%, and online retail sales of physical goods grew 10.8%. Meanwhile, China's efforts toward green transformation have yielded significant results, considerably bolstering economic growth.

Judging from the environmental quality data in the first half of the year, the percentage of days with good air quality remains at a relatively high level. Among the national surface water sections monitored by the state, the proportion of sections with excellent and good water quality increased by 2.1% year-on-year. In the first half of the year, the output of new energy vehicles and solar cell products increased by 35% and 54.5%, respectively. Energy efficiency also continued to improve, with energy consumption per unit of GDP decreasing by 0.4% year on year in the same period.

Fourth, China's 5.5% growth stems from a high level of opening up and improved trade structure. Despite a sluggish global economic recovery and a slowdown in global trade and investment, China has actively enhanced its high-level opening up and fostered an upgrade in its trade structure. The nation has also strengthened economic and trade exchanges with other countries worldwide, grounded in principles of mutual benefit and win-win cooperation, leading to further progress. In the first half of the year, China's total goods imports and exports rose by 2.1% year on year, in which the proportion of general trade, carrying higher added value, in the total import and export value increased to 65.5%. The development of trade has diversified. China's trade in goods with nations along the Belt and Road Initiative in the first half of 2023 grew by 9.8% year on year, and the total imports and exports to Latin America and Africa increased by 7% and 10.5%, respectively. Cross-border e-commerce and other new foreign trade business models are rapidly evolving.

Fifth, China's 5.5% growth is driven by expanding employment and improvements in people's livelihoods. So far this year, China's urban surveyed unemployment rate decreased to 5.2% in June, mirroring the pre-pandemic level. Rising employment has resulted in higher resident income. In the first half of the year, China's per capita disposable income of both urban and rural residents grew by 5.8%, markedly faster than last year. The economic recovery has incited a higher propensity among consumers to spend, subsequently leading to an increase in consumer spending. In the first half of the year, China's per capita consumption expenditure rose by 7.6%.

Sixth, China's 5.5% growth is characterized by consolidated food and energy security. Since the start of this year, all parties have dutifully contributed to grain production. Even in the face of heavy rain during the harvest period, a plentiful harvest was secured, with the grain output achieving the second-highest in history. This laid a solid foundation for "Chinese people to hold their rice bowls firmly in their own hands." Greater efforts have been exerted to ensure energy supply. In the first half of the year, primary energy production grew by 2.7% year on year, with the output of raw coal, crude oil, and natural gas increasing by 4.4%, 2.1% and 5.4%, respectively. This effectively ensured the energy supply for production and daily life. Thank you.

Cover News:

Statistics show that China's CPI came in flat in June compared with the same period last year, and the producer price index (PPI) fell by 5.4% year on year. Does this mean that deflation is coming? What's your assessment of the price issue at present? Thank you.

Fu Linghui:

Many people have paid considerable attention to the price issue, and there is a lot of discussion about deflation. As I have said at previous press conferences, generally speaking, deflation is not currently apparent in China and is not expected to emerge in the next stage. Even though prices are temporarily operating at a low level, in terms of economic growth and money supply indicators, China's economy is not currently in a state of deflation as it does not meet the necessary conditions.

Examining price itself, in the first half of the year, the sluggish global economic recovery and falling international energy prices led to a drop in domestic energy prices. Additionally, domestic car manufacturers have lowered their prices to increase sales, and pork prices have decreased. Coupled with the high base from the same period last year, the growth of China's CPI slowed down in the first half of the year. China's CPI increased by 0.7% year on year, a 0.6 percentage point lower than the previous quarter. The main characteristics are as follows. First, the growth of food prices declined. In the first half of the year, food prices rose by 2.5% year on year, 1.2 percentage points lower than the first quarter of the year. Among them, the prices of fresh fruits and poultry rose rapidly, up 7.9% and 6.4%, respectively. Due to sufficient hog production capacity, pork prices dropped in May compared to last year, with an average increase of 3.2% in the first half of the year. Second, energy prices fell. Due to a drop in international energy prices, China's energy prices fell by 3.5% in the first half of the year, with gasoline and diesel prices falling by 7.3% and 8%, respectively. Third, service prices rose slightly. Driven by the recovery of service consumption, the growth of service prices has expanded. In the first half of the year, service prices rose by 0.9% year on year, a 0.1 percentage point higher than the first quarter of the year, with prices for flight tickets, hotel accommodation, and tourism rising by 20.2%, 8.6%, and 7.1%, respectively. Fourth, the core CPI increased steadily. In the first half of the year, the core CPI, excluding food and energy, rose by 0.7% year on year, a 0.1 percentage point lower than the first quarter.

China's CPI remained flat in June compared to the same period last year, transitioning from a 0.2% increase in the previous month to year-on-year stability, which has also drawn widespread attention. Generally speaking, a modest increase in CPI is due to a combination of international and domestic factors and is temporary. Since this year, China has fully resumed normal socio-economic activities, market demand has gradually expanded, and production supply has continued to increase. The Chinese economy has demonstrated an encouraging momentum of recovery. In terms of supply, during the epidemic, China intensified efforts to alleviate difficulties for enterprises, thereby preserving the survival of many businesses. Post-epidemic, with its complete industrial system and robust production capacity, China swiftly augmented market supply and improved employment, showing an impressive recovery in production supply. Regarding demand, impacted by the epidemic over the past three years, residents' income and corporate revenue were both affected to some extent. The recovery of corresponding market demand takes some time. The asynchronous recovery between supply and demand has led to a low level of CPI at present to a certain extent.

Imported pressures and the high base from the same period last year have also led to a temporary drop in CPI growth. Looking forward, with the recovery of China's economy, growing market demand, and smooth economic circulation, the supply-demand relationship will gradually ease. Regarding food prices, China's grain output is generally stable, which helps stabilize food prices. The seasonal increase in pork consumption demand will also spur prices to rise. Concerning manufactured goods prices, the influence of international energy prices may persist, but the impact of short-term price reductions and promotions by car manufacturers is expected to fade. In terms of service prices, as demand for services steadily expands, service prices will maintain a stable increase. In the second quarter of the year, service prices rose by 0.9% year on year, a 0.1 percentage point higher than the first quarter. Given the above factors, and as the high base factor from the same period last year gradually diminishes, price increases will progressively return to a reasonable level. Thank you.

Market News International:

The growth rate of real estate development investment declined recently. With the continuous relaxation of real estate policies, what is the trend of real estate investment in the second half of the year?

Fu Linghui:

Thank you for your question. The real estate market is an area that people are concerned about. Since the beginning of this year, all localities and government departments have followed the principle that houses are for living in, not for speculation, and implemented city-specific policies to support the rigid and upgraded demand for housing. We have actively worked to ensure the delivery of presold housing, people's livelihoods and stability. The backlog of demand for house purchases in the first quarter was released, which led to an improvement in the real estate market. In the second quarter, the real estate market gradually returned to normal operation. In the first half of the year, the overall real estate market showed a trend of stabilization. The major indicators such as real estate market sales, development investment, and in-place funds for real estate development enterprises have all improved compared to last year. In the first half of the year, the country's commercial housing sales decreased 5.3% year on year in terms of floor area, and grew 1.1% in terms of value, both significantly better than the whole of last year. The decline in sales area was significantly smaller, and the sales revenue turned from a decrease to an increase. In the first half of the year, real estate development investment decreased 7.9% year on year, and the in-place funds of real estate development enterprises fell 9.8% compared to last year, with the decline narrowing to varying degrees compared with the whole of last year.

The trend shows that as the economy sees an overall recovery and the policies for the healthy development of the real estate market take effect, this sector will gradually stabilize. On the demand side, thanks to the policy that houses are for living in, not for speculation, speculative demand for housing has been gradually repressed, while inelastic demand and demand for upgraded housing have been released in an orderly manner, which will continue to drive the development of the real estate sector. On the supply side, the business models of some real estate companies based on high leverage, high debt and high turnover are unsustainable, and supply in the real estate market is undergoing temporary adjustments. As the adjustments gradually take effect, market supply will also gradually tend toward stability. From a medium to long-term perspective, China's real estate market is transitioning from rapid development in the past to stable development, which is determined by changes in the development stages of the real estate market and adjustments to market supply and demand.

In the next stage, we must adhere to the principle that houses are for living in, not for speculation. We need to accelerate the establishment of a housing system with multiple types of suppliers and support channels that encourages both renting and buying. We will implement a long-term mechanism to promote the stable and healthy development of the real estate market, continue to support the rigid and upgraded demand for housing, regulate the development of the housing rental market, promote stability in the real estate market, and ensure people's livelihood needs are met.

Regarding your concerns about real estate investment, currently, the sector still sees a decline in the gross floor area of new projects and an increase in completed real estate space, resulting in an overall decrease in construction area. Going forward, real estate investment is expected to remain at a low level. However, as the real estate market gradually adjusts, we anticipate that real estate investment will gradually return to a reasonable level. Thank you.

CMG Voice of China:

In the first half of the year, the service sector including accommodation and catering achieved rapid growth. What are the reasons for this? How do you view the development trends of the service sector going forward? Thank you.

Fu Linghui:

Thank you for your questions. The service sector was an outstanding highlight of economic growth in the first half of the year. Since the beginning of this year, China has fully resumed normal order in its social and economic activities. With the effective implementation of policies to stabilize growth, employment and prices, the recovery of its service sector has gathered pace significantly. The modern service industry has seen overall sound development, with new growth drivers developing rapidly, and the expectations of service enterprises have been generally stable. In the first half of the year, the added value of the service sector increased 6.4% year on year, which was significantly higher than the same period last year as well as the whole of last year.

First, the contact-based service industry grew rapidly. With an increase in residents going out to shop, dine and travel, related service industries have accelerated recovery. In the first half of the year, the added value of the accommodation and catering industry, wholesale and retail industry, transportation, warehousing and postal industry increased 15.5%, 6.6% and 6.9% year on year, respectively, all maintaining a rapid growth.

Second, the modern service industry has shown a robust growth trend. Digital development continues to deepen, and the demand for information services is expanding, driving growth in related industries. In the first half of the year, the added value of the information transmission, software and information technology services industry increased 12.9% year on year. Business activities have accelerated recovery, and the demand for services such as exhibitions and tourism has increased, leading to fast growth in related service industries. In the first half of the year, the added value of the leasing and business services industry increased 10.1% year on year.

Third, the new drivers for the development of the service sector have been strengthened. With technological innovation driving growth, the high-tech service industry has seen rapid development. During the January-May period, the revenues of the technology service industry and high-tech service industry increased 12.4% and 11.9% year on year, respectively. In the first half of the year, fixed-asset investment in the high-tech service industry increased 13.9% year on year.

Fourth, the expectations of service enterprises have been generally stable. In June, the Services Business Activity Index stood at 52.8, which has remained in the expansion range for six consecutive months. As for market expectations, the expected index of business activities in the sector was 60.3, 0.2 percentage point higher than the previous month, indicating that service enterprises are optimistic about market prospects.

The service sector has recovered rapidly for several reasons. First, the country has fully resumed normal order in its social and economic activities, creating favorable conditions for the development of the service sector, especially for contact-based services and services involving social gathering. Second, economic activities such as the flow of people and logistics have become more active, significantly driving the growth of related service industries. This year, there has been a significant increase in the tourism and travel activities of residents, and the box offices of cultural performances and films have expanded rapidly. Third, the service sector has seen remarkable innovative progress, with new business forms and models developing rapidly. Technological innovation has significantly driven the growth of the high-tech service industry such as research and development, and the integration of online and offline business activities has accelerated. New service models such as online retail and livestreaming have grown rapidly, injecting new impetus into the development of the service sector. Overall, the service sector has been on track for a sound recovery, which is favorable for boosting production, improving people's livelihoods, expanding employment, and promoting stable economic growth. In the next stage, as domestic demand potential is gradually released and market confidence strengthens, the service sector will continue its good momentum of steady growth. Thank you.

Red Star News:

How was the employment situation in the first half of the year? Will it be possible to achieve the annual target for new jobs? As it is currently graduation season, have there been improvements in the employment prospects for young people? Thank you.

Fu Linghui:

Thank you for your questions. Employment is a matter of concern to many people. This year, driven by the overall improvement of the Chinese economy, the job market has been generally improved. Specifically, as the economy sustains sound recovery and the policies for stable employment continue to take effect, the labor market is becoming more active and the overall employment situation is improving.

First, the scale of employment steadily expanded. In the first half of the year, 6.78 million new jobs were created in urban areas nationwide, an increase of 240,000 year on year. The labor force participation rate of the urban population aged 16 and above has steadily increased. In June, the number of employed people in urban areas increased significantly compared with the same period of the previous year. Among them, the number of people employed in industries such as wholesale and retail, accommodation and catering, and transportation increased significantly.

Second, the surveyed urban unemployment rate decreased. In the second quarter, the average surveyed urban unemployment rate was 5.2%, down 0.3 percentage point from the first quarter. In June, the surveyed urban unemployment rate was 5.2%, 0.3 percentage point lower than the same period last year. The unemployment rate for the main employment groups was at a relatively low level. In June, the unemployment rate for the urban labor force aged 25-59 was 4.1%, which is already lower than the level before COVID-19, and the basic employment situation remained stable.

Third, the overall employment situation for migrant workers improved. In June, the unemployment rate for migrant workers with agricultural household registration was 4.9%, which is at a relatively low level since the beginning of this year. We also saw that at the end of the second quarter, there were 187.05 million rural laborers working outside their hometowns, up 3.2% year on year. This indicates that with the economic recovery, the country's workforce has shown a greater willingness to enter the labor market and land jobs.

The main reasons for the overall improvement in employment are as follows. First, the economy is recovering. In the first half of the year, China's GDP increased 5.5% year on year, a significantly faster growth rate than last year. The expansion of the economy inevitably leads to an increase in market demand, which in turn leads to an increase in labor demand from enterprises and an overall improvement in employment. Second, the service sector is growing rapidly. As mentioned earlier, the service sector involves a variety of industries, hence providing a wide range of employment opportunities. Since the beginning of this year, contact-based service industries such as transportation, accommodation, catering and tourism have shown good recovery momentum, which has significantly boosted employment. Third, the policies for stable employment have taken effect. Since the beginning of this year, the CPC Central Committee has attached great importance to employment, and all localities and government departments have implemented the employment-first policy in a detailed and effective manner. We have implemented various measures to stabilize existing employment, expand job opportunities, improve the quality of employment, and ensure basic employment needs. We have provided stronger support for enterprises to stabilize employment, improved public employment services and enhanced vocational training. All these efforts have created favorable conditions for maintaining stable employment. In addition, as the country has fully resumed normal order in its social and economic activities, offline recruitment and job hunting are becoming more convenient, which is conducive to matching the employment supply and demand, and driving employment growth.

However, we must notice the pressure brought by a huge workforce and related structural issues, as well as the dual problems of young people facing difficulties finding a job and some industries facing difficulties hiring qualified workers. Therefore, we should continue intensifying our efforts to stabilize employment. Young people's employment is important not only to the growth and accomplishment of young people themselves, but also to the development and future of our country. The CPC Central Committee has attached great importance to youth employment, emphasizing that we must give greater priority to boosting employment and business startups of young people, especially college graduates. The executive meetings of the State Council have made important decisions and requirements for ensuring employment; relevant government departments have introduced a series of policies to promote the employment of college graduates and other young people; all localities are taking swift action to ensure that the relevant policies are implemented to the fullest extent and down to the last detail. In the next stage, the employment is expected to remain generally stable due to the continuous economic recovery, the growing labor demand and the effective policies to stabilize employment. As young graduates gradually enter the workforce during the graduation season, the youth unemployment rate is expected to gradually decline. Thank you.

CNBC:

I have three questions. First, is the youth unemployment rate expected to fall next month? Second, the decline in real estate investment has expanded. How will it affect the growth of the real estate industry? Third, what is the sales volume of e-commerce live streaming in the first half of this year, and what is the year-on-year growth, and how much it accounts for in retail consumption? Thank you.

Fu Linghui:

Thank you for your question. With regard to the youth unemployment rate, from a seasonal and historical perspective, the youth unemployment rate will rise during the graduation season as college graduates gradually enter the labor market. Judging from this year's situation, in June, the youth unemployment rate was 21.3%, an overall increase compared with the previous month. Due to the mass influx of young graduates and young people entering the labor market we're likely to see next month, there may be an increase. Generally, as the graduation season passes, young people will gradually find employment. From a historical perspective, after August, the number will gradually decline. This is about youth employment.

The second question is about real estate. As I mentioned in the first question, in general, although the real estate market is still in the adjustment stage this year, the real estate market is gradually showing a stable trend compared with last year. In terms of investment, sales, and corporate funds, they have all improved to different degrees compared with last year. In the next stage, as the real estate market is gradually adjusted in place, the real estate market will gradually stabilize, and real estate investment will gradually return to a reasonable growth level.

The third question is about e-commerce livestreaming sales. I don't have the relevant information yet. You can contact the Information Office of the NBS after the conference to obtain relevant information. Thank you.

Nanfang Daily:

How do you view the performance of the domestic consumer market in the first half of the year, and how does consumption play a role in driving the economy? What is the expected trend in the next stage? Thank you.

Fu Linghui:

Thank you for your question. Consumption is also a matter of great interest to everyone. In the first half of the year, domestic consumption recovery was gaining steam. Since the beginning of this year, as the economy and society have fully returned to normal, economic recovery has improved, consumption scenarios have expanded, consumption promotion policies have taken effect, residents' consumption has steadily expanded, and market sales growth has accelerated. In the first half of the year, the total retail sales of social consumer goods exceeded 20 trillion yuan, reaching 22.8 trillion yuan, a year-on-year increase of 8.2%, growing much faster than last year. From the perspective of per capita consumption expenditure of residents, the national per capita consumption expenditure in the first half of the year saw a nominal year-on-year growth of 8.4%, 5.9 percentage points faster than the same period of the previous year. It mainly has the following features.

First, service consumption grew rapidly, and travel and contact consumption grew relatively well. With the recovery of various service consumption scenarios, residents' service consumption expenditures have increased, and catering, transportation, and tourism consumption have grown rapidly. In the first half of the year, the national residents' per capita service consumption expenditure increased by 12.7% year on year, which was significantly faster than the growth rate of all consumption expenditures, among which, transportation expenditure increased by 12.9%. In the first half of the year, the national catering revenue increased by 21.4% year on year and the operating passenger traffic increased by 56.3% year on year. During the Dragon Boat Festival this year, the number of domestic tourists and tourism revenue increased by 32.3% and 44.5%, respectively.

Second, the sales of commodities grew steadily, and the sales of upgraded goods grew rapidly. While service consumption is recovering rapidly, commodity consumption is expanding steadily, with sales of commodities that meet the developmental needs of residents growing remarkably. In the first half of the year, retail sales of goods increased by 6.8% year on year, and 80% of retail sales of enterprises above designated size maintained growth. Among them, the retail sales of upgraded commodities, such as gold-silver jewelry, sports and entertainment products, increased by 17.5% and 10.5% year on year, respectively. Consumption of bulk commodities, such as automobiles, continued to grow. In the first half of the year, the retail sales of automobiles above designated size increased by 6.8% year on year.

The third is the growth of new drivers of consumption and the expansion of green consumption and digital consumption. With the change in residents' consumption concept, the policy of promoting consumption upgrading has delivered, and consumption has continued to gather new momentum. Sales of green smart products grew rapidly. In the first half of the year, sales of new energy passenger vehicles exceeded 3 million, a year-on-year increase of 37.3%. Retail sales of low-energy household appliances and audio-visual equipment for units above the designated size increased by more than 20% year on year. Big data monitoring shows that during the 6.18 shopping festival, the turnover of smart home appliances and audio-visual equipment grew much faster. With the promotion of new business models such as live streaming sales and instant retail, online retail sales have grown rapidly. In the first half of the year, online retail sales of physical goods increased by 10.8% year on year.

Fourth, the potential in cultural and entertainment consumption has been released, and the rural market is picking up. With the orderly recovery of offline consumption scenarios, sports events, concerts, theater performances, and other recreational and sports activities have increased, driving the expansion of consumption. In the first half of the year, national per capita cultural and entertainment expenditure of residents increased by 38.5% year on year in nominal terms. The national box office increased by 52.9% year on year, and attendance increased by 51.8%. At the same time, rural revitalization is advancing steadily, and the rural consumer market remains active. In the first half of the year, the retail sales of consumer goods in rural areas increased by 8.4% year on year, faster than that in urban areas, and the retail sales of cosmetics and gold-silver jewelry in units above designated size in rural areas also grew faster than urban areas. The development of rural e-commerce is accelerating. Big data monitoring shows that the growth rate of online retail sales in rural areas during the 618 (June 18) shopping festival was faster than that of all online retail sales.

In general, the consumption potential was gradually released in the first half of the year, and the recovery of consumption showed positive results, which promoted economic development and improvement of people's livelihood. From the perspective of the whole year, there are many favorable conditions to support the growth of consumption, and consumption is expected to continue to expand. One is the huge consumption potential. At present, China is experiencing a rapid upgrade in its consumption structure. With the steady advancement of urbanization, effective implementation of rural revitalization, and continuous improvement in consumption-related infrastructure, all these factors are conducive to the release of consumption potential. The second is the gradual increase in consumption capacity. Since the beginning of this year, the economic recovery and the employment situation have improved, and residents' income has continued to increase, which is conducive to enhancing residents' consumption capacity and willingness to consume. Third, the consumption environment continued to improve. The economy and society have fully returned to normal. Consumption scenarios have continued to expand, and new ones have continued to emerge, bringing vitality to the recovery of consumption. At the same time, various regions and departments are actively promulgating and implementing policies to promote consumption and maintain a good consumption order, which is conducive to enhancing consumer confidence. It should also be noted that the new consumption growth points represented by green consumption and smart product consumption are gradually forming, which will help promote positive developments in consumption.

In the next stage, to further release the consumption potential, we must do everything possible to increase the income of urban and rural residents, continue to implement consumption promotion policies, optimize the consumption environment, increase the supply of high-quality consumption products, cultivate and expand emerging consumption, and promote stable, sustainable, and healthy economic development. Thank you.

Global Times:

Since the beginning of this year, the growth rate of investment has continued to slow down. What is the main reason behind this? What do you think of the investment data in the first half of the year? And what is the outlook for future investment growth? Thank you.

Fu Linghui:

Thank you for your question. Investment is an important field for expanding domestic demand. Since the beginning of this year, due to the adjustments to the real estate market, the growth rate of fixed asset investment has slowed down, but all regions and departments have implemented the plans and arrangements of the Party Central Committee to actively expand effective investment, optimize the investment structure, promote major infrastructure construction, support enterprises to increase investment in innovation, and maintain sustainable growth of fixed asset investment. In the first half of the year, the fixed asset investment increased by 3.8% year on year, the investment structure continued to be optimized, and investment in key areas continued to strengthen.

First, infrastructure investment grew rapidly. Concerted efforts have been made to promote major infrastructure construction, such as transportation and water conservancy, and the results became more evident. In the first half of the year, infrastructure investment increased by 7.2% year on year, of which investment in railway transportation and water conservancy management increased by 20.5% and 9.6%, respectively. The construction of new infrastructure moved forward steadily, laying a good foundation for long-term economic and social development. In the first half of the year, investment in new infrastructure construction increased by 16.2% year on year, of which investment in new information infrastructure such as 5G and data centers increased by 13.1%, and investment in new integrated infrastructure such as industrial internet and smart transportation increased by 34.1%.

Second, manufacturing investment continued to grow. The manufacturing industry is showing strong momentum in upgrading and development, and investment in capital and technology-intensive industries is growing rather rapidly. In the first half of the year, manufacturing investment increased by 6% year on year, of which investment in equipment manufacturing increased by 14.4%, playing a significant role in supporting the growth of investment in manufacturing. The pace of green transformation of the manufacturing industry has accelerated, and investment in new energy vehicles, lithium battery manufacturing and other industries has maintained rapid growth. In the first half of the year, investment in automobile manufacturing and electrical machinery and equipment manufacturing increased by 20% and 38.9%, respectively, year on year.

Third, the innovation investment demonstrated good growth momentum. Investment in innovation represented by high-tech industries and technical services, continued to increase, and its role in supporting investment growth was enhanced. In the first half of the year, investment in high-tech industries increased by 12.5% year on year, significantly faster than the growth of total investment. Enterprises' growing demand for technical services drives the continuous increase of investment in related industries. In the first half of the year, investment in professional technology and technological achievements transformation increased by 51.6% and 46.3% year on year, respectively.

Fourth, investment in emerging fields expanded. As the digital transformation of the economy continues to deepen, related investments have maintained rapid growth. In the first half of the year, investment in electronics and communication equipment manufacturing and e-commerce services increased by 14.2% and 22.2%, respectively. The green transformation of energy has accelerated, and investment in clean power has increased. In the first half of the year, investment in clean power increased by 40.5% year on year, of which investment in solar and wind increased by 84.4% and 16%, respectively.

All these show that although investment growth has slowed this year due to multiple factors, the investment structure has continued to be optimized, and its support for future development has gradually increased. In the next stage, we will continue to give full play to the role of government investment and policy incentives and guidance, effectively stimulate private investment, continue to optimize the investment structure, and improve investment efficiency to promote high-quality economic development. Thank you.

China Financial and Economic News:

China will launch the fifth national economic census this year. Could you please provide an update on the current progress of the census? Thank you.

Fu Linghui:

Thank you for your question and your interest in the economic census. The fifth national economic census is a significant survey of our country's economic situation and strength as China embarks on a new journey of comprehensively building a modern socialist country. On July 7, the State Council held the first plenary meeting of the Leading Group for the Fifth National Economic Census, along with a nationwide teleconference. During these meetings, new plans for implementing and deploying the economic census work were discussed, resulting in further comprehensive mobilization. All regions and relevant departments have diligently adhered to the guiding principles of these meetings, working closely together to advance all aspects of the fifth national economic census.

In the next stage, the focus of the economic census work will be on conducting the inventory survey for various units. This survey aims to gather information on the basic situation and distribution of various legal entities engaged in economic and social activities within China, including industrial activity units, as well as self-employed individuals engaged in secondary and tertiary industry activities. The main object is to accurately identify and categorize the subjects for the fifth national economic census, clarify the registration responsibilities of local census agencies and relevant departments, ensure precise definition and coverage of the types of subjects to be surveyed, and avoid duplication or omission of units for the census. These efforts will lay the foundation for subsequent economic census activities.

The unit inventory survey is an essential foundational task that ensures the smooth implementation of census registration. Based on the results of the unit survey, the census unit list and the sample list of self-employed individuals can be compiled. This aids in clarifying the types of census forms to be filled out by census subjects. The quality of the survey work is directly related to the success of the census initiative.

The subjects of the unit inventory survey encompass all legal entities engaged in economic and social activities within China, including industrial activity units and self-employed individuals involved in the secondary and tertiary industries. The primary method involves county-level census agencies organizing census enumerators to conduct "door-to-door" surveys using handheld electronic devices, collecting information, and filling out census forms based on different categories. The survey work primarily includes selecting and training census enumerators, dividing census areas, compiling of census registers, conducting "door-to-door" surveys and verifying data. These activities will take place from June to December of this year, with a specific emphasis on the "door-to-door" survey primarily conducted from August to October. During this period, census personnel wearing Census Enumerator Certificates and Census Supervisor Certificates will come to collect information for the census forms.

I would like to take this opportunity to request the full cooperation of all survey subjects in supporting the door-to-door survey work. Please prepare relevant certificates and documents in advance and provide timely and accurate information, which will be used solely for the census purposes. All levels of census agencies and personnel are committed to maintaining the confidentiality of the provided information. Let's work together to complete the unit survey successfully. I would like to extend our heartfelt gratitude for everyone's immense support towards the economic census work. Thank you.

National Business Daily:

Despite the risk of shrinking external demand, China's foreign trade volume in the first half of this year reached a record high of 20.1 trillion yuan. Could you please analyze the reasons behind this? Also, how does the NBS foresee the trend of foreign trade for the second half of the year? Thank you.

Fu Linghui:

Thank you for your questions. Foreign trade is something that everyone is paying close attention to as well. Since the beginning of this year, the global economic recovery has been weak, and major economies have tightened monetary policies to curb high inflation, which has aggravated the contraction in global demand. The global manufacturing PMI's new export orders index has consistently remained in the contraction zone, and sluggish global trade has inevitably affected China's import and export growth. However, China's foreign trade operation remains robust and dynamic despite these pressures. Thanks to various measures to stabilize foreign trade, China's import and export volume exceeded 20 trillion yuan in the first half of the year. The total value of goods imports and exports reached 20.1 trillion yuan, setting a new historical record for the same period and showing a year-on-year growth of 2.1%. Exports grew by 3.7%, and China's share in global exports remained relatively stable. In the next stage, despite continuous pressure from shrinking external demand, China's foreign trade is expected to withstand the challenges and progress toward the goal of stability and quality improvement.

First, China's production and supply capabilities are relatively robust. China has a comprehensive industrial system with well-developed supporting industries, strong organizational capabilities, and a resilient supply chain. This provides a solid foundation for foreign trade development. Looking at the situation in the first half of the year, China's traditional export products continued to grow. In the first half of the year, China's exports of mechanical and electrical products increased by 6.3% year on year.

Second, the results of high-level opening-up are continuously manifesting. China remains steadfast in opening wider to the outside world, expanding economic and trade exchanges with countries around the world based on mutual benefit and win-win cooperation. This includes advancing Belt and Road cooperation, promoting the development of free trade zones, and expanding the growth space for foreign trade. In the first half of the year, China's imports and exports with countries along the Belt and Road increased by 9.8%. Additionally, exports and imports with Africa and Latin America grew by 10.5% and 7%, respectively.

Third, new drivers for foreign trade growth are gradually emerging. As China's industrial upgrading continues, the steady improvement of market competitiveness for new products has become a new highlight driving foreign trade growth. In the first half of the year, exports of "three new major export products," namely electric passenger cars, lithium batteries, and solar cells, increased by 61.6% year on year. Simultaneously, new forms of foreign trade, such as cross-border e-commerce, are developing rapidly, creating favorable conditions for improving the quality and expanding the scale of foreign trade.

It's also worth noting that various localities and departments have taken proactive measures to ensure stable and well-structured foreign trade. These measures have helped foreign trade entities actively cope with the contraction of external demand, seize market opportunities, and stabilize import and export trade. In the first half of the year, imports and exports by private enterprises grew by 8.9% year on year, playing a positive role in stabilizing foreign trade.

Overall, while foreign trade is experiencing growth pressures, there are also many favorable conditions. Going forward, we need to effectively implement various policies to stabilize foreign trade and strive to achieve our goal of promoting stability and improving the quality of foreign trade. Thank you.

Bloomberg:

My question is about wages. So, wage growth is about 5.8%, I think, which is slightly faster than GDP but is still not back to the pre-pandemic levels of above 8% expansion. How will that affect the sustainability of any consumption recovery? And how do you expect that consumption will grow faster than GDP when wages are basically only growing as fast as GDP? Thank you.

Fu Linghui:

Thank you for your questions. The wage growth you mentioned likely refers to the real increase in residents' income. In the first half of the year, the nationwide per capita disposable income of residents saw real growth of 5.8% and nominal growth of 6.5% year on year, maintaining a relatively rapid growth rate. About the pre-pandemic levels of 8% expansion that you mentioned, I believe that was nominal rather than real growth. As for the situation this year, China's economy has shaken off the impact of the pandemic, demonstrating a momentum of recovery, and is gradually picking up. Residents have witnessed expanding employment channels and steadily increasing incomes. In the first half of the year, per capita disposable income of residents grew 5.8% year on year, 2 percentage points faster than that of the first quarter. This is the real growth rate, taking into account price factors, which indicates a steady rise in residents' incomes and its positive role in boosting consumption. As production, allocation, circulation, consumption, and other aspects of economic activity gradually improve, income growth will further stimulate and support consumption.

Overall, final consumption expenditure accounted for 77.2% of economic growth in the first half of the year, and it is expected to continue to be a driving force in the upcoming period. China's consumption structure is undergoing rapid evolution and development. The increase in incomes and the enhancement of the consumption environment are conducive to the sustained expansion of consumption, and they will play an increasingly critical role in facilitating the transition toward high-quality economic growth. Thank you.

Shou Xiaoli:

We will have one last question.

ThePaper.cn:

In the first half of this year, the profits of China's industrial enterprises above designated size continued to fall by double digits. When can these enterprises bear less pressure? What does the NBS expect the trend to be in the year's second half? Thank you.

Fu Linghui: 

Thank you for your questions. Since the beginning of this year, the overall performance of the industrial sector has seen a stable recovery. The progress of the industrial sector and corporate performance are intimately connected. As market demand gradually recovered during the first half of the year, and the measures put in place to strengthen and improve the real economy as well as promote industrial transformation and upgrading took effect, overall industrial production maintained stable growth. Moreover, the structure was optimized, the new growth momentum was steadily gathered, and the development quality improved steadily.

First, industrial production has experienced a gradual recovery. The total value added by industrial enterprises above designated size grew by 3.8% year on year in the first half of the year, which is 0.8 percentage point faster than in the first quarter. Among the 41 major industrial sectors, 26 maintained growth in the year's first half, accounting for 63.4% of the total. 331 out of 620 major industrial products saw production growth. In other words, more than 50% of them achieved growth.

Second, steady progress has been made in industrial upgrading. The technological intensity of industrial production continues to improve. In the first half of the year, the value added by equipment manufacturing increased by 6.5% year on year, 2.7 percentage points faster than that of industrial enterprises above designated size. It contributed to 53.9% of the growth of all industrial enterprises above designated size and effectively supported the recovery of industrial production. Specifically, the value added of electrical machinery and equipment manufacturing saw a year-on-year increase of 15.7%, and that of auto manufacturing grew by 13.1% year on year.

Third, advanced manufacturing has experienced relatively rapid growth. With the growth momentum of the aviation and aerospace sectors, and the commercial operation of China's self-developed large passenger aircraft, the enabling role of advanced manufacturing has become increasingly prominent. In the first half of the year, the value added by aircraft, spacecraft, and equipment manufacturing saw a year-on-year increase of 22.9%. All sectors have strengthened efforts to make breakthroughs in key fields and links concerning semiconductors, and related production has grown rapidly. In the first half of the year, the manufacturing of special equipment for semiconductor devices and electronic and electromechanical components increased by 30.9% and 46.5% year on year, respectively.

Fourth, the green transformation of industries has witnessed notable improvement. The new energy vehicle (NEV) sector has shown sound momentum and helped drive the growth of related products. In the first half of the year, NEV output increased by 35% year on year, and that of lithium-ion batteries and charging piles surged 46.4% and 53.1% year on year, respectively. Products related to clean energy also saw rapid growth. In the first half of the year, the output of photovoltaic cells, wind turbines, and hydroelectric generators increased by 54.5%, 48.1%, and 32.3% year on year, respectively.

Fifth, the production of intelligent products and new materials has picked up. Intelligent consumer goods have experienced rapid production growth. In the first half of the year, the manufacturing of smart consumer equipment increased by 12%. Specifically, the manufacturing of intelligent vehicle equipment and unmanned aerial vehicles grew by 36.3% and 12.5%, respectively. The supply of new materials also increased. In the first half of the year, the output of ultra-clear glass, polysilicon, and monocrystalline silicon for the solar energy industry increased by 89.1%, 86.4%, and 54.1%, respectively.

Regarding the profits of industrial enterprises mentioned in your question, we believe that the sustained recovery of industrial production has laid a solid foundation for improving enterprise profits. From January to May, the decline in profits of industrial enterprises above designated size narrowed by 1.8 percentage points compared to that from January to April. This trend constitutes an improvement for three consecutive months. First, the profits of equipment manufacturing and other manufacturing sectors continued to recover. During the January-May period, various policy measures designed to bolster manufacturing took effect. The decline in profits in the manufacturing sector narrowed by 3.3 percentage points compared to that in the first four months. This reduction resulted in a decline in the profit decrease of industrial enterprises above designated size by 2.5 percentage points, which played a significant role in improving the profits of industrial enterprises. Among them, the profits of equipment manufacturing in May saw a year-on-year increase of 15.2%, maintaining double-digit growth for two consecutive months. Second, profits in the electricity, gas, and water-related sectors grew rapidly. From January to May, profits from the production and supply of electricity, heat, gas, and water increased by 34.8% year on year, 0.7 percentage point faster than during the January-April period. This growth has continuously driven the profit increase of industrial enterprises.

Although industrial production is currently recovering steadily and the quality of development continues to improve, the level of connection between industrial production and sales still needs to be enhanced. Despite anticipated challenges, China is expected to see an increasingly solid foundation for the recovery of the industrial economy and experience continuous improvements in the profitability of industrial enterprises. This positive outlook can be attributed to factors such as economic recovery, increased market demand, enhanced capacity for innovative development, the emergence of new growth drivers, and the implementation of policies and measures aimed at strengthening the industrial sector. Thank you.

Shou Xiaoli:

Thank you, Mr. Fu and friends from the media. Today's press conference is hereby concluded. Goodbye.

Translated and edited by Xu Xiaoxuan, Wang Yiming, Zhang Jiaqi, Zhang Rui, Cui Can, Ma Yujia, Liu Caiyi, Wang Wei, Yan Bin, Liu Qiang, Li Huiru, Zhu Bochen, Zhou Jing, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Liu Guoqiang, deputy governor of the People's Bank of China (PBC)

Ms. Ruan Jianhong, spokesperson of the PBC and director general of the Statistics and Analysis Department of the PBC

Mr. Zou Lan, director general of the Monetary Policy Department of the PBC

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 14, 2023

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are joined by Mr. Liu Guoqiang, deputy governor of the People's Bank of China (PBC). Mr. Liu will brief you on China's financial statistics in the first half of 2023 and take your questions. Also joining us today are Ms. Ruan Jianhong, spokesperson of the PBC and director general of the Statistics and Analysis Department of the PBC; and Mr. Zou Lan, director general of the Monetary Policy Department of the PBC.

Now, I will give the floor to Mr. Liu Guoqiang.

Liu Guoqiang:

Friends from the media, good morning. Since the beginning of this year, the PBC has followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and resolutely implemented the decisions of the Central Committee of the Communist Party of China (CPC) and the State Council. It has remained committed to the general principle of pursuing progress while ensuring stability, made prudent monetary policy more targeted and effective, strengthened counter-cyclical regulation, and worked to improve the overall economic performance. Throughout the first half of this year, the financial data saw a notable increase in the first quarter, followed by a slowdown in April and May, and a subsequent rise in June. In general, the financial sector remains stable with reasonably ample liquidity and a constantly improving credit loan structure. The financing costs of the real economy have fallen steadily, and the financial sector's enabling role for economic growth has continued to strengthen.

In terms of the total amount, we have maintained a proper and adequate level of liquidity and stabilized financial support to bolster the real economy. In the first half of this year, the PBC cut the reserve requirement ratio (RRR) for financial institutions by 0.25 percentage point. The move has unleashed long-term liquidity, enhanced the stability and sustainability of the growth of credit loans, and effectively served the real economy. At the end of June, the broad measure of money supply (M2), the existing amount of aggregate financing for the economy, and RMB loans had increased by 11.3%, 9% and 11.3% year on year, respectively. In the first half of the year, the additional amount of aggregate financing for the economy amounted to 21.55 trillion yuan, 475.4 billion yuan more than the previous year; and RMB loans increased by 15.73 trillion yuan, 2.02 trillion yuan more than the previous year.

In terms of structure, the composition of credit loans keeps improving, which has enhanced the growth momentum of economic development. Since the beginning of this year, the PBC has fully leveraged the dual functions of its monetary policy's aggregate and structure. Its structural monetary policy is well focused, reasonably allocated, and properly implemented. The PBC continues to introduce inclusive loans granted to micro and small enterprises (MSEs) and the loan support scheme which ensures the delivery of housing projects. The PBC will keep strengthening support for key areas and weak links in the national economy, including inclusive financing, sci-tech innovation, green development and infrastructure. At the end of June, the balance of medium and long-term loans granted to the manufacturing sector surged 40.3% over the previous year, 29 percentage points higher than the growth rate of various loans; that granted to the infrastructure sector increased by 15.8% year on year, 4.5 percentage points higher than various loans; and that granted to small and medium-sized enterprises (SMEs) that produce new and unique products increased by 20.4% year on year, 9.1 percentage points higher than various loans. The balance of inclusive loans granted to MSEs increased by 26.1% year on year, 14.8 percentage points higher than various loans. The number of entities granted such inclusive loans reached 59.35 million, close to the 60-million-threshold, up 13.3% year on year. In the first half of the year, the total amount of personal housing loans granted increased by 516.4 billion yuan year on year.

In terms of interest rate, the financing costs of the real economy have dropped steadily. In the first half of the year, the PBC kept fine-tuning market-oriented interest rate formation as well as the transmission mechanism for interest rates, and optimized its policy interest rate system. The PBC leveraged the reform effect and guiding role of the loan prime rate (LPR), and lowered the one-year and five-year LPR by 10 base points, which resulted in a steady decline in the costs of enterprises' financing activities and residents' credit loans. In the first half of the year, the weighted average interest rate of newly issued enterprise loans was 3.96%, 25 base points lower than the same period last year; and that of personal housing loans was 4.18%, 107 base points lower than the same period last year.

Moving forward, the PBC will keep implementing a prudent monetary policy in a targeted and effective manner. It will make good use of cross-cyclical adjustments and fully leveraging the effectiveness of monetary and credit policies. The PBC will coordinate efforts to promote the continued improvement in economic performance, consistently enhance the growth momentum, improve public expectations, defuse risks and hidden dangers, and facilitate a positive economic cycle.

Thank you.

Xing Huina:

Thank you, Mr. Liu. Now the floor is open for questions. Please identify the media organization you work for before asking your questions.

Asahi Shimbun:

China's economy has continued to recover since the beginning of this year, yet experts have pointed out the recovery has been slower than anticipated. How does the PBC perceive the speed of recovery for the second half of this year? What financial measures should be introduced during this period?

Thank you for your questions. Currently, the macroeconomic data is experiencing a slowdown, which has sparked heated discussion. Indeed, we should not evade questions that truly exist. At the same time, we also believe that analyzing the macroeconomy requires not only a question-oriented approach, but also a systemic mindset, and we need to give attention to the positive side. For example, financial data has seen a significant rebound with multiple highlights, and the overall macroeconomic performance has also achieved an upturn. First, the financial sector continues to serve as a crucial contributor to infrastructure project investment. At the end of June, medium- and long-term lending to the infrastructure sector increased 15.8% year on year, which has effectively facilitated the construction of major projects. Over 70% of the 739.9 billion-yuan policy-backed and developmental financial instruments have been allocated. The purchasing managers' index (PMI) for the construction sector remained high in June, at over 55%. Second, residents' loans experienced reasonable growth with a steady decline in costs, which has contributed to a steady recovery in consumption. In the first half of this year, short-term personal loans grew by 300.9 billion yuan, a year on year increase of 401.9 billion yuan. The mortgage rates for personal housing loans was 4.11% in June, a decrease of 0.51 percentage point year on year. The demand for big-ticket consumer goods continues to be unleashed. Online consumption saw rapid growth, and the consumption of services keeps picking up. Since July, the passenger flow by railway and air amid the summer travel rush increased significantly compared with the same period of 2019. Third, targeted support for key areas, such as private MSEs and the manufacturing sector, has been strengthened, while both the overall export and private enterprises have stayed resilient. At the end of June, the balance of inclusive loans granted to MSEs increased by 26.1% year on year. The balance of medium and long-term loans allocated to the manufacturing industry surged 40.3% compared with the previous year. As the momentum of the global economic recovery wanes and the global trade volume registers negative growth, many countries are seeing a decline in exports, with some experiencing a drastic drop. Despite the situation, China's dollar-denominated exports of goods still achieved positive growth in the first half of this year. Notably, the exports of private business brands increased by 11.5%.

The fundamentals driving China's long-term growth remain robust, and we should have unwavering confidence in achieving high-quality development. The challenges confronting the current economy are normal phenomena in the post-pandemic recovery process. Globally, both consumption and economic recovery are expected to be gradual, with a general belief that it takes about a year for normality to be restored. Meanwhile, in China, the stable transition from the pandemic has spanned approximately six months, with positive trends already evident in economic cycles, residents' incomes, and consumer spending. While the global political and economic situation remains complex, China remains robust domestic development potential. Additionally, overall market expectations remain steady, effectively navigating external environmental shifts. From a long-term perspective, the economy is increasingly leaning towards high-quality development. The impetus from technological innovation continues to strengthen, green transformation progresses steadily, the consumer market gradually heats up and upgrades, and the momentum for high-quality development keeps accumulating. This presents a good opportunity for structural adjustments in the economy.

Against the backdrop of high external economic inflation, prices in China have remained relatively stable. Over the recent months, we have noticed a downward trend in prices, although deflation has not occurred. The year-on-year increase in the Consumer Price Index (CPI) has shown fluctuations and is projected to continue its decrease into July. This is primarily attributable to temporary factors such as lag in demand recovery and base effects. Our macroeconomic environment is witnessing a steady recovery, with M2 experiencing sustained growth, setting it apart from typical deflationary periods in history. Therefore, it can be affirmed that deflation is not currently taking place, and there is no risk of deflation in the second half of the year. Our monetary conditions are reasonable and moderate, and residents' expectations remain steady. As policy measures continue to yield results, the gap between supply and demand will narrow further, and the CPI is projected to ascend gradually after August. The overall trend of the CPI for the entire year is expected to follow a U-shaped pattern. Prices are likely to decline initially and then rise throughout the year, approaching 1% by the end of the year.

In accordance with the arrangements of the CPC Central Committee and the State Council to intensify macroeconomic policy regulation, stimulate effective demand, and enhance policy reserves, a prudent monetary policy will persist in being precise and potent. There remains ample policy space to address unexpected challenges and changes. Concerning overall quantity, we will reasonably manage the pace and intensity in response to changing circumstances, bolster countercyclical adjustments, and create a favorable monetary and financial environment for continuous economic recovery and improvement. Regarding prices, we will strive for steadily decreasing financing costs for the real economy, effectively supporting the expansion of potential demand. Structurally, our focus will be on key areas, adopting a reasonable and moderate approach, and discerning the appropriate timing for advancement or withdrawal. Financial support for key sectors such as small- and micro-sized private enterprises, green innovation, and others will continue to grow. The 16 supportive measures intended to ensure the steady development of the real estate sector have been definitively extended. Previously introduced policy measures are starting to take effect, and we need to exhibit patience and confidence in achieving sustained and stable economic growth. Thank you.

Cover News:

How would you comment on the credit supply situation in the first half of the year? Which sectors have received the majority of credit allocations? What changes are expected in terms of the overall quantity and structure of credit in the next steps? Thank you.

Ruan Jianhong:

Thank you for your questions. In the first half of the year, financial institutions saw a 15.73 trillion yuan increase in total loan issuance, which represents a year-on-year increase of 2.02 trillion yuan. This indicates that the financial system has further reinforced its support for the real economy.

In the first half of the year, the primary drivers of loan growth were enterprises and public institutions. Loans to these entities increased by 12.81 trillion yuan, a year-on-year increase of 1.42 trillion yuan, accounting for 81.5% of total credit growth. Meanwhile, household loans rose by 2.8 trillion yuan, a year-on-year increase of 572.3 billion yuan. This growth in household loans was largely due to increases in personal business loans and short-term consumer loans. Specifically, personal business loans increased by 2.3 trillion yuan, marking a year-on-year increase of 759.3 billion yuan, and personal short-term consumer loans increased by 300.9 billion yuan, a year-on-year increase of 401.9 billion yuan.

When examining the distribution of loans by industry, it's clear that the bulk of the increased loans were primarily directed toward key sectors such as manufacturing and infrastructure. The real estate industry also demonstrated a sustained recovery in loan growth, contributing to further optimization of the loan structure. Specifically:

The growth rate of medium- to long-term loans in the manufacturing sector has stayed at a relatively high level. By the end of June, these loans in the manufacturing sector had grown by 40.3% year on year, 10.7 percentage points higher than the same period last year and 22.3 percentage points higher than the growth rate of such loans in all industries as a whole. In the first half of the year, loans to the manufacturing sector increased by 2.15 trillion yuan, a year-on-year increase of 821.9 billion yuan. Among these, medium- to long-term loans in the high-tech manufacturing sector grew by 41.5% year on year, an increase of 11.5 percentage points compared to the same period last year. In the first half of the year, medium- to long-term loans in the high-tech manufacturing sector increased by 483.5 billion yuan, a year-on-year increase of 184.7 billion yuan.

Looking at the infrastructure industry, medium- to long-term loans have grown rapidly. By the end of June, medium- to long-term loans in the infrastructure industry increased by 15.8% year on year, which was 3.3 percentage points higher than the same period last year. In the first half of the year, there was an additional 3.25 trillion yuan in loans, with a year-on-year increase of 1.1 trillion yuan.

The growth rate of medium- to long-term loans in the real estate industry continues to rise. By the end of June, these loans in the real estate industry increased by 7.1%, a 0.2 percentage point rise from the previous month and up 8.5 percentage points from the same period last year. This marks the 11th consecutive month of increasing growth rates. In the first half of the year, the real estate industry saw an increase of 628.7 billion yuan in medium- to long-term loans, a year-on-year increase of 459.0 billion yuan.

Next, the People's Bank of China will continue effectively utilizing the dual functions of monetary policy tools, focusing on the total quantity and structural aspects. The aim is to maintain a reasonable and steady growth of credit, while consistently enhancing support for key sectors and addressing weak areas in the national economy, so as to contribute to further improving the operation of the real economy.

Thank you!

Market News International: 

Recently, many banks have cut deposit rates again. What is the impact of the reduction in deposit rates on households' fixed-term deposits and their medium- and long-term loans? And what is the future trend of these two items? Thank you. 

Zou Lan:

Thank you for your questions. In April 2022, under the guidance of the People's Bank of China, members of the interest rate self-regulatory mechanism formed a market-based adjustment mechanism for deposit rates. This mechanism guides banks to adjust deposit interest rates reasonably based on changes in market interest rates. Following this mechanism, banks conducted the first round of independent adjustments to deposit interest rates from September 2022 to April 2023. In recent months, there has been a significant increase in RMB deposits, accompanied by a continuous decline in market interest rates. However, the shift towards fixed-term and long-term deposits has increased the costs of liabilities of the banks, causing a net interest margin narrowing to around 1.7%. In response, state-owned commercial banks and joint-equity commercial banks have proactively lowered certain term deposit rates, according to changes in market supply and demand, interest rate trends, and their own business conditions. This proactive adjustment by banks demonstrates the effectiveness of the market-based adjustment mechanism for deposit rates, signifying that deposit rates are more market based.

After the proactive cut on deposit interest rates by banks, these rates have continued to exhibit a slight downward trend. In June 2023, the weighted average interest rates for demand deposits were recorded at 0.23%, marking a decrease of a 0.09 percentage point year on year. Meanwhile, the weighted average interest rates for time deposits stood at 2.22%, down a 0.12 percentage point year on year. This trend contributes to strengthened control over liability costs, creating favorable conditions for reducing loan interest rates for enterprises and enhancing banks' capability and sustainability to support the real economy. Concurrently, under the coordination of the self-disciplinary mechanism for setting interest rates, all types of banks have orderly adjusted their deposit interest rates. Despite these changes, deposits in banks continue to increase, and their distribution remains largely stable, effectively preserving a sound competitive order.

Next, the PBC will persist in deepening market-based interest rate reforms. It will continue to utilize the critical role of the market-based adjustment mechanism for deposit interest rates, guide the self-disciplinary mechanism for setting interest rates to maintain competitive order in the deposit market, promote stable bank liability costs, and enhance its ability to provide sustained financial support for the real economy. Concurrently, the PBC will encourage commercial banks to facilitate over-the-counter sales and transactions of treasury and local government bonds. They will also provide bilateral quotations to customers selling long-term bonds to ensure the ease of selling off these bonds at any time and increase the range of financial products featuring security, profitability, and liquidity available for choice. Thank you.

CCTV:

On June 30, the PBC decided to raise the quotas for re-lending and additional subsidized loans to support agriculture and small enterprises by a total of 200 billion yuan to ramp up financial support for agriculture, rural areas, and farmers, small and micro businesses, and private enterprises. Since the beginning of this year, what measures have been taken to provide financial support for small and micro businesses and private enterprises? How effective have these measures been? Thank you.

Zou Lan:

I will take your questions. Since the start of this year, the PBC has resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council. We have fully grasped the guiding principles of the 20th CPC National Congress and the Central Economic Work Conference. In doing so, we have earnestly worked to implement the commitment to consolidating and developing the public sector while also encouraging, supporting, and guiding the development of the non-public sector. Our top priority has been to provide financial support for the development of micro and small businesses and private enterprises, which has yielded positive results.

First, the PBC has employed a variety of policy instruments to fully support the development of micro and small businesses and private enterprises. The PBC has continued to augment support for re-lending. On June 30, the PBC increased the quotas for re-lending and additional subsidized loans to support agriculture and small enterprises by a total of 200 billion yuan. The PBC has continued to leverage instruments to support inclusive loans to micro and small businesses (MSBs), providing locally incorporated financial institutions with 39.8 billion yuan in funds and increasing inclusive MSB loans by 2.2 trillion yuan. Recently, the PBC has extended the term for the implementation of instruments to support inclusive loans to micro and small businesses from the end of June this year to the end of 2024, and made some improvements and adjustments, continuing to encourage banks to support the financing of micro and small businesses.  

Second, the PBC has continued to implement the project to enhance its capacity to provide financial services for micro, small and medium enterprises (MSMEs). The PBC has guided financial institutions to optimize their resource allocation and internal policy arrangements, enhanced technological applications, and advanced the establishment of a sustainable mechanism for promoting the confidence, willingness, ability, and professionalism of banks in issuing loans. Currently, national commercial banks offer a discount of no less than 0.5% in funds transfer pricing for MSB loans, and the weight of inclusive finance in the integrated performance evaluation of the branches and subsidiaries of banks is no less than 10%.

Third, the PBC has opened up diversified financing channels to ensure that enterprises have easier access to financing. The PBC has promoted the CRC Receivables Financing Service Platform and supported MSMEs to secure funds 28,000 times from January to June this year, amounting to 863.6 billion yuan. It has actively leveraged the functions of the supply chain bill platform to support enterprises in obtaining financing through bank discounting from January to June this year, amounting to 12.8 billion yuan. The PBC has upgraded and expanded the instruments for supporting bond financing for private businesses and has supported private enterprises to issue bonds totaling 28.4 billion yuan since the expansion was launched in November 2022. The PBC has increased the sources of credit support for small businesses from banks and, from January to June, has supported commercial banks to issue special financial bonds worth 124 billion yuan for MSBs.

Through the joint efforts of all parties, the financing of micro and small businesses and private enterprises has seen increases in volume, expanded coverage, and reduced prices. As of the end of June 2023, the outstanding inclusive MSB loans reached 27.7 trillion yuan, marking a year-on-year increase of 26%. A total of 59.35 million MSBs received these inclusive loans, reflecting a year-on-year increase of 13.3%. In May, the weighted average interest rate for newly issued inclusive MSB loans was 4.57%, marking a relatively low historical level. 

Next, the PBC will thoroughly study and implement the guiding principles of the 20th CPC National Congress. We will resolutely work to consolidate and develop the public sector while encouraging, supporting, and guiding the development of the non-public sector. We will continue to do a good job in providing financial support for the development of micro and small businesses and private enterprises. On one hand, the PBC will continue to promote the implementation of instruments supporting inclusive MSB loans, leverage the role of re-lending for small businesses, and guide financial institutions to expand loans to micro and small businesses and private enterprises. On the other hand, we will further carry out the project to enhance the capacity to provide financial services for MSMEs, continue to strengthen synergy among relevant departments, and improve supporting mechanisms for sharing enterprise credit information and financing guarantees. This will enhance the willingness, ability, and sustainability of financial institutions to provide services for micro and small businesses and private enterprises.

Thank you!

CNBC: 

How is the demand for loans from real estate developers? In particular, how has the demand been affected following the introduction of the policy extending support for the stable and healthy development of the real estate market?

Zou Lan:

As you all know, some real estate developers long operated under the conditions of "high leverage, high debt, and high turnover." Unlimited expansion of assets in terms of land, ongoing construction projects, and a diverse range of operational assets has resulted in high levels of debt. When we break down the sources of their debts, we find that nearly 70% comes from advanced personal housing payments and project funding from upstream and downstream enterprises. Financial liabilities only account for 31%, with less than half of this constituted by bank loans.

In terms of the real estate credit structure of banks, the outstanding real estate loans stand at over 50 trillion yuan, with outstanding individual housing loans approaching 40 trillion yuan. Most people purchase homes for personal use and depend on household incomes to repay their loans monthly, with the non-performing loan ratio remaining consistently below 0.5%. Regarding individual housing loans for pre-sold homes with delayed delivery, due to existing laws, priority is given to safeguarding the interests of homebuyers. These loans might face certain risks, but they constitute a relatively small proportion of the total amount and their risks are under control. Outstanding real estate development loans amount to about 13 trillion yuan, among which the outstanding property development and government-subsidized housing development loans reach approximately 6 trillion yuan and their repayment is ensured. The loans to real estate developers amount to about 6 to 7 trillion yuan. As some of these real estate developers encounter financial problems, the non-performing loan ratio has increased slightly, but the loans to real estate enterprises account for a very small proportion of total bank loans.

Since the latter half of 2021, in accordance with the arrangements of the Party Central Committee and the State Council, financial authorities have collaborated with relevant departments to provide stronger support for the timely delivery of pre-sold homes. They have maintained stability in major financing channels for real estate enterprises and accelerated efforts to defuse risks in the real estate sector.

First, financial authorities have ramped up financial support to ensure the timely delivery of pre-sold homes, providing two batches of special loans totaling 350 billion yuan. They've established a program that offers special loans worth 200 billion yuan to ensure the timely completion of pre-sold housing projects. In addition, they guided commercial banks to proactively provide supporting financing to effectively drive the resumption of construction for local projects.

Second, financial authorities have maintained the stability of major financing channels such as bonds and equity. Since November last year, we have utilized the instruments for supporting bond financing for private businesses, providing credit enhancement support for private real estate enterprises to issue bonds totaling 26 billion yuan. Since the China Securities Regulatory Commission optimized policies for real estate enterprises to go public, numerous enterprises have benefitted from equity financing support.

Third, financial authorities have spearheaded the transformation and development of the real estate sector. The PBC and the National Administration of Financial Regulation have formulated the "Opinions on Financial Support for the Development of the Housing Rental Market," providing diversified, full-life-cycle financial services for home rentals. Financial authorities have taken steady strides in advancing the 100 billion yuan special loan program to support home rentals, and have piloted the program in cities including Jinan and Zhengzhou.

The real estate market has shown a stable trend since the beginning of this year, but it will still take some time to gradually digest the risks accumulated by some real estate companies. Given the current situation in the real estate market, the PBC and the National Financial Regulatory Administration recently issued a joint notice, extending the expiration dates of two policies with applicable periods in the "16 Financial Measures" to the end of December 2024. This aims to guide financial institutions to continue providing refinancing to real estate enterprises and to increase financial support for project completion and delivery. Simultaneously, to meet the needs of completing and delivering projects, the deadline for the 200 billion yuan loan support plan has been extended to the end of May 2024.

Next, the PBC will thoroughly implement the decisions and arrangements made by the CPC Central Committee and the State Council. We will adhere to the principle that "houses are for living in, not for speculation," and cooperate with relevant departments and local governments to solidly carry out the work of completing and delivering housing projects, ensuring people's livelihoods and maintaining stability. We will meet the reasonable financing needs of the industry, and continue to create a favorable financial environment for the orderly disposal of industry risks. Given the profound changes in the supply-demand relationship in China's real estate market, there is marginal room for optimizing the policies introduced during the past's long-term overheating stage. The financial sector will actively cooperate with relevant departments to strengthen policy research, adopt targeted measures based on different cities, improve policy precision, better support people's demand for buying their first home or improving their housing situation, and promote stable and healthy real estate market development. Thank you!

Southern Metropolis Daily:

The PBC recently released data on the scale of social financing in the first half of 2023. Could you please explain the characteristics of the current structure of social financing? Thank you.

Ruan Jianhong:

Thank you for the question. As of the end of June, the balance of the social financing scale stood at 365.45 trillion yuan, marking a year-on-year increase of 9%. This is a 0.5 percentage point lower than the end of the previous month and 1.9 percentage points lower than the same period last year. In the first half of the year, the increase in the social financing scale was 21.55 trillion yuan, which is 475.4 billion yuan more than the same period last year. From a structural perspective, we can observe the following characteristics:

First, there has been a surge in RMB loans issued to the real economy. In the first half of the year, RMB loans issued to the real economy increased by 15.6 trillion yuan, a rise of 1.99 trillion yuan compared to the same period last year.

Second, off-balance sheet financing has recovered, with significant increases in trust loans and undiscounted bank acceptance bills. In the first half of the year, off-balance-sheet financing rose by 182.3 billion yuan, an increase of 739.6 billion yuan compared to the same period last year. Among them, trust loans grew by 22.8 billion yuan, and undiscounted bank acceptance bills increased by 85.2 billion yuan, a rise of 398 billion yuan and 261.9 billion yuan, respectively, compared to the same period last year.

Third, there has been a decrease in net financing for government bonds. In the first half of this year, net financing for government bonds stood at 3.38 trillion yuan, a decrease of 1.27 trillion yuan compared to the same period last year. Among these, net financing for national bonds was 930.5 billion yuan, an increase of 303.7 billion yuan compared to the same period last year, whereas net financing for local government bonds was 2.45 trillion yuan, a decrease of 1.58 trillion yuan compared to the same period last year. The decrease in net financing for local government bonds is primarily related to the pace of issuance. The issuance of local government bonds was faster during the same period last year, thus resulting in a higher base.

Fourth, there has been a significant decrease in direct financing by enterprises, primarily due to a drop in net financing for corporate bonds. In the first half of the year, net financing for corporate bonds was 1.17 trillion yuan, a decrease of 788.3 billion yuan compared to the same period last year. Meanwhile, domestic stock financing for non-financial enterprises amounted to 459.6 billion yuan, a decrease of 43.2 billion yuan compared to the same period the previous year. However, a marginal improvement in market financing was observed in June. In that month, net financing for corporate bonds was 222.1 billion yuan, a decrease of 12.5 billion yuan compared to the same period last year. The extent of the reduction was notably reduced. At the same time, domestic stock financing for non-financial enterprises reached 70 billion yuan, showing an increase of 11.1 billion yuan compared to the same period last year. Thank you.

Bloomberg:

I have two questions. What's your outlook on the currency? We've seen stronger than expected yuan fixing since late June. Has China reintroduced the counter-cyclical factor again and is the PBC going to use other tools like cutting the FX RRR to prevent wild swings in the currency? Secondly, will you take more steps to address the ongoing weakness in the property market? If yes, what specific steps? Will this focus on city level policies or broader macro level policies? And just quickly, deputy governor Liu, you just said it's common wisdom that the economy will take one year to recover from the pandemic and we're only half a year in. That seems a lot more pessimistic than how the government was talking about the economy in March at the NPC or since then. Is it the common wisdom of the PBC that recovery will take another six months? Thank you. 

Liu Guoqiang:

Thank you for the questions. Let me answer your last question first. Generally speaking, there is an economic recovery process following a pandemic, but it varies from country to country. From China's perspective, the post-pandemic recovery has been relatively robust, although certain adjustments and adaptation processes are still ongoing. Hence, it is quite typical to observe fluctuations in certain indicators. Nonetheless, the trend is positive. I am highly confident and certain about this. As previously stated, our financial indicators aptly illustrate this situation.

Regarding the exchange rate, the RMB has experienced some fluctuations lately, and there's widespread interest in its changes and future trends. We have repeatedly reiterated that the exchange rate is neutral and cannot be manipulated arbitrarily. Doing so would yield no benefits and could potentially harm both us and others. The long-term trend of the RMB exchange rate hinges on the economy's fundamentals, whereas its short-term trend is unpredictable. Taking a comprehensive view of both the long and short terms, China is a large open economy, and various factors influence the exchange rate, leading it to appreciate or depreciate. However, it will not deviate excessively in either direction. Over the past few years, the RMB exchange rate against the U.S. dollar has broken the "7" threshold three times and subsequently returned to within "7" three times. Recently, the RMB has broken the "7" mark against the U.S. dollar for the fourth time since 2019. Yet, as you can see, it has already begun to rebound considerably in the past few days. China is both a major exporter and importer. The saying "no sweetness at both ends of the sugar cane" illustrates that an excessively high or low exchange rate is not beneficial. China operates a market-based, managed floating exchange rate system guided by market supply and demand and referencing a basket of currencies. This mechanism is effective and should continue to be maintained. In other words, the exchange rate is primarily market-determined, with both market and governmental interventions playing their respective roles, resolutely avoiding excessive exchange rate fluctuations.

Currently, although the RMB exchange rate has depreciated to some extent, it has not deviated from the fundamentals. The PBC has also implemented comprehensive measures to manage expectations. The foreign exchange market is operating stably, and the actions of financial institutions, enterprises, and residents regarding foreign exchange transactions are rational and orderly. Market expectations are generally stable. As the saying goes, the current foreign exchange market has neither "big mothers" nor "whales." From the perspective of the macroeconomic situation, the fundamentals for China's long-term positive economic development have not changed. With smooth economic cycles and breakthroughs in high-quality development, China's overall economic performance will continue to improve. From the perspective of the international balance of payments, China's current account surplus is maintained at a moderate level of around 2%, and cross-border capital flows are essentially balanced. Recently, overseas funds have continued to flow into domestic bonds. From the perspective of reserve holdings, China's foreign exchange reserves are ample, and the balance remains the world's largest, exceeding 3 trillion U.S. dollars. Overall, with these "three balances" as support and with the market-oriented exchange rate formation mechanism, the RMB exchange rate will not experience a "one-way market" but will continue to exhibit two-way fluctuations and dynamic equilibrium.

Ensuring that the RMB exchange rate is kept generally stable at an adaptive, balanced level is the policy goal, and also what we expect to happen. The PBC has gained a lot of experience dealing with external shocks in recent years, and has ample policy tools. As such, we are committed and will not be hands off. We have the confidence as well as the conditions and capability to deal with any shocks and maintain the stability of the foreign exchange market. We will make use of policy tools in a reasonable manner according to circumstances. Policy tools are meant to be used, and we will use them if and when necessary. We must be guided by realities when deciding which policy tool will be adopted.

Going forward, the PBC will follow the deployments made by the CPC Central Committee and the State Council, and remain committed to ensuring that the RMB exchange rate is kept generally stable at an adaptive, balanced level. We will take the management of market expectations as our priority, and adopt a holistic approach to stabilize expectations. We will correct pro-cyclical and one-sided market behaviors when necessary to prevent drastic swings in the exchange rate. 

I'd like to invite Mr. Zou to share more information regarding the question about the real estate market.

Zou Lan:

I spoke about the policy adoption and future plans regarding the real estate market during my answer to an earlier question. Now, I'd like to share some more information about real estate credit in the first half of the year. 

The PBC, following deployments made by the CPC Central Committee and the State Council, has worked with relevant departments and local governments to step up efforts on both the demand and supply sides, in order to stabilize the property market. The property market showed stable development in the first half of the year. Real estate has gradually moved to regular operation since April, as the pent-up housing demand of consumers was unleashed at a faster pace in the first quarter, as well as under the influence of seasonal factors. Credit data from the real estate sector also shows such development of the real estate market. 

Real estate development loans have been mainly issued for housing projects, which are usually issued at the beginning of a project, and repaid when the project is completed. The outstanding loans are correlated to commercial housing projects under construction. Developers used to repay the loans with prepayments coming from sales. With increasingly restrictive non-financial liabilities since last year, demand for development loans has increased remarkably. Commercial banks have therefore increased their issuance of development loans. More than 420 billion yuan of development loans was issued in the first half of the year, an increase of 200 billion yuan year on year. This allows developers to complete their projects at a faster pace, and also ensures the delivery of projects. 

Issuance of loans to individual homebuyers correlates with the sales of commercial housing in the same period, while repayment depends on the income of borrowers or the adjustment of other assets. China issued 3.5 trillion yuan in individual housing loans during the first half of the year, an increase of more than 510 billion yuan compared with the level of the same period of last year. It has offered greater support for housing sales, but statistical data shows that the amount of outstanding loans to individual homebuyers is slightly smaller. This is due to the fact that the relation between yield rates of wealth management and interest rates of housing mortgages has changed, and more residents, therefore, decided to use their deposit or reduce other investments to pay off their mortgages early. However, such circumstances do not affect the demand for housing, instead it is actually a kind of adjustment of residents' allocation of assets. The loan prime rate (LPR) fell by 0.45 percentage point, but the margin of mortgage rate rises is fixed for the duration of a contract, leaving those mortgages rates for existing housing issued over the past few years at high levels. This leads to the remarkable increase in early repayment of loans, which has affected the income of commercial banks. We support and encourage commercial banks to alter contract agreements with borrowers through independent consultation, or replace the existing loans with new ones. All of these should be in line with market rules and laws. 

Thank you. 

Yicai.com:

Given the economic recovery, could you please share some more details regarding the monetary policies that the PBC will adopt in the coming period? Is there any room for further reserve requirement ratio (RRR) reduction and interest cuts? Also, will the PBC adopt new structural monetary policies? Thank you. 

Zou Lan:

Mr. Liu has actually already introduced some general information regarding your questions. I'd like to add some more information in this regard. 

China's economy is still on track for recovery after the adjustment of the pandemic prevention and control measures. The real economy is a dynamic circular system in terms of production, distribution, circulation and consumption, so the recovery of such a system requires some time, just as Mr. Liu has said. But we should be confident and patient for this. Moreover, the internal power of the economy is still a little weak, as the country is currently in an important period of economic recovery, transformation and upgrading, where the role of the old growth drivers, such as real estate and infrastructure, are weakening, while the new growth drivers, including sci-tech innovation, green development and modern industrial systems, are gathering momentum. As such, perception of the economic outlook may vary when it comes to different market entities. 

Since the beginning of the year, a prudent, targeted and effective monetary policy has supported the economic recovery. Just now, Mr. Liu has elaborated on economic aggregation, price levels and structures. In general, during recent years, China has upheld a prudent and normal monetary policy and therefore has ample policy space and rich policy tools to meet new challenges and changes. Going forward, according to economic development and price levels, as well as decisions and plans made by the CPC Central Committee and the State Council, the PBC will enhance macro regulation, and ensure a prudent, targeted and effective monetary policy. By leveraging various monetary policy tools including required reserve ratio, medium-term lending facility and open market operations, the PBC will maintain reasonably ample liquidity of the banking system, maintain appropriate increases of monetary credit, and advance a steady decrease of lending costs for enterprises and individuals. 

Meanwhile, the PBC will continue to give full play to the guiding role of structural monetary policies. The PBC will ensure the implementation of 200-billion-yuan increased relending and rediscount quota for the agriculture sector and small enterprises, continue to prolong instruments to support inclusive loans to micro and small enterprises (MSEs), instruments to lower carbon emission, as well as targeted relending for clean, efficient coal use, so as to strengthen efforts to support major sectors such as MSEs and green development. We will implement an action plan to support financing for technology-based enterprises, and increase efforts to support technological innovation. Loan programs to support the delivery of pre-sold housing projects will be continued. We will further advance targeted lending for real estate enterprises to solve their difficulties, as well as rental housing loan support plans, so as to promote steady and healthy development of the real estate market. For policy tools whose implementation periods have expired, the existing balance will continue to be effective. We will maintain support of the banking industry for relevant sectors, and create new policy tools if necessary, in a bid to provide targeted financial support for key areas and weak links in the stage of high-quality development. Thank you.

Xing Huina:

Due to the limited time, we will have the last two questions. 

21st Century Business Herald:

Recently, a State Council executive meeting deliberated and adopted an action plan to support financing for technology-based enterprises. What are the measures to support financing for technology-based enterprises and what progress has been made so far? Thank you. 

Liu Guoqiang:

I will answer these questions, thank you. Currently, the Chinese economy has entered a new development stage, where technological innovation serves as strategic support for implementing the new development philosophy and fostering a new development pattern. Financial regulatory departments including the PBC have earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council, prioritized providing sound financial services for technological innovation, continued to advance construction of markets and mechanisms, enriched financial support tools and methods, and channeled more financing support to technology-based enterprises. China's loans to technology-based enterprises have maintained a high growth rate and the quality and efficacy of loan services have improved significantly. By the end of June 2023, outstanding loans for specialized and sophisticated SMEs that produce new and unique products amounted to 2.72 trillion yuan, up 459.8 billion yuan, representing a growth rate of 20.4% year on year, and maintaining a growth rate of over 20% for 14 consecutive months. The weighted average interest rate of outstanding loans was 4.09%, down 39 basis points year on year. The outstanding loans for technology-based SMEs totaled 2.36 trillion yuan, up 472.7 billion yuan year on year, with a growth rate of 25.1%. The weighted average interest rate of the outstanding loans was 4.5%, down 39 basis points year on year. 

Going forward, the PBC will work with relevant departments to implement the deployment and requirements of the CPC Central Committee and the State Council, further enrich monetary tools, develop the financial market and improve support policies, in a bid to channel more financial resources to technology-based enterprises, and provide targeted, high-quality and effective financial services for such enterprises. The focuses will be in the following areas: 

First, we will increase credit services ability for the technological field. We will guide development and policy banks to focus on their main responsibilities and businesses and increase their efforts to serve the national strategy for technological innovation. We will encourage commercial banks to further increase loan extensions for technology-based enterprises. With a focus on constructing a professional risk evaluation system, we will optimize mechanisms for performance assessment and due diligence exemption, as well as improve organizational structures and product services that meet financing needs of technology-based enterprises.

Second, we will improve the direct financing ability of the multi-level capital market. In the bond market, we will further enrich bond products, enhance market cultivation and expand the issuance of bonds for technology-based enterprises. As for equity financing market, we will leverage the role of government investment funds in supporting the financing of technology-based enterprises, expand sources of funds and exit channels for venture capital and private equity investments, and strengthen middle and long-term capital supply for technology-based enterprises in their early stages. 

Third, we will promote the risk-sharing role of insurance and financing guarantee institutions. Relevant departments will be encouraged to innovate business forms for guaranteeing financing for technology-based enterprises. Pilot policies will be fine-tuned regarding insurance compensation mechanisms for trial application of first major technological equipment and first batch of key new materials. The supply of technological insurance products will be enhanced to share and disperse risks in innovation and entrepreneurship. 

Fourth, we will enhance the external financial support for technological innovation. We will support technology-based enterprises in raising funds through international capital markets under the prerequisite of ensuring safety and compliance. We will build a regular mechanism for responding to the financing needs of technology-based enterprises, and promote sharing of public technological information, and advance the pilot program for the financial reform of technological innovation in a steady and orderly manner. 

Fifth, we will coordinate financial support of technological innovation with preventing financial risks. We will urge financial institutions to strengthen their risk management practices and promote a sound internal risk control mechanism for government investment funds. We will promote the role of the market in regulating financing of technology-based enterprises such as bond credit rating and intellectual property valuation, to avoid hasty investments and accumulated risks. Thank you. 

Xing Huina:

The last question.

Securities Times:

Earlier, a lot of information has been presented regarding the real estate market. I would like to ask the PBC to provide an overview of the financing of the real estate industry in the first half of the year, as well as the current status of real estate credit supply and early repayment of mortgage loans. Thank you. 

Zou Lan:

The relevant information has already been explained quite clearly. Ms. Ruan has introduced the general situation regarding real estate loans. While outstanding loans are often mentioned in statistics, the support for real estate market loans is more evident in loan issuance data. The issuance of property development loans increased by around 200 billion yuan year on year, and personal housing loans have increased by more than 510 billion yuan year on year. As for early repayment of mortgage loans, there has been a substantial increase due to interest rate considerations, which is expected to continue for a quite long time. Although the issuance of loans has maintained a significant growth rate, the early prepayment of loans is also increasing. Judging only from the number of outstanding loans may lead to the misconception that credit issuance is insufficient. However, it is crucial to analyze the data structure when studying the current situation. 

Regarding early prepayment of mortgage loans, as I mentioned, 99% of housing mortgage loans are in line with a floating interest rate mechanism. On the basis of the loan prime rate, a spread is determined based on market conditions at the time of contract signing. The spread is fixed during contract periods, be it a 20- or 30-year contract. We announce the loan prime rate periodically, which are sometimes lower or higher. Since last year, the loan prime rate has declined by 45 basis points. Therefore, according to contracts, interest rates of loans have automatically decreased by 0.45 percentage point. However, the spread is fixed. That is why people may find that interest rates of loans issued in previous years are higher than those of recently issued loans. The early repayment of mortgage loans is not driven by one single factor, but also by other elements such as investment yields. The practice of breaking the rigid redemption of investment products and some cases of trading below net asset value at the end of last year prompted people to adjust their allocation of assets, as they perceived it to be more beneficial. Deposits, and especially fixed-term deposits, have been increasing. Families weigh up their choices, and a lot of people choose to make early mortgage repayment. Though the support in credit issuance has increased further, the impact on outstanding loan balances remains relatively small. Thank you. 

Xing Huina:

That concludes today's press conference. Thank you to all the speakers and friends from the media. 

Translated and edited by Zhu Bochen, Wang Qian, Zhang Rui, Huang Shan, Xu Kailin, Xiang Bin, Wang Yiming, Gong Yingchun, Zhou Jing, Liu Jianing, Li Huiru, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speaker:

Lyu Daliang, spokesperson of the General Administration of Customs of China (GACC) and director general of the Department of Statistics and Analysis of the GACC

Chairperson:

Xie Yingjun, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 13, 2023

Xie Yingjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are joined by Mr. Lyu Daliang, spokesperson of the General Administration of Customs of China (GACC) and director general of the Department of Statistics and Analysis of the GACC, who will brief you on China's import and export performance in the first half of 2023 and answer your questions.

Now, I'll give the floor to Mr. Lyu for a brief introduction.

Lyu Daliang:

Ladies and gentlemen, friends from the media, good morning. Thank you for attending today's press conference despite the rain. It's a great pleasure to meet you again. I will begin by introducing China's import and export performance in the first half of this year and then answer your questions.

In the first half of this year, in the face of a complex and severe external environment, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China adhered to the general principle of pursuing progress while ensuring stability and pursued high-quality development. The overall economic performance is witnessing a recovery and improvement, and the quality of foreign trade is steadily improving in line with our expectations. According to statistics from the GACC, China's total goods imports and exports expanded 2.1% year on year to 20.1 trillion yuan (about $2.81 trillion). Exports accounted for 11.46 trillion yuan, showing a 3.7% year-on-year growth, while imports totaled 8.64 trillion yuan, indicating a decrease of 0.1% year on year. Specifically, there were five main features which I will now outline.

First, the scale of foreign trade has grown steadily. China's goods imports and exports exceeded 20 trillion yuan in the January-June period for the first time. The goods imports and exports in the first and second quarters reached 9.76 trillion yuan and 10.34 trillion yuan, respectively, with both registering year-on-year growth. Imports and exports recorded in the second quarter were 6% higher than that of the first quarter. Both May and June registered 1.2% month-on-month increases.

Second, the import and export scale of private enterprises continued to expand. In the first half of the year, China's private enterprises recorded imports and exports worth 10.59 trillion yuan, representing 8.9% year-on-year growth. This accounted for 52.7% of the country's total, marking a 3.3 percentage point rise over the previous year. During the same period, foreign-invested enterprises conducted imports and exports worth 6.16 trillion yuan, while state-owned enterprises engaged in imports and exports worth 3.29 trillion yuan, accounting for 30.7% and 16.4% of the country's total, respectively.

Third, the growth rate of imports and exports related to the Belt and Road Initiative (BRI) exceeded that of overall trade. In the first half of this year, the total value of China's imports and exports with the Association of Southeast Asian Nations (ASEAN), the country's largest trading partner, reached 3.08 trillion yuan, marking a 5.4% year-on-year increase and accounting for 15.3% of the total. Imports and exports with the European Union amounted to 2.75 trillion yuan, reflecting a 1.9% increase and accounting for 13.7% of the total. The country's trade in goods with the United States declined 8.4% year on year to 2.25 trillion yuan, accounting for 11.2% of China's total. Meanwhile, during the same period, China's trade in goods with countries along the Belt and Road jumped 9.8% year on year in the first half of the year, 7.7 percentage points higher than the country's overall trade growth and accounting for 34.3% of the total, achieving a year-on-year increase of 2.4 percentage points. Additionally, the value of China's trade in goods with other members of the Regional Comprehensive Economic Partnership (RCEP) rose 1.5% year on year.

Fourth, there has been a notable rise in the proportion of exports in the mechanical and electrical products sector. In the first half of this year, China's exports of mechanical and electrical products reached 6.66 trillion yuan, representing a 6.3% year-on-year increase and accounting for 58.2% of the total export value, a 1.4 percentage point increase compared to the previous year. Among these, the exports of electrical equipment, automobiles and their spare parts, and general mechanical equipment amounted to 636.06 billion yuan, 621.19 billion yuan and 200.44 billion yuan, respectively, marking increases of 27.7%, 58.5% and 12.2%, respectively. Concurrently, the export of labor-intensive products reached 1.97 trillion yuan, indicating an increase of 0.04%. Notably, the exports of clothing and clothing accessories, plastic products, and shoes and boots amounted to 516.94 billion yuan, 343.42 billion yuan and 172.93 billion yuan, respectively, reflecting increases of 0.7%, 3.2% and 0.4%, respectively.

Fifth, there has been rapid growth in the import of bulk commodities and consumer goods. In the first half of this year, China's imports of bulk commodities such as energy, mineral ores and grain witnessed a significant increase of 17.1% year on year. Specifically, imports of energy products, including crude oil, natural gas and coal, reached 561 million metric tons, marking an increase of 33.2%. Additionally, imports of iron, aluminum and other metal ores amounted to 710 million metric tons, reflecting an 8.3% increase. During the same period, imported consumer goods amounted to 974.84 billion yuan, demonstrating a growth rate of 6.6%. Notably, the imports of meat and edible aquatic products experienced increases of 9.5% and 30%, respectively.

Overall, in the first half of the year, China's foreign trade achieved new breakthroughs in terms of scale, while the structure was newly optimized, showcasing strong resilience. At present, the global economy's recovery is sluggish, with global trade and investment experiencing deceleration. Risks such as unilateralism, protectionism and geopolitics are on the rise, and the direct impact of weakened foreign demand on China's foreign trade continues to persist. However, it is crucial to recognize that China's economy has strong resilience and huge potential, and its long-term sound fundamentals remain unchanged. With the ongoing enhancement of China's economic performance, the implementation of pragmatic and effective measures, and the reinforcement of the vigor of foreign trade operators, we believe that we can achieve the goal of steadily improving the scale and quality of foreign trade.

Next, following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the GACC will comprehensively study, understand and implement the guiding principles of the 20th CPC National Congress and resolutely implement the decisions and plans of the CPC Central Committee and the State Council. Adhering to the general principle of pursuing progress while ensuring stability, we will fully and faithfully apply the new development philosophy on all fronts and effectively carry out themed activities. By speeding up the construction of smart customs, we will strive to contribute to the great cause of building China into a great country. We will also continue to implement all work to steadily improve the scale and structure of foreign trade, make efforts to safeguard borders and advance development, and contribute to fostering a new development pattern, promoting high-quality development, and comprehensively advancing Chinese modernization. 

Next, I would like to answer the questions that concern you. Thank you.

Xie Yingjun:

Now you are welcome to raise questions. Please identify the news organization you represent before asking your questions.

CCTV:

Just now, you gave an introduction to the foreign trade data for the first half of the year. What's your view on the overall performance of China's foreign trade in H1? What were the highlights and positive changes during this period? And what are your expectations for H2? Thank you.

Lyu Daliang:

Thank you for your questions. In the first half of 2023, global economic recovery remained sluggish, the spillover effects of contractionary policies adopted by major developed economies were becoming more evident, and various factors increased instability and uncertainty in the international market. Under the strong leadership of the CPC Central Committee with comrade Xi Jinping at its core, China's economic performance picked up on the whole. We faced up to that pressure and steadily improved the scale and quality of foreign trade. The overall performance met the projected target. In specific, there are positive changes in three aspects:

First, China's foreign trade vitality became stronger. In H1, there were 540,000 foreign trade enterprises in China involved in exports and imports, an increase of 6.9% year on year. Among them, the number of private enterprises rose by 8.3%, most of which were micro, small, and medium-sized enterprises full of vitality. The foreign trade entities showed more business dynamism. During the same period, private enterprises, a main contributor to China's foreign trade, witnessed a growth rate that was 6.8 percentage points higher than the foreign trade in total. Their combined value represented 52.7% of the country's total and drove the overall foreign trade growth by 4.4 percentage points.

Second, China's foreign trade structure improved. In terms of trade methods, general trade, which involves longer industrial chains and higher added value, recorded a higher growth rate than foreign trade in total. The value of general trade accounted for 65.5% of the country's total, up by 1.2 percentage points. All these show that our capability of independent development of trade has been steadily strengthened. In terms of regional distribution, the central and western regions and the three northeastern provinces accelerated the pace of opening up, with their imports and exports in H1 increasing by 2.8% and 4.5%, respectively, 0.7 and 2.4 percentage points higher than the country's overall growth. Their combined value accounted for 21% of the country's total, achieving a more balanced regional development.

Third, new drives for foreign trade were generated. Faced with the pressure on foreign trade, China has made great efforts to explore emerging markets, build platforms for high-standard opening up, and cultivate and expand competitive industries so as to constantly generate new drives for foreign trade. In H1, China's trade with countries along the Belt and Road jumped nearly 10% year on year. The total value accounted for 34.3% of the country's total. During the same period, China's trade with Latin America and Africa rose 7% and 10.5%, respectively, from a year earlier. All these show that Chinese enterprises are diversifying their markets overseas. The imports and exports of pilot free trade zones and the Hainan Free Trade Port grew by 8.6% and 26.4%, respectively, fully leveraging their role as platforms for opening up. The total export value of China's "Three New Flagship products" – electric vehicles, lithium-ion batteries and solar batteries – soared 61.6%. Together they contributed 1.8 percentage points to the overall export growth, showing the great dynamics of China's green industry.

As for foreign trade in the second half of this year, we feel both pressure and confidence. At present, inflation in major developed economies remains high, geopolitical conflicts persist, and short-term external demand recovery is insufficient. We are still facing much pressure to maintain stable growth of foreign trade. But at the same time, we should also see that the fundamentals of the Chinese economy, characterized by strong resilience, enormous potential, and long-term sustainability, remain unchanged. As a series of policies and measures continue to take effect, we have the confidence, the foundation, and the conditions to achieve the goal of stabilizing and improving the quality of imports and exports. Thank you. 

China News Service:

We noticed that the growth rate of foreign trade has dropped significantly in the recent two months, with negative growth in exports. How do you see this change? Thank you. 

Lyu Daliang:

Thank you for your question. We noticed that people have paid attention to the recent changes in the year-on-year growth rate of foreign trade and there are also some voices of concern on the internet. We believe that the development of China's foreign trade remains stable on the whole. Although the year-on-year growth has slowed its pace, the month-on-month growth rate has increased steadily. China's foreign trade has increased in the second quarter compared with the first quarter. Month-on-month growth was also recorded for the last two consecutive months. So there are foundations for the stable development. Meanwhile, the stable development is also reflected in the following aspects:

First, in terms of scale, China's foreign trade has maintained growth, and it has grown significantly. The country's foreign trade has maintained growth in the first half of the year, with its scale hitting a new high of 20.1 trillion yuan (about 2.81 trillion U.S. dollars). It is the first time China's goods imports and exports exceeded 20 trillion yuan in the January-June period, which is a landmark new breakthrough. The breakthrough has been achieved amid a complicated, grim external environment, the slowdown in global trade and investment, and fading driving factors, such as anti-epidemic supplies and stay-at-home economy products. This is really not easy. The total value of China's imports and exports increased by more than 400 billion yuan year on year in the first half of this year, which is equivalent to the total value of over 3 million vehicles exported from the country throughout last year.

Second, in terms of the foundation, China's foreign trade has increased in volume and enjoyed more solid growth. Price and volume are two apparent factors that affect the scale of foreign trade. According to calculations, both China's imports and exports have decreased compared with the same period last year. In the second quarter, the imports and exports have both increased compared with the same period last year, with imports growing 5.9% and exports growing 2%. Imports of energy products and exports of automobiles grew by more than double digits year-on-year. The increase in trade volume has led to the growth of trade scale, which means that the country's foreign trade has a solid foundation and has enjoyed real growth. 

Third, the advantage of China's foreign trade has consolidated, and its proportion has increased from a global perspective. The WTO forecast that the volume of global goods trade will grow by 1.7% this year, much lower than the average of 2.6% over the past 12 years. A slowdown in the growth of world trade is a common challenge for all economies, and the difficulties are more global. Compared with those neighboring economies who have released their statistics, China's foreign trade has demonstrated its strong resilience, and its competitive edge has stabilized and strengthened. According to our calculations based on the latest WTO statistics, in the first four months, the proportion of China's exports in the international market has increased slightly, which means that the country's foreign trade has shown stronger competitiveness. 

As I just mentioned, China's foreign trade is facing pressure, fluctuations, and challenges. However, as a Chinese saying goes, "The journey ahead may be long and arduous, but we will eventually reach our destination if we keep going." The fundamentals underpinning China's long-term economic growth remain robust. China has a good industrial system and complete production capacity. The country's foreign trade has great resilience and vast room for maneuver. Meanwhile, China remains committed to opening up to the outside world and actively promotes international economic and trade cooperation. It has rolled out a series of policies and measures to stabilize foreign trade, and a combining effect has continued to emerge. So there is still a solid foundation for stabilizing the scale and improving the structure of foreign trade. We are confident that we will continue to consolidate our market share throughout 2023 to maintain our position as the world's largest trader of goods. Thank you. 

Nanfang Daily:

The GACC launched 16 initiatives to optimize the country's business environment on June 12, which have been implemented for one month. Could you brief us on the effect of these initiatives? What measures will the GACC take to stabilize the scale and improve the structure of foreign trade amid weakening external demands? Thank you. 

Lyu Daliang:

Thank you for your questions. Since the beginning of this year, the GACC has implemented the decisions and arrangements of the CPC Central Committee and the State Council for stabilizing the scale and improving the structure of foreign trade, and continued to ensure the implementation of those measures to stabilize foreign trade launched last year. Last month, we launched the 16 initiatives to optimize the country's business environment. All these efforts are aimed at further stabilizing social expectations and boosting foreign trade. 

Stabilizing business entities of foreign trade is the foundation for steady increases in both the volume and quality of imports and exports. Measures aimed at providing more convenience, enhancing vitality, improving services, and reducing costs have been included in the 16 initiatives to address those issues foreign trade enterprises are most concerned about, to help them reduce costs, stabilize orders, and expand market shares. We held a press conference on the 13th of last month to interpret the 16 initiatives in detail so that enterprises could understand and know them as early as possible.

In the past month, we have fully implemented policies and measures to ensure they benefit enterprises at a faster pace. Customs offices nationwide have introduced detailed support measures, tailored to local conditions, ensuring that 16 initiatives are effectively implemented at the grassroots level. For example, based on current information, Qingdao Customs introduced 30 specific support measures and initiated six targeted campaigns to enhance industrial upgrading, improve business environment evaluations, and assist in mitigating enterprises' difficulties while stabilizing market operations. Guangzhou Customs rolled out 20 detailed measures in five areas: enhancing the smooth operation of cross-border logistics, expanding goods imports and exports, facilitating cross-border trade, reducing companies' burdens while improving efficiency, and promoting innovative development of foreign trade. Nanjing Customs rolled out and implemented 26 detailed measures and introduced a package of supporting policy measures, such as "resolving enterprise problems," "automatic delivery of preferential policies," "support measures for technology trade," "customized benefits of free trade agreements," "one-on-one Authorized Economic Operator (AEO) guidance," and "IP protection by customs." Furthermore, customs officials at all levels were invited to the front lines to promote policies, listen to enterprise feedback, and help address their issues, thereby more effectively gathering feedback and implementing policies and measures.

A series of policy measures continue to take effect, benefiting more businesses. For example, electronic payment services for cross-border e-commerce taxes have been piloted by Huangpu Customs, Chengdu Customs, and Chongqing Customs, among others, to simplify tax payments for businesses involved in cross-border e-commerce transactions. The method for inspecting high-tech goods in vacuum packaging has been adopted nationwide. According to businesses in the Beijing Economic and Technological Development Area, customs officials conduct door-to-door inspections of imported high-tech equipment in vacuum packaging, and goods can be delivered to the factory and inspected within six hours of port arrival. Nanchang Customs actively piloted the "departure confirmation" facilitation measure. Each shipment can save at least one to two days of transit time, saving an average of about 100 yuan in logistics costs per container, according to relevant companies. Shantou Customs took the initiative in collaborating with a petrochemical company's key projects and implemented measures of import equipment such as "declaration in advance" and "inspection upon arrival." The time between inspection and release of goods by customs was shortened from days to hours.

In general, relevant policies continue to take effect, and enterprises are gaining more tangible benefits. Moving forward, we will fully leverage the advantage of customs to address enterprise concerns and continue to implement the 16 initiatives and other policies and measures to stabilize foreign trade. We will work to enhance our support measures and monitor the implementation of such measures. Furthermore, in line with the development of China's foreign trade and the practical needs of enterprises, we will further expand our policy toolkit and strive for a stable volume and improved structure of foreign trade. Thank you.

CNBC:

I have two questions. How did cross-border e-commerce imports and exports perform in the second quarter of 2023 and this June? Also, with the upgrading of China's manufacturing industry, what influence does it have on China's imports and exports to Southeast Asia? Thank you.

Lyu Daliang:

Thank you for your questions. I will first answer your question about cross-border e-commerce. In mid-June, we detailed the growth of China's cross-border e-commerce in last year at the 2023 China Langfang International Economic and Trade Fair and released relevant data. Preliminary customs statistics show that in the first half of 2023, China's cross-border e-commerce continued to showcase its strength and potential in “buying globally and selling globally.” The import and export value of cross-border e-commerce grew by 16% year on year to 1.1 trillion yuan. Exports rose by 19.9% to 821 billion yuan, and imports increased by 5.7% to 276 billion yuan, reflecting steady growth, improved structure, and enhanced competitiveness.

On this occasion, I'd like to clarify that the data sources and compilation methods for cross-border e-commerce statistics differ significantly from those used for traditional foreign trade. Currently, there is no international statistical rules on cross-border e-commerce. China is one of the first countries to develop such statistics. We have improved our statistical system and methods through multiple pilot surveys. According to the latest statistical survey system for cross-border e-commerce, we publish our statistics on a semi-annual and annual basis.

In response to your second question, the ASEAN is China's largest trading partner. In the first half of 2023, China's imports and exports to ASEAN increased by 5.4% year on year to reach 3.08 trillion yuan. This represents 15.3% of the country's total imports and exports during the same period, an increase of half a percentage point compared to the same period last year. The highlights are in three areas as follows:

First, bilateral cooperation has become closer. Since the beginning of this year, China has expanded its economic and trade cooperation with ASEAN. The second and third rounds of negotiations for version 3.0 of the China-ASEAN Free Trade Area were held in Thailand and China in April and June, respectively. The RCEP entered into force for the Philippines on June 2, 2023, marking the pact's implementation by all 15 members, and providing a significant boost to regional economic integration. In the first half of 2023, the proportion of China's imports and exports with ASEAN in its total imports and exports with other RCEP members increased to 50.5%.

Second, the role of cross-border channels has become more pronounced. According to the China State Railway Group Co., Ltd., in the first half of the year, the rail-sea intermodal trains along the New International Land-Sea Trade Corridor in western China transported a total of 424,000 TEUs of goods, a rise of 10.5%. During the same period, customs supervised and inspected a total of 2.146 million metric tons of imported and exported goods on the China-Laos Railway, up by 194.4% on a yearly basis. These two cross-border channels have continued to expand China's trade reach with ASEAN, driving rapid growth of imports and exports to ASEAN in regions along the new routes. In the first half of the year, imports and exports of regions along the routes to ASEAN reached 438.65 billion yuan, an increase of 21.4%.

Third, the scale of China's imports of agricultural products from ASEAN continues to expand. Agricultural cooperation is a key area of China-ASEAN economic and trade relations, and an increasing number of agricultural products from ASEAN countries have entered the Chinese market. In the first half of the year, China imported 125.08 billion yuan of agricultural products from ASEAN, a rise of 7.5%, which was 6.4 percentage points higher than the overall growth rate of China's imports from ASEAN. The import performance of some specific agricultural products was impressive; for example, fruit imports amounted to 40.54 billion yuan, a 24.1% increase, with fresh durian and pineapple imports rising by 65% and 24.1%, respectively. Palm oil imports reached 10.91 billion yuan, a surge of 120.5%.

As each other's largest trading partners, China and ASEAN share a solid foundation for cooperation and substantial development potential. With regional economic integration deepening, cooperation areas continuing to expand, and trade exchanges becoming closer in the future, bilateral trade is expected to continue maintaining a favorable trend. Thank you.

Phoenix TV:

We've noticed that while the global economy is relatively sluggish, the import and export data released by the GACC shows a significant difference in trend compared to various related domestic and foreign economic indicators. For instance, domestic export delivery value or foreign exchange receipts and payments, along with some foreign trade data, all exhibit substantial trend differences. I would like to ask how customs views this issue. Thank you.

Lyu Daliang:

Thank you for your question. Customs statistics are the official statistics of China's import and export goods trade. For a long time, we have strictly implemented the Customs Law, Statistics Law, Regulations on Customs Statistics, regulations on the administration of statistical work in customs, and other associated laws, regulations, and administrative rules. We also adhere to international trade statistics standards. Based on administrative records of customs declarations, we truthfully, objectively, and completely record China's foreign trade import and export activities. In other words, with the backing of the law, rules, standard statistical methods, and administrative records, these two aspects collectively provide customs statistics with full legal assurance and a robust, reliable methodological foundation.

We have also noticed some perspectives on the issue of discrepancies between different economic indicators. Various economic indicators document the process and status of China's economic development from diverse perspectives. The connotations of indicators, statistical calibers, and collection methods vary, leading to both similarities and differences.

Take the export delivery value and export value you just mentioned as examples. Even though both indicators use the term "export," they indeed differ in several ways. First, they have different statistical objects. The former primarily records the value of products that industrial enterprises above designated size self-export, entrust agencies for export, or export through foreign trade departments, while the latter captures the actual value of goods exported by all enterprises. Second, the timing of these statistics is different. The former is based on the actual sales time of industrial enterprises above designated size, while the latter is based on the date of customs clearance. In addition to some other differences, over a longer period, these two types of values generally trend together, but deviations in individual months throughout history are not uncommon.

Statistics on trade in goods in the balance of payments and statistics on customs trade in goods are indeed both important macroeconomic indicators reflecting foreign trade in goods. However, these two types of indicators do differ. First, they follow different statistical standards. The former adopts the statistical standards of the International Monetary Fund, while the latter uses U.N. standards for trade in goods. Second, they have different scopes. The former determines the scope of statistics based on whether ownership of goods has been transferred between residents and non-residents, while the latter determines the scope based on whether goods cross borders. Of course, there are some other differences. For example, take the mobile phone we use. If it's a phone sold domestically after processing with supplied materials, the former would count the total value of the domestically sold phone, while the latter would measure the value of the imported materials.

Regarding the statistical difference between China's imports and exports and its trading partners, the international trade statistics, which can theoretically verify the figures of each, are actually more complicated. Therefore, China has conducted international cooperation on trade statistics with relevant countries and regions and compared the data. This has been an important aspect of our work. In practice, most countries and regions in the world have adopted the statistical standards recommended by the United Nations, with imports calculated based on the countries (regions) of origin and exports on the countries (regions) of destination. In the case of third-party re-exports, the statistical discrepancy between the trading partner countries will lead to relatively big data differences, which is the prime reason for the disparity in bilateral trade statistics. At the same time, the difference between the price statistics also plays a role. For example, exports are calculated at FOB, and imports at CIF. In addition, exchange rate fluctuations, different statistical time, and other objective factors can also lead to statistical differences. 

It is the statutory duty of the customs authorities to compile and publish the statistics on the import and export of goods. We are continuously improving the legal base, standards, and IT application of the statistical systems and methods of the customs authorities, constantly consolidating the cornerstone of the statistical work, and ensures that the data is comprehensive, reliable, and internationally comparable so as to provide better information services for data users. Thank you. 

The Poster News APP:

China's circle of friends has constantly expanded over the recent years, and the markets have been further diversified. Could you please brief us on this respect? What have the customs authorities done in this regard? Thank you. 

Lyu Daliang:

Thank you for your question. Promoting the diversity of the trading market is an inherent requirement and a distinctive feature of China's stable trade development. Over the recent years, Chinese foreign trade enterprises have taken the initiative, responded to the changes in the international market, upheld the pioneering spirit, and broke new grounds. While stabilizing the economic and trade exchanges with developed economies, these enterprises have also expanded markets in developing countries and regions like ASEAN, making positive progress in diversifying the trading market. Just as you said that China's circle of friends is expanding, the circle of friends of China's foreign trade is also continuously expanding. 

Here are some examples. As the economic and trade cooperation between China and ASEAN goes deeper, ASEAN has remained China's largest trading partner for three consecutive years since 2020. China's trade with Latin America exceeded three trillion yuan in 2022, registering positive growth for six years in a row. Recently, the five Central Asian countries have become a new growth driver of China's foreign trade, with the growth rate of China's trade with the five countries 38 percentage points higher than the overall growth rate in the same period. Not long ago, the China-Africa Trade Index was released at the third China-Africa Economic and Trade Expo. The index climbed to 990.55 points in 2022 from a benchmark of 100 points in 2000, which has comprehensively reflected the fast development of China-Africa trade. 

Since the beginning of this year, the in-person foreign exchanges at various levels in China have been fully restored, and a number of major diplomatic events have been hosted. This has fostered a more favorable environment for developing multilateral economic and trade relations, expanding all-round economic and trade cooperation, and promoting the diversity of the trading market. In the first half of this year, China's trade with ASEAN, Latin America, Africa, and the five Central Asian countries increased by 5.4%, 7%, 10.5%, and 35.6%, respectively, year on year, all higher than the overall growth rate in the same period. 

While advancing trade diversity, the customs authorities have actively performed their responsibilities and duties and fully served national diplomacy, securing a series of positive outcomes. For example, we have actively participated in the China-Central Asia Summit and contributed to securing seven outcomes during the summit. We have helped establish a mechanism for meetings among the heads of customs of China and Central Asian countries. Ten bilateral documents were signed in the presence of President Xi Jinping and the heads of state of the five Central Asian countries, meaning that we signed bilateral documents with all attending countries during the diplomatic event at home. Under the framework of the third China-Africa Economic and Trade Expo, we hosted the China-Africa Sanitary and Phytosanitary (SPS) Cooperation Forum, where a joint statement on the SPS cooperation was issued, an information website on the SPS cooperation was launched, and agricultural and food product market access agreements were signed with representatives from Zimbabwe and Madagascar. After China and Honduras established diplomatic relations in March, China's customs authorities have actively responded to Honduras' demands for exporting agricultural products to China. In the presence of President Xi Jinping and Honduran President Iris Xiomara Castro Sarmiento, the two sides, based on a scientific assessment of risks, signed protocol documents for exporting Honduran aquaculture products, unprocessed coffee beans, fresh bananas, and other products to China. The two sides also signed two memorandums on import and export inspection and quarantine.

Going forward, Chinese customs will continue to strengthen communication and coordination with customs inspection and quarantine departments of all countries. We will deepen cooperation in areas such as further enhancing trade facilitation and optimizing the business environment at ports, and continuously smooth international supply chains. This will help China expand diversified international markets and develop pluralistic and stable international economic and trade relations. Thank you.

N Video from Nanfang Metropolis Daily:

May I ask about the trade between China and countries along the Belt and Road in the first half of this year? How do you view the prospects of China's future trade with the Belt and Road countries? What work has the Chinese customs done recently to promote trade cooperation along the Belt and Road? Thank you.

Lyu Daliang:

Thank you for your questions. In the second half of this year, the third Belt and Road Forum for International Cooperation will be held, and there is great interest in topics related to the BRI. Over the past decade since the initiative was proposed, China's imports and exports with countries along the Belt and Road have increased from 6.46 trillion yuan in 2013 to 13.76 trillion yuan in 2022, a cumulative growth of 1.1 times. This year, we have continued to experience rapid growth, with China's imports and exports with Belt and Road countries reaching 6.89 trillion yuan in the first half of the year, a year-on-year increase of 9.8%, surpassing the overall growth rate of the country's foreign trade by 7.7 percentage points. The main characteristics are as follows:

First, industrial cooperation is closer. In the first half of the year, China's exports of intermediate products to Belt and Road countries increased, such as by 39.3% for automotive components, 34.3% for lithium batteries, and 28.9% for automatic data processing equipment accessories. During the same period, imports of energy products and agricultural products from Belt and Road countries also increased by 5.7% and 17.9%, respectively.

Second, the impact of connectivity is significant. In recent years, efforts have been made to enhance connectivity through initiatives such as the China-Europe Railway Express, new land-sea transit routes for the western region, and the China-Laos railway. The level of connectivity between China and Belt and Road countries has improved significantly. In the first half of the year, China's imports and exports with Belt and Road countries via railway transportation increased by 23.8%, surpassing the overall growth rate of imports and exports with Belt and Road countries by 14 percentage points. This double-digit growth has been sustained for 12 consecutive months. Imports and exports with Belt and Road countries via road transportation increased by 63.6%, outperforming the overall growth rate by 53.8 percentage points. The growth rate has exceeded 30% for five consecutive months.

Third, the performance of the central and western regions is even more impressive. In the first half of the year, the import and export growth between the central and western regions and countries along the Belt and Road increased by 23.2%, accounting for 21.2% of the total import and export value between China and countries along the Belt and Road during the same period. This marks a 2.3 percentage points increase compared to the previous year. Among them, the three autonomous regions of Guangxi, Xinjiang, and Inner Mongolia have all experienced import and export growth rates exceeding 50% with countries along the Belt and Road.

The Chinese customs have thoroughly studied and implemented the principles outlined in the important speeches of General Secretary Xi Jinping, with a key focus on providing services for high-quality Belt and Road cooperation and vigorously promoting its implementation. This year, the following work has been actively carried out: The first aspect is the active promotion of the import of high-quality agricultural food products. In the first half of the year, 44 customs inspection and quarantine cooperation documents were signed with countries involved in the BRI, including 30 agreements on access to agricultural food products. The second aspect is the continued enhancement of trade facilitation cooperation. A memoranda of understanding on single-window document processing for international trade cooperation was signed with Iranian customs, while arrangements for Authorized Economic Operator (AEO) mutual recognition were signed with the Philippines, Costa Rica, and Uzbekistan. The third aspect is strengthening the hardware and software capabilities of ports, optimizing the information sharing and exchange platform for customs along the Belt and Road, and ensuring the stable operation of the Customs-Train Operators Partnership for Secure and Expedited Clearance of CR Express Carried Goods (C-TOP) between China and Kazakhstan. The fourth aspect is active participation in the preparations for the third Belt and Road Forum for International Cooperation and the thematic forum on trade connectivity.

Next, the customs will continue to upgrade and develop multilateral and bilateral cooperation mechanisms with countries involved in the BRI. We will vigorously promote cooperation in areas such as trade security and facilitation, inspection and quarantine. The Chinese customs will make new contributions to broadening the Belt and Road as a "path of happiness" benefiting the whole world. Thank you.

ThePaper.cn:

At the first meeting of the Central Commission for Comprehensively Deepening Reform this year, it was pointed out that supporting the development of the private economy is a consistent policy of the CPC Central Committee. Since the beginning of this year, the private economy has continued to serve as the main force in China's foreign trade. Could you please tell us about the major highlights of the private economy's imports and exports in the first half of the year? Thank you.

Lyu Daliang:

Thank you for your question. The private economy has always played an essential role in promoting China's economic development and social stability. It is characterized by the features represented by the term "Five-Six-Seven-Eight-Nine," which signifies its contributions of over 50% of tax revenue, over 60% of GDP, over 70% of technological innovation achievements, over 80% of urban employment opportunities, and over 90% of the total number of enterprises. Now, in terms of foreign trade, we can add another "Five" to this list. By 2022, the proportion of imports and exports contributed by private enterprises exceeded 50% of China's total. In the first half of this year, the share of imports and exports by private enterprises further increased to 52.7%, maintaining their position as the main force in foreign trade. Specifically, it demonstrates the following characteristics:

First, the number of enterprises and the scale of trade have shown steady growth, playing a significant role in stabilizing the overall situation. In the first half of the year, the number of private enterprises with import and export performance increased by 8.3% compared to the previous year, reaching 459,000, accounting for 85.1% of enterprises with import and export performance during the same period. Private enterprises have become a stabilizer for foreign trade, with their imports and exports totaling 10.59 trillion yuan in the first half of the year, an increase of 8.9%, driving China's foreign trade growth by 4.4 percentage points. Among the 31 provinces, autonomous regions and municipalities, 25 of them witnessed growth in the import and export value of private enterprises.

Second, efforts in innovative development have significantly paid off, and high-quality exports have made outstanding contributions. In the first half of the year, private companies exported 1.24 trillion yuan's worth of high-tech products, representing a 5.4% increase. Their share in China's total exports of high-tech products increased by 5.7 percentage points, reaching 44.7%. During the same period, private companies were the primary driving force behind the export growth of China's electric manned vehicles, lithium-ion batteries, and solar cells, with a total export value of 346.3 billion yuan, an increase of 64.6%. They contributed as much as 66.8% of China's total exports of these products. Additionally, the export value of private companies' proprietary brands reached 1.6 trillion yuan, an increase of 11.6%. Their share in China's total proprietary brands increased by 0.4 percentage points to reach 22.6%.

Third, the imports of essential livelihood products and resource products have grown rapidly, and efforts to ensure supply and stabilize prices have yielded substantial rewards. In the first half of the year, the import value of agricultural products by private companies increased by 21.9%, which was 5.7 percentage points higher than the growth rate of China's total imports of agricultural products; among them, the import value of grain and meat increased by 24.2% and 13.1%, respectively. During the same period, their import value of medicinal herbs and drugs increased by 24.8%, 4.2 percentage points higher than the growth rate of China's total imports of these products. Furthermore, their imports of metal ore and coal increased by 33.9% and 148.8%, respectively, 25.6 and 55.8 percentage points higher than the growth rate of China's total imports of the respective products.

So to speak, private companies have made great contributions to China's foreign trade in terms of scale, structure, and quality. Moving forward, the customs authority will thoroughly implement the guiding principles of the 20th CPC National Congress and General Secretary Xi Jinping's important remarks on the development of the private economy and work unswervingly both to consolidate and develop the public sector and to encourage, support, and guide development of the non-public sector. We will also implement the 16 measures to optimize the business environment to ensure their intended outcomes, offer targeted services to benefit companies and alleviate their difficulties, thereby stimulating the development potential of various business entities, including private companies. Thank you.

Xie Yingjun:

Due to time constraints, there will be one last question.

Red Star News:

My question is: Could you brief us on China's imports and exports to other RCEP members in the first half of this year, and what is your outlook for China's trade with other RCEP members in the future? What has the customs authority done recently to promote the implementation of RCEP? Thank you.

Lyu Daliang:

Thank you for your questions. The full entry into force of the RCEP marks a significant milestone in the process of regional economic integration in the Asia-Pacific. In the first half of the year, China's imports and exports to the other 14 RCEP members totaled 6.1 trillion yuan, an increase of 1.5% year on year and contributing more than 20% to China's foreign trade growth. China's trade with most RCEP members registered an increase, among which trade with Singapore, Laos, Australia, and Myanmar increased by 27%, 25.8%, 16.4%, and 15.2%, respectively. RCEP brings continuous tangible benefits to Chinese companies, which can be observed in two main aspects:

On one hand, regional industrial chain cooperation has become closer. The gradual release of the market potential within RCEP will effectively facilitate the free flow of production factors in the region, contribute step by step to a more prosperous market featuring regional integration, and create new space for companies to expand their international industrial cooperation and enhance economic and trade exchanges. In the first half of the year, China's exports of intermediate products to other RCEP members amounted to 1.72 trillion yuan, accounting for 54.4%, or more than half, of China's total exports to RCEP members. Among them, the exports of auto parts and electrical equipment increased by 17.6% and 22.4%, respectively. During the same period, China imported 376 million metric tons of iron ore and 178 million metric tons of energy products from other RCEP members, marking a 4.7% and 70.4% increase, respectively.

On the other hand, tariff preferences have brought continuous benefits. The RCEP, combinable with existing bilateral free trade agreements already in force between China and other members, allows companies to enjoy more favorable tariff preferences and effectively reduce costs. In the first half of this year, Chinese companies enjoyed 1.07 billion yuan of tax concessions for 40.36 billion yuan of preferential imports within the RCEP framework, mainly covering plastics and plastic products, as well as machinery and parts; Chinese companies also enjoyed 1.91 billion yuan of tax concessions for 126.95 billion yuan of preferential exports within RCEP, mainly covering clothing and clothing accessories, inorganic chemicals, and plastics and plastic products. Across the country, 590 approved exporters independently issued 4,844 RCEP declarations of origin, amounting to a value of 4.34 billion yuan.

The full entry into force of the RCEP will further promote opening up and cooperation among its member states in a wider scope, at a higher level, and in a more in-depth manner, and provide a strong boost to China's high-level opening up. The customs authority will resolutely implement the plans of the CPC Central Committee and the State Council for the implementation of RCEP to ensure that RCEP plays its role in stabilizing foreign trade and foreign investment, promoting cooperation in the industrial chain and supply chain, and facilitating high-quality development. We will focus our efforts on the following areas: First, we will prioritize customs inspection and quarantine rules related to RCEP, improve relevant rules and regulations, upgrade the information technology-driven customs operating system, standardize and streamline customs procedures, and continuously optimize the customs clearance process to improve efficiency and reduce the cost of customs clearance for companies. Second, during international exchanges and cooperation with other RCEP members, we will pay close attention to their customs clearance procedures, inspection and quarantine rules, trade facilitation measures, and measures to implement their tariff preference commitments. By staying updated on the latest developments among RCEP members, we will be able to learn about and coordinate solutions to difficulties and problems encountered by Chinese companies both domestically and abroad. Third, we will intensify efforts to publicize RCEP policies and regulations, establish a targeted service system for technical trade measures within the RCEP framework, guide companies to fully understand and benefit from RCEP policies, and assist them in further exploring the RCEP market. Thank you.

Xie Yingjun:

Thanks for the introduction by Mr. Lyu and the participation of our media friends. Today's briefing is now concluded. Goodbye!

Translated and edited by Wang Yiming, Wang Qian, Ma Yujia, Li Xiao, Yang Xi, Liu Qiang, Cui Can, Wang Yanfang, Liu Caiyi, Zhou Jing, Xu Xiaoxuan, Zhang Rui, Zhang Jiaqi, Li Huiru, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Wang Guanghua, minister of natural resources and national chief inspector of natural resources

Mr. Wang Hong, vice minister of natural resources and head of the State Oceanic Administration 

Mr. Zhuang Shaoqin, vice minister of natural resources

Mr. Liu Guohong, vice minister of natural resources

Mr. Guan Zhiou, head of the National Forestry and Grassland Administration (NFGA) and the National Park Administration 

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 11, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 20th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Wang Guanghua, minister of natural resources, to brief you on building the modernization of harmony between humanity and nature, and to take your questions. Also joining us today are Mr. Wang Hong, vice minister of natural resources and head of the State Oceanic Administration ; Mr. Zhuang Shaoqin, vice minister of natural resources; Mr. Liu Guohong, vice minister of natural resources; and Mr. Guan Zhiou, head of the National Forestry and Grassland Administration (NFGA) and the National Park Administration. 

Now, I'll give the floor to Mr. Wang for his introduction. 

Wang Guanghua:

Thank you, Mr. Chen. Ladies and gentlemen, friends, good morning. I am very glad to meet and talk with you again. First, on behalf of the Ministry of Natural Resources ((MNR)) and the NFGA, I would like to express my gratitude to all of you for your long-term care and support for the work of natural resources as well as the forestry and grassland.

The 20th National Congress of the Communist Party of China (CPC) made strategic deployments on building a modern socialist country in all respects and advancing the great rejuvenation of the Chinese nation on all fronts . It also stipulated that the principle that lucid waters and lush mountains are invaluable assets must be upheld and acted on, and that maintaining harmony between humanity and nature must be remembered when planning developmen t. We have adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, earnestly implemented Xi Jinping Thought on Eco-Civilization, and fully performed the major tasks deployed by the 20th CPC National Congress. We have always coordinated development with security, oriented ourselves toward strictly observing the bottom line of resource security, optimizing the territorial space layout, promoting green and low-carbon development, and safeguarding the rights and interests of resources and assets, and actively promoted the building of the modernization of harmony between humanity and nature.

First, the bottom line of resource security has been strictly observed. We have earnestly implemented the deployment of ensuring the security of food, energy and resources, as well as industrial and supply chains , and promoted to better safeguard China's new pattern of development with the new security architecture. To ensure food security, we have strictly regulated the offsetting of farmland used for construction, offset farmland used for other agricultural purposes in a stable and orderly manner, frozen the farmland offsetting quota in areas where farmland has been illegally occupied, and worked to maintain the total area of the farmland. We have taken tough measures and constantly conducted inspections and law enforcement for farmland protection, and publicly investigated and dealt with major, typical cases involving illegal violations. In the first half of the year, the number of illegal cases related to land dropped by 64% year on year, with the area involved falling by 80.5% year on year. The total area of farmland nationally has registered net increases for two years in a row. To ensure energy security, we have comprehensively launched a new round of a strategic campaign in mineral exploration, improved the management system for mineral exploration and exploitation, and stimulated the vitality of the mining market. In the first half of the year, national investment in the exploration of solid minerals as well as petroleum and natural gas rose year on year by 17.2% and 7.5%, respectively, and 242 entities nationwide were newly granted exploration rights, a year-on-year increase of 25.4%. Breakthroughs have also been made in mineral exploration at the Laizhou gold mine in Shandong province and the Zhaotong phosphorite mine in Yunnan province. To ensure ecological security, China has comprehensively finished creating ecological conservation red lines for the first time, with the actual area drawn on the landmass and sea areas totaling around 3.19 million square kilometers. We have strengthened the management of the ecological conservation red lines, stringently regulated the approval for occupation, and rigorously observed the natural ecological security boundary. A spatial layout plan for China's national parks has been issued to build the world's largest national park system. Large-scale greening programs have been rolled out in a well-planned manner, and an area of around 100 million mu (6.7 million hectares) will be greened annually for the next few years. The overall plan for the Three-North Shelterbelt Forest Program has been revised and the sixth implementation plan for the program has been formulated, reflecting the consistent efforts being made to promote the construction of a green ecological shelter in northern China. The natural regeneration of forests, grasslands and wetlands has been advanced, and the forest-chief system has been comprehensively established, with nearly 1.2 million forest chiefs appointed at various levels. The list of terrestrial wild animals of important ecological, scientific and social value has been newly updated and publicized, greatly expanding the scope of protection for wild animals. The building of the national botanical gardens system has been actively promoted. To ensure the security of surveying and mapping of geographic information data, we have actively promoted the development of 3D Real Scene China . This year, we released guidelines for the standard system construction for intelligent-vehicle basic maps , to promote the development of self-driving and other new business models under the premise of ensuring the security of geographic information. In addition, we have worked with local regions to enhance the comprehensive prevention and control of geological disasters, marine disasters and risks, forest and grassland fires, and pests , going all out to protect people's lives and property.

Second, we have made efforts to improve the layout of land and space. We have seriously implemented the arrangement to foster a regional economic layout and a territorial space system which leverages complementary strengths of each area and promotes high-quality development. We have advanced the reform of the "integration of various types of plans into a single master plan." A territorial space planning system has taken shape. In the second half of last year, the CPC Central Committee and the State Council released China's first territorial spatial planning outline, which approves red lines for farmland and permanent basic farmland, for ecological conservation, and for delineating urban development boundaries. Overall spatial planning has been accomplished at the provincial, municipal, and county levels, all of which are being reviewed for approval. We have rolled out measures to help local governments make their own detailed plans to provide a legal basis for regulating the use of all territorial space, approving the planning for urban and rural development projects, as well as those activities regarding project development, renovation, protection, and restoration. Moreover, we have reported to the State Council for approval for the overall spatial planning for the demonstration zone for integrated ecological and green development in the Yangtze River Delta. We have also worked hard on the spatial planning for coastal belts and offshore waters, the Beijing-Tianjin-Hebei region and the Chengdu-Chongqing region, to support the implementation of major regional strategies. 

Third, we have promoted green and low-carbon development. Taking high-quality development as our priority, we have stepped up efforts to promote economic and social development in a green and low-carbon manner and worked hard to enhance diversity, stability, and sustainability in our ecosystems. We issued a series of policies to improve the use of land and sea areas in the second half of last year and the first half of this year. These policies included streamlining approval procedures and improving approval efficiency to ensure a good momentum of economic development. In the first half of this year, the MNR approved 37,000 mu of land for major projects, an increase of 138.3% year on year. As much as 2.144 million mu of agricultural land have been approved for other uses or requisitioned nationwide, in line with the level of the same period over the past five years. A total of 1.271 million mu of sea areas have been approved for projects, up 24.6% year on year. We have ensured that 4.724 million mu of state-owned land has been used for construction, an increase of 14.2% year on year. We have ramped up efforts to implement a comprehensive conservation strategy, launching land use quotas for new industrial projects and driving the green development of the mining industry. Moreover, we have carried out major projects for protecting and restoring key ecosystems, implementing 51 projects to holistically conserve and restore the mountains, rivers, forests, farmlands, lakes, grasslands and deserts. Among all these projects, seven were launched this year. We have taken solid steps to advance the Blue Bay environmental improvement initiative, the coastal belts protection and restoration project, and a special action for mangrove conservation and restoration to restore coastline and coastal wetlands. The area of mangroves in China has reached 438,000 mu, an increase of around 108,000 mu compared with the beginning of the century. We have ramped up efforts to advance the construction of three major platforms for deep-sea research, including the national gene database for deep-sea creatures. We have also worked hard to improve the national Antarctic and Arctic observing and monitoring network and accelerated the construction of the fifth research station in Antarctica. We have implemented the Green Expedition Initiative in Antarctica. We are currently preparing for the 40th Antarctic scientific expedition and the 13th scientific expedition to the Arctic Ocean. Furthermore, we have made full use of the natural gas hydrate drill ship and been working hard to set up a science and technology center for ocean drilling and planning for relevant international science programs.

Fourth, we have protected the rights and interests of resource assets. Centered on safeguarding the fundamental interests of the overwhelming majority of people, we have accelerated reform in the natural resource assets sector and strengthened the rule of law. We have coordinated the institutional reform of the natural resource property rights system and continuously promoted pilot schemes and agency mechanisms for delegating the ownership of natural resource assets under public ownership. We have deepened the reform of the rural land system and promoted a pilot program allowing rural collective land for construction to enter the land market. We have also established a unified survey, monitoring system, and ownership registration system for natural resources. This includes transferring contractual land rights and land management rights onto a unified registration system for immovable property. We have also launched new measures such as the synchronous delivery of housing or land with its property ownership certificate, and "transfer with mortgage." We've also advanced the formulation and revision of relevant laws and regulations, such as the Mineral Resources Law and the National Parks Law, strengthened the administration of the rule of law, strictly supervised law enforcement, and maintained order in natural resource management.

For the next step, centering on fostering the new development paradigm and promoting high-quality development, the MNR and the NFGA will plug away at our work, forge ahead, and make more outstanding contributions to building a modern socialist country in all respects with concrete efforts.

That's all for my opening remarks. Next, my colleagues and I are ready to answer your questions. Thank you.

Chen Wenjun:

Thank you, Mr. Wang. The floor is now open for questions. Please identify the news outlet you represent before raising your questions.

CCTV:

Mineral resources are the important material foundation for socio-economic development. The construction of modern industrial systems is also inseparable from the efficient utilization and development of mineral resources. What arrangements and considerations will the ministry make to further promote exploitation and development, and increase the reserve and production volumes of the country's key energy sources and mineral resources? Thank you.

Wang Guanghua:

This is a question of significant importance and represents an important task that our ministry is currently working on and will continue to focus on. I briefly answered this question during a "minister's passage" interview at this year's Two Sessions. However, we have made new progress after six months of effort. To further implement General Secretary Xi Jinping's important instructions on ensuring national energy and resource security, we have worked with relevant departments to promote the exploitation and development of key energy and mineral resources and boost the reserve and production volumes of those resources. We have meticulously organized and conducted another round of strategic actions in mineral prospecting. These actions are in accordance with the principles of consolidating foundational work, prospering the mining market, and enhancing scientific and technological support. I will elaborate on these three aspects.

Above all, we have strengthened our major foundational work.

First, we conducted national mineral resource surveys, researching all 163 kinds of mineral resources with confirmed reserves in more than 45,000 mining areas across the country. Therefore, we have obtained a comprehensive picture of the quantity, quality, structure, spatial distribution, development, and utilization of various mineral resources in China. Second, we have strengthened the basic geological survey of mineral resources by designating basic research areas and key research areas. This will intensify our efforts in mineral resources research. We have also designated key prospecting and deep mining areas. In these regions, we conduct ore prediction and locate ore bodies, aiming to extend the reach of our mine prospecting work and eliminate all "blind spots" throughout the process. Since the 14th Five-Year Plan period, we have initially designated 124 areas of high prospecting potential and submitted 102 target areas for prospecting. We have also provided guidelines for commercial exploration work with social funds.

Second, the MNR has enhanced policy support for mineral prospecting and exploration.

To begin with, the MNR has improved the system for managing the collection of proceeds from mining rights transfers. In contrast to the previous methods of collecting proceeds in a one-time payment, the new system mandates annual collection based on sales revenue generated from mineral production. This can safeguard the rights and interests of state mineral resource owners and effectively alleviate the burden on enterprises.

The MNR has also improved the registration and management process for the prospecting and exploration of mineral resources. The MNR encourages the adoption of comprehensive mineral prospecting methods. It has revitalized the secondary market for prospecting rights, removing restrictions on the transfer period of prospecting rights obtained through bidding, auction and listing. The MNR now allows the transfer of prospecting rights. It also simplified the application requirements and approval procedures for mining rights registration and improved the efficiency of the approval process.

The MNR has continued reforms in the management of mineral resources. It allows the transfer of resource mining rights of coal seam fissure resources and deep mineral resources to the same subject by agreement. The MNR has adjusted the proportion of mining area deductions during the renewal registration process for prospecting rights. It also introduced a detailed arrangement of the unified system of oil and natural gas prospecting and exploration, extended the retention period of prospecting rights, and improved the mechanism for the competitive transfer of mining rights. These measures have facilitated the prospecting and exploration of mineral resources.

Third, the MNR has strengthened its sci-tech support.

A group of new technologies and methods have been innovatively developed and applied for demonstration purposes. The MNR promoted the implementation of major sci-tech projects and key national plans for research and development (R&D). It also set up a dedicated category for geophysical prospecting within the natural resource science and technology awards, intending to boost the enthusiasm of geological exploration teams.

Going forward, we will collaborate with related government departments to continuously improve related policies. We will also create an enabling environment for all kinds of private actors to invest in the exploration and development of mineral resources. For instance, the MNR has issued directions to local governments on the transfer of "net mining rights ." By improving the preliminary preparatory work for the transfer of mining rights, the MNR helps local governments enhance service efficiency and better ensure the utilization of land, forest, grassland and other factors of production. The MNR also has expedited major mining programs' approval procedures to boost domestic demand, stabilize growth, and facilitate a new round of prospecting campaigns with effective measures.

21st Century Business Herald:

According to the report to the 20th CPC National Congress, major projects for preserving and restoring key ecosystems will be carried out at a faster pace in priority areas, including key national ecosystem service zones, ecological conservation redlines, and nature reserves. What progress has been made in ecological conservation and restoration? What measures and major projects will be undertaken next?

Wang Hong:

As we know, the principal challenge facing Chinese society has turned into the gap between unbalanced and inadequate development and the growing expectation of the people for a better life. Creating a fine eco-environment with lucid waters and lush mountains is one of the goals that we strive for. Since the 18th CPC National Congress, We have earnestly implemented Xi Jinping Thought on Eco-Civilization , strengthened planning and guidance, and enhanced coordination. We have also expedited efforts to implement major projects for preserving and restoring key ecosystems and strived to enhance the diversity, stability and continuity of these ecosystems. Progress is evident in the following two aspects.

First, we have established a strategic pattern for ecological protection and restoration of the national territorial space. The National Territorial Spatial Planning Outline (2021-2035) and Master Plan on Major Projects for the Conservation and Restoration of National Key Ecosystems (2021-2035) specified a national ecological security barrier pattern consisting of Three Eco-zones and Four Shelterbelts — the Qinghai-Tibet Plateau Eco-zone, Yellow River Eco-zone and Yangtze River Eco-zone, and Northeast Shelterbelt, North Shelterbelt, South Shelterbelt and Coastal Shelterbelt. Major projects and key tasks such as ecological protection and restoration, natural protected areas, and biodiversity conservation were also arranged accordingly.

Second, we have coordinated and implemented major ecological protection and restoration projects. We have implemented 51 integrated conservation and restoration projects of mountains, rivers, forests, farmland, lakes, grasslands and deserts around Three Eco-zones and Four Shelterbelts. We have also coordinated various ecological elements, taking river basins as the main unit to implement system governance, comprehensive management and source control, completing a total area of 80 million mu of ecological restoration. In 2022, the "Shan-Shui Initiative in China " was awarded as one of the inaugural 10 World Restoration Flagships, and praised as one of the most promising, ambitious and inspiring large-scale examples of ecological restoration in the world. For example, the Wuliangsu Lake Basin Project in Inner Mongolia has adopted regional management and implemented 35 sub-projects in seven categories, according to different natural geographical units and dominant ecosystem types in the basin. A variety of measures have been taken, including desert control, grassland ecological restoration, open pit mining management, artificial wetland restoration and soil erosion control, so as to improve the overall water quality of Wuliangsu Lake. The species and number of resident birds in the area have increased significantly. In addition, in recent years, we have focused on the main body and tributaries of the Yangtze River; the areas surrounding Beijing, Tianjin and Hebei province; the Fenwei Plain; and the Yellow River Basin, so as to promote the ecological restoration of historical mining sites in an orderly manner. Additionally, the total area completing the governance for ecological restoration has reached 4.35 million mu. We have also adhered to land-sea coordination and river-sea linkages, and have carried out major projects such as special campaigns to protect and restore marine ecosystems and the coastal zone conservation and restoration project. As a result, a total of 2,000 kilometers of coastline and 600,000 mu of coastal wetlands have been restored.

Next, we will continue to implement the integrated conservation and restoration projects for mountains, rivers, forests, farmland, lakes, grasslands and deserts. It is expected that by the end of the 14th Five-Year Plan, the ecological conservation and restoration area will total over 30 million mu. We will also implement ecological restoration projects in mining sites, completing the restoration of 2.8 million mu. Additionally, we will implement marine ecological conservation and restoration projects, so as to complete the improvement and restoration of 400 kilometers of coastline, and 300,000 mu of coastal wetlands. Thank you.

China Natural Resources News: 

As we all know, the territorial spatial planning is a new plan that combines main functional area planning, land-use planning and urban-rural planning. How can we leverage the new advantages of this multiple-plan coordination in territorial spatial planning to create new driving forces and new advantages for high-quality urban and rural development? Thank you.

Zhuang Shaoqin:

Mr. Wang has just briefly introduced the achievements of the multiple-plan coordination. Multiple-plan coordination is not just about resolving the contradictions and conflicts between the different original plans, and integrating the advantages of existing plans. It should also be based on the new development stage, implement new development philosophy, better support the construction of a new development pattern and promote high-quality development in urban and rural areas.

First, the advantage of putting ecology first and pursuing green development. The national territorial space planning that integrates multiple plans into a single masterplan is a new plan for the new era of ecological conservation. We must make development plans from the perspective of harmony between humanity and nature, creating new impetus and advantages. In recent years, we have designated "three types of territorial spaces and three types of control lines" in territorial space planning, namely urban space, agricultural space and ecological space, with three red lines for urban development boundaries, permanent basic farmland and ecological conservation. The aim is to coordinate development and security, optimize the development and protection of territorial space, guide urban and rural areas to build spatial patterns that save resources and protect the environment, and accelerate the building of a new path of high-quality development oriented toward prioritizing eco-environmental conservation and green development, thereby further enhancing the resilience of territorial space and enhancing regional carrying capacity and sustainability.

Second, the advantage of regional coordination and open development. We have implemented the functional zoning strategy, major regional strategies, coordinated regional development strategy, new urbanization strategy, rural revitalization strategy and other national strategies in a well-coordinated manner on the "one map" of territorial space planning. We have optimized the allocation of urban and rural resources and elements to form a regional integrated development pattern featuring coordinated development of large, medium and small cities and small towns, urban-rural integrated development, and two-way opening-up, as well as a multi-center, networked, open and intensive urban pattern. In this way, we can effectively support the construction of a new development pattern and promote common prosperity, enhancing overall regional coordination and competitiveness.

Third, the advantage of taking a people-centered approach and creating a high quality of life. The unified planning system has the advantages of systematic governance and source governance. In response to the people's desire for a high quality of life and particularly the needs of comprehensive development in the post-pandemic era, we must coordinate the working, living, ecological and security needs of urban and rural areas in the overall and detailed planning of territorial space. We must optimize the urban service functions and spatial structure with communities as the basic unit, and build convenient living circles for living, working, traveling, learning and elderly care. Through this "cell therapy" for cities, we can promote the treatment of "urban diseases" and effectively enhance the people's sense of fulfillment, happiness and security.

Fourth, the advantage of building a beautiful China based on the country's resources. The unified territorial space plan requires local governments to protect regional characteristics just as they protect biodiversity, to explore regional natural, historical, cultural and scenic resources, to retain unique urban "genes" such as geographical environment, cultural characteristics and architectural styles. In this way, unique local advantages will be shaped; the traditional standard industrialization approach which risks making cities and towns all look the same will be changed; and local influence, creativity and cohesion will thereby be enhanced.

Fifth, the advantage of integrating technology and policies to ensure the effective implementation of the territorial space plan. Based on the 3D Real Scene China project, we have initially established a digital and smart oversight, evaluation and early warning system for its implementation on the basic information platform for territorial space, as well as a supervision and assessment mechanism for regular examination and evaluation. These moves will ensure that high-quality urban development will come true based on the high-standard urban planning blueprint. Thank you.

People's Daily:

We all know that the protection of farmland is of vital importance to a nation, and not crossing the red line of 1.8 billion mu of farmland is a long-term task that requires concerted efforts. What progress has been made in holding both CPC committees and governments accountable for the protection of farmland? And what are the plans going forward in this regard? Thank you.

Liu Guohong:

Thank you to the reporter from People's Daily for the question. As we all know, farmland is the lifeline of grain production and the foundation of the sustainable development of the Chinese nation. General Secretary Xi Jinping has emphasized that farmland is the country's most precious resource and its protection is of utmost importance. Therefore, it is necessary to ensure that the total area of China's farmland stays above the redline of 120 million mu. The key to safeguarding the redline of farmland lies in ensuring that both the CPC committees and governments are held accountable, and ensuring that Party committees and governments at all levels fulfill their primary responsibility in this respect.

Since last year, in accordance with the policy decisions and plans of the CPC Central Committee and the State Council, we have cooperated with the National Development and Reform Commission and other departments to actively promote the integration of assessments on farmland protection and food security. Early this year, the central government issued measures for assessing how well farmland is protected and food security is ensured, providing comprehensive regulations on the assessment targets, content, procedures and application of the assessment results. The overall institutional framework for assessment work has been established. In general, our work is as follows: First, we have ensured that both CPC committees and governments are held accountable, making everyone involved clear about the implementation of the system of responsibility for CPC committees and governments of provinces, autonomous regions and municipalities to protect farmland and ensure food security. Assessment is conducted annually. Second, we have highlighted the key points of assessment and allowed "veto power" over major issues such as surpassing the redline of farmland, reflecting our resolutions of strict control and complete protection. Third, we have standardized the assessment procedures and taken measures such as self-inspection at provincial level and ad hoc on-site inspections, to ensure the objectivity and fairness of assessment results. Fourth, we have strengthened the application of assessment results, specifying that assessment results serve as significant references for comprehensive evaluation, performance assessment and auditing-based accountability of officials. Financial rewards and penalties will be given based on how well protection targets are fulfilled.

We are currently working with relevant departments and heads of CPC committees and governments at the provincial level to sign responsibility agreements for protecting farmland, making a promise to the CPC Central Committee and the State Council in terms of protecting farmland. Next, we will actively work with relevant departments to introduce supporting systems and regulations such as the assessment rules and detailed scoring criteria. Efforts will be made to promote the implementation of assessment measures as soon as possible and put in place requirements to ensure that both CPC committees and governments are held accountable and to implement lifelong accountability, in order to ensure that the total area of China's farmland stays above the redline of 120 million mu and the Chinese people firmly hold their rice bowls in their own hands. 

Thank you.

China Daily:

In recent years, China has intensified efforts to prevent and control desertification, making sand prevention and control a major task. A number of significant ecological projects, such as the Three-North Shelterbelt Forest Program, have been implemented. Could you please introduce the progress China has made in terms of sand prevention and control? And what are the plans for future work? Thank you. 

Guan Zhiou:

Thank you. This year marks the 45th anniversary of the implementation of the Three-North Shelterbelt Forest Program. Through the unremitting efforts of several generations, and especially since the 18th CPC National Congress, the construction of the Three-North Shelterbelt Forest Program has achieved remarkable accomplishments. Under the program, China has planted 480 million mu of trees, and improved 500 million mu of sandified lands and 1.28 billion mu of degraded grasslands. Particularly in key areas, we have witnessed a historic transition from "sand forcing humans to retreat" to "trees forcing sand to retreat." Practice has proven that the decisions made by the CPC Central Committee on sand prevention and control, especially on implementing the Three-North Shelterbelt Forest Program, are correct and farsighted. China has embarked on a path of sand prevention and control with Chinese characteristics that is in line with the natural laws and its national conditions. 

On June 6 this year, General Secretary Xi Jinping made an important speech at a symposium on strengthening the comprehensive prevention and control of desertification and promoting the construction of key ecological projects, including the Three-North Shelterbelt Forest Program (TSFP). The symposium was held in the city of Bayannur, north China's Inner Mongolia autonomous region. He stressed that the TSFP is of great concern to our country's ecological security, the building of a great country, and the sustainable development of the Chinese nation. It is a major national strategy and a great accomplishment at the present time that will benefit future generations. He called on those involved to shoulder the mission with courage, determination and perseverance to create new miracles in China's fight against desertification in the new era. As the responsible department, we will keep in mind his entrustment, resolutely shoulder political responsibility for desertification prevention and control, and promote the construction of the TSFP. In this endeavor, we must build upon the progress made thus far. We must focus on crucial areas, uniting our efforts, and wholeheartedly engaging in the following three pivotal battles. 

The first battle entails tackling the formidable challenge of combating desertification in the areas near the meandering bends of the Yellow River. This project encompasses regions across five provinces: Shanxi, Inner Mongolia, Shaanxi, Gansu and Ningxia. It serves as a crucial ecological security barrier in the northern part of the country. We will focus on managing Maowusu, Kubuqi, Ulan Buh, and other desert areas. We will comprehensively implement systematic regional management practices for mountains, waters, forests, farmlands, lakes, grasslands, and harnessing deserts. Additionally, we will actively promote ecological photovoltaic desertification control measures to significantly reduce ecological hazards caused by factors such as sand and salinity. These efforts aim to provide ecological support for the high-quality development of economic circle near the meandering bends of the Yellow River.

The second battle is to combate desertification in the sand lands of Horqin and Hunshandake. The project area is spread across five provinces: Hebei, Inner Mongolia, Liaoning, Jilin and Heilongjiang. It is the nearest source of sand to Beijing. We need to scientifically plan major ecological protection and restoration projects to achieve complete coverage of controllable desertified land in the region. This will involve steadily increasing the coverage of forests and grassland vegetation, thereby cutting off the source of sandstorms that affect the Beijing-Tianjin-Hebei region. We aim to build a reliable ecological barrier that safeguards black soil and ensures food security.

The third battle is focused on battling desertification in the Hexi Corridor-Taklimakan Desert region. This project area spans four provinces: Inner Mongolia, Gansu, Qinghai, and Xinjiang, and is a region of continuous natural deserts in northwest China, connected to the Gobi. It is crucial to enhance the management of key sandy areas and cross-border sources of sandstorms, particularly by constructing wind-proof sand-fixing forests and grass belts along the periphery of oases and desert edges. This measure will prevent the expansion and spread of sand sources.

To undertake these three pivotal battles, we are collaborating with relevant provinces, regions, and departments to initiate and implement several vital projects for preventing and controlling desertification as soon as possible. We aim to establish a strong foundation, ensuring a good start for carrying out the TSFP in the new era. Thank you.

Beijing Youth Daily:

The report to the 20th CPC National Congress proposed developing a national park-based nature reserve system. We have observed that the first batch of national parks has been established in our country. What progress has been made in national park development? What are the upcoming key tasks? Thank you.

Guan Zhiou:

Thank you for your question, attention, and support towards developing national parks. Establishing national parks is a crucial task, a major institutional innovation in ecological civilization, and another example guided by Xi Jinping Thought on Eco-Civilization. Through collaborative efforts, we have achieved two noteworthy milestones in this regard.

First, China launched a plan for the layout of its national parks, which includes 49 candidate areas for national parks, accounting for 10.3% of the country's land area, containing more than 5,000 species of terrestrial vertebrates and 29,000 species of higher plants, protecting more than 80% of key state-protected wildlife species and their habitats. Through the construction of national parks, we will protect our most important natural ecosystems, our most unique natural landscapes, our best natural heritage and our most biodiverse areas, which will save precious natural assets for future generations. The construction of national parks fully reflects the joint building and sharing of the community, which will benefit more than 400 counties in 28 provinces, and form a grand pattern in which 56 ethnic groups paint a beautiful picture of national parks and share the ecological well-being of national parks.

Second, construction of the first batch of national parks has achieved remarkable results. The Sanjiangyuan National Park has realized the overall protection of the sources of the Yangtze, Yellow and Lancang rivers. The current forest and grass coverage rate has reached more than 74%, and the Tibetan antelope population has recovered to more than 70,000. The Giant Panda National Park has implemented innovative systems and integrated resources to establish the China Conservation and Research Center for the Giant Panda. It has successfully protected more than 70% of giant pandas in the wild, and has opened 13 ecological corridors for giant panda populations. The Northeast China Tiger and Leopard National Park has established a protection mechanism integrating protection, monitoring and scientific research. Tiger and leopard populations continue to increase. To date, the population of wild Siberian tigers has exceeded 50, and the population of wild Amur leopards has exceeded 60. The Hainan Tropical Rainforest National Park focuses on strengthening the protection and restoration of rainforest habitats and has established the Conservation and Research Center for the Black Crested Gibbon. The population of black crested gibbons has increased to 37, which is made up of six families. The Wuyi Mountain National Park has achieved coordinated protection and development, in particular by establishing a development pattern that integrates ecological conservation, green development and improvement of people's livelihoods. In recent years, 17 new species have been discovered, including Megophrys ombrophila and Gastrodia fujianensis.

Next, we will focus on three tasks: First, we will promote the introduction of the National Park Law. Second, we will develop the first batch of national parks to a high quality. Third, we will actively promote the establishment of new national parks.

Friends from the media, the second National Park Forum will be held in Xining, Qinghai province, in August to show the fruitful results of national park construction. I would like to sincerely invite all of you to come see our national parks. Let's work together to make new contributions to the protection of biodiversity and the building of a modern world where humans and nature live in harmony. Thank you.

Thecover.cn: 

The report to the 20th CPC National Congress stressed that China will develop the marine economy, protect the marine ecological environment, and step up efforts to build China into a strong maritime country. What deployments have been made in building China into a strong maritime country? How is the related work progressing? And what are the next steps? Thank you.

Wang Hong: 

Thank you for your questions. General Secretary Xi Jinping attaches great importance to marine work, emphasizing that the ocean is a strategic location for high-quality development. The MNR should thoroughly learn and implement the guiding principles of the 20th CPC National Congress on strategic plans for accelerating China's development into a strong maritime country. We are actively planning how to open new ground and accelerate the implementation of new deployments. The progress of relevant work mainly includes the following four aspects:

First, we have promoted the marine economy's high-quality development. In 2022, China's total marine economy GDP reached 9.4628 trillion yuan, accounting for 7.8% of national GDP. In particular, emerging marine industries maintained rapid growth momentum. New orders and hand-held orders in the marine engineering equipment manufacturing industry increased by 175.9% and 34.6% in value, respectively, compared to the previous year. Meanwhile, offshore wind power generation increased by 116.2% year on year. China's first megawatt-scale tidal energy unit achieved grid-connected power generation, and the scale of seawater desalination projects further expanded.

Second, we have strengthened the protection and utilization of marine resources. Since the 20th CPC National Congress, the MNR has strictly controlled land reclamation from the sea. It has strengthened the protection of uninhabited islands and maintained the bottom line of natural coastline retention rate. We have continuously optimized the pattern of marine space protection and development. From January to May 2023, 10 suspected illegal land reclamation cases involving approximately 2.19 hectares were exposed and stopped nationwide, and four suspected illegal uses of islands covering about 0.81 hectares were identified. While strictly adhering to the bottom line of marine ecological security, we strive to ensure the use of sea areas and islands for major national projects and people's livelihood projects. This year, the MNR has submitted 17 project sea use applications to the State Council, involving an investment of approximately 134 billion yuan.

Third, we have enhanced marine monitoring and early warning capabilities. The MNR has continuously promoted the construction of the National Global Ocean Observation Network. This network forms an integrated observation system that combines marine station networks, radar networks, buoy networks, seabed observation networks, volunteer ships, cross-sectional surveys, and satellite remote sensing. We have also implemented the "chip" project for marine forecasting and made significant progress in independent innovation. We have named our own marine model "Mazu," and the "Mazu" series of marine early warning models have achieved operational status. China possesses complete independent intellectual property rights over the models.

Fourth, we have deeply participated in global marine governance. Our ministry has been actively developing blue partnerships, promoting the implementation of the United Nations' 2030 Agenda for Sustainable Development, and actively participating in negotiations on marine rules within the UN framework such as an international agreement on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction and the regulations on the development of mineral resources in the international seabed area. We are also playing a leading role in China's participation in the "United Nations Decade of Ocean Science for Sustainable Development" initiative ("Ocean Decade") and have proposed the "Digital Deep-sea Typical Habitats Program," which has been approved by the United Nations as a big science program under the "Ocean Decade," to promote the conservation and sustainable use of deep-sea biodiversity. All these moves are part of our vigorous efforts to promote the building of a marine community with a shared future. In April of this year, the 39th Chinese Antarctic expedition successfully completed all planned tasks and returned to China on board the icebreakers "Xuelong 2" and "Xuelong." Tomorrow, on July 12, the 13th Chinese Arctic expedition will depart from Shanghai on board the icebreaker "Xuelong 2" to conduct field research tasks.

In the next step, the MNR will, in accordance with the arrangements of the 20th CPC National Congress, fully and accurately implement the new development concept. We will adhere to the coordinated development of land and sea, vigorously enhance the economical and intensive use of marine resources, focus on building a modern marine industry system, promote the high-quality development of the marine economy, and make new contributions to building China into a strong maritime country.

Thank you!

Nanfang Metropolis Daily:

Surveying and mapping geographic information is an important data factor that natural resource departments have been diligently improving. What plans have been made regarding this work? What role will surveying and mapping geographic information play in protecting and utilizing natural resources to support high-quality economic and societal development, and contribute to the construction of Beautiful China? Thank you.

Liu Guohong:

Thank you for your question. With the accelerating pace of global digitization, we're swiftly advancing the Digital China Initiative. General Secretary Xi Jinping has stressed that spatio-temporal information and positioning and navigation services have evolved into vital new types of infrastructure. The CPC Central Committee and the State Council have laid out specific plans to promote the construction of a real 3D China and expedite the widespread application of the Beidou Navigation Satellite System.

The MNR is focusing on four aspects to advance the implementation of these arrangements. First, we are establishing a unified spatio-temporal database to construct a Digital China. This involves building a network of national satellite navigation and positioning base stations based on the Beidou Navigation Satellite System, accelerating the creation of a real 3D China and a spatio-temporal big data platform, and achieving connectivity between the digital and actual worlds. Second, we are generating rich data to support high-quality development. This data supports natural resources management, empowers government management and decision-making, contributes to the development of the digital economy, and meets the public's desire for a better life. Third, we are creating a sound environment conducive to the growth of the geographic information industry. This includes establishing and improving the basic institutions for surveying and mapping geographic information data, strengthening data supply, and supporting regulated data flow to promote the healthy development of new business forms. Last, we are maintaining the fundamental line of data security in surveying and mapping geographic information to build a new security architecture. We are creating new data security technologies and enhancing regulations and services for the sector.

Concerning the optimal utilization of surveying and mapping geographic information to facilitate economic and social development, our work will focus on two aspects.

First, we plan to leverage geographic information to conserve and utilize natural resources. Utilizing data from the real 3D China project and supported by real-time remote sensing data from satellites, we will build spatio-temporal connections between geographical bodies, natural resource entities, and immovable property entities. This aims to cover all areas, link all steps in the chain, and regulate the whole process. This includes investigating and monitoring natural resources; determining and registering natural resource rights; planning and regulating territorial space use; conservation and restoration of the ecosystem; and inspections and law enforcement for natural resources. This will provide services and support for the construction of a Beautiful China. For example, as a leading user, the MNR has 25 domestic satellites in orbit at present. We now update the 2-meter resolution images of our territory every quarter and the sub-meter resolution images annually. This allows us to identify changes in land surface space accurately and promptly, thus better supporting the dynamic regulation over the conservation and use of territorial space.

In addition, we will apply geographic information to foster high-quality economic and societal development. We aim to enhance the coordination of these data with other factors of production, ensuring fast, accurate, and intelligent spatio-temporal matching. This approach seeks to make resource allocation more effective, aiding the transition towards greener and more carbon-efficient development. For example, surveying and mapping geographic information serves as a geographical spatial database and a platform for data integration, applicable across various sectors and industries, and beneficial to countless households. This allows us to offer quality services in digital applications, including government management, disaster prevention and relief, the shared economy, smart transportation, and logistics and express delivery. It can be said that everyday activities such as sending and receiving express mail, hailing cabs, and more all rely on support from geographic data.

Next, in line with the demands of high-quality development, we will transform and upgrade our surveying and mapping practices. This holistic approach is designed to lend robust support to the progress of the Digital China Initiative and the Beautiful China Initiative. Thank you.

Chen Wenjun:

The last question, please.

CNR:

Just now, Mr. Wang mentioned that China issued its first territorial space plan outline. What new measures will be taken to advance the reform of integrating different plans into a single master plan for territorial space development on the new journey? Thank you. 

Zhuang Shaoqin:

Thank you for your attention to the reform of integrating various plans into a single master plan. When the national territorial space plan outline was issued last year, the CPC Central Committee provided clear requirements for deepening the reform of consolidating multiple plans into one master plan. To advance this reform further, our focus should be on implementing the important instructions of General Secretary Xi Jinping and the strategic plans laid out at the 20th CPC National Congress. The main aspects are as follows.

First, we will further develop the territorial space system. Acting upon the requirements set forth in the report to the 20th CPC National Congress for establishing a regional economic layout and a territorial space system that leverage each other's strengths, promote high-quality development, and improve urban planning, construction, and governance, we will hasten the formulation of special plans for trans-administrative regional and cross-watershed territorial spaces such as city clusters, metropolitan areas, and the Yangtze Economic Belt. This is based on the completion of the master plan for territorial space at different levels, providing stronger support for constructing a new pattern of development. Meanwhile, we will accommodate the needs arising from the fact that the development of land spaces in urban and rural areas now entirely depends on existing resources after the delineation of "three spaces and three lines," which refers to three types of land spaces - urban, agricultural, and ecological – as well as the red lines for ecosystem protection, permanent basic farmland designation, and boundaries for urban development. We will guide local governments to enhance the detailed planning system for integrating various types of plans into a single master plan, provide better guidance for urban renewal projects and rural development initiatives, and move faster to blaze a new path toward high-quality green development characterized by efficiency and effectiveness.

Second, we will enhance the functional zoning system. In accordance with the requirement for improving the functional zoning system and the development of territorial space outlined in the report to the 20th CPC National Congress, we will initiate the drafting of the implementation plan for national major functional zones. Furthermore, we will refine the system of supporting policies for functional zones and implement differentiated policies for special functional zones. This includes areas such as key ecological reserves, regions abundant in energy resources, locations rich in historical and cultural resources, and border areas. This will allow us to maximize their comparative advantages and take coordinated steps to promote the full implementation of the functional zoning strategies and other relevant national strategies in territorial space development.

Third, the supervision system for implementing territorial space plans will be improved. In accordance with the principle of full-life-cycle management and the requirement for unified criteria, planning, and the use of a shared digital map and platform, we will establish and refine the mechanism for category-based management and regulation of territorial space. We will also advance the digital and intelligent transformation of planning and regulation of the use of all territorial space. Furthermore, we will develop a list of special territorial space plans and enhance the network for the supervision, evaluation, and early warning of implementing territorial space plans. We will refine the dynamic mechanism for adjusting plans and resolve past issues, such as non-implementation or changes in plans due to adjustments in leadership teams, ensuring that a single blueprint will be thoroughly implemented until the end.

Fourth, we will bolster the development of the supporting system for territorial space planning. We will actively promote legislation for territorial space and enhance the planning standard system for integrating multiple plans into a single master plan. We will fortify the development of the territorial space planning discipline and foster talent for innovation. Furthermore, we'll continue to reform the qualification management of units that draft plans and the system of registered planners. We will strengthen the guidance and management of industrial associations and encourage public participation and supervision of planning, thereby nurturing a more favorable environment for the healthy development of territorial space planning.

Thank you!

Chen Wenjun:

Thanks to all the speakers and friends from the media. Today's briefing is hereby concluded.

Translated and edited by Xu Xiaoxuan, Wang Qian, Gong Yingchun, Huang Shan, Qin Qi, Zhou Jing, Zhu Bochen, Zhang Rui, Yang Xiaoqing, Wang Yiming, Liu Caiyi, Wang Wei, Cui Can, Yuan Fang, Wang Yanfang, Wang Mengru, Xiang Bin, Xu Kailin, Liu Qiang, Li Huiru, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Huai Jinpeng, minister of education

Mr. Wu Yan, vice minister of education

Mr. Deng Chuanhuai, director general of the Department of Policies and Regulations of the Ministry of Education (MOE)

Mr. Liu Zicheng, director general of the Department of Comprehensive Reforms of the MOE

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 6, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 19th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Huai Jinpeng, minister of education, to brief you on speeding up work to build a strong education system and developing education that meets people's expectations. Also joining us today are Mr. Wu Yan, vice minister of education; Mr. Deng Chuanhuai, director general of the Department of Policies and Regulations of the Ministry of Education (MOE); and Mr. Liu Zicheng, director general of the Department of Comprehensive Reforms of the MOE.

Now, I'll give the floor to Mr. Huai for a brief introduction.

Huai Jinpeng:

Ladies and gentlemen, friends from the media, good morning. It is a great pleasure to meet you here. I would like to express my gratitude for your long-term concern, understanding, support and assistance in the field of education.

First of all, I would like to introduce the progress in the education sector regarding the implementation of the guiding principles of the 20th National Congress of the Communist Party of China (CPC), which aims to accelerate the development of a strong education system that meets the expectations of our people.

As we all know, a prosperous education system leads to a prosperous nation, and the strength of education contributes to a strong country. Emphasizing the importance of education is a cherished tradition of the Chinese nation. Since the 18th CPC National Congress, the CPC Central Committee, with Comrade Xi Jinping at its core, has prioritized education as a major national undertaking and a key focus of the Party. Significant decisions have been made to expedite the modernization of education and build China's strength in education, resulting in historic achievements and transformative changes in the field. Currently, China has established the most extensive education system in the world, and its level of education modernization has reached the upper-middle tier worldwide, laying a solid foundation for the construction of a country that is strong in education.

The 20th CPC National Congress has provided clear guidelines for building a strong education system by 2035. On May 29, General Secretary Xi Jinping delivered an important speech during the fifth study session of the Political Bureau of the 20th CPC Central Committee, outlining the direction and fundamental principles for building a strong education system. The MOE's leading Party members group has acquired a deep understanding of the decisive significance of the establishment of both Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and firmly upheld Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and upheld the Central Committee's authority and its centralized, unified leadership. We have accurately grasped the essential characteristics, connotation requirements, and goals and paths of building a strong education system with Chinese socialist characteristics. We have started compiling the outline for the construction of an education powerhouse. By combining themed education, we will transform the directives of the Party Central Committee and the expectations of the people into vivid practices of high-quality development, effectively answering the major question of the era — "What is the role of education in building a strong country?"

First, it is essential to fulfill the fundamental tasks of education. The core issues of building China's strength i education revolve around who and how to train, and to what end. We must always bear in mind the original mission of educating people for the Party and the country. Through the comprehensive implementation of the Party's educational policies and the fulfillment of education's fundamental mission of nurturing moral character, we will ensure the cultivation of talents who will contribute to the Party's cause and facilitate the progress of a strong modern socialist nation. To this end, we will extensively incorporate Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era into textbooks, classrooms and the minds of students. We will integrate ideological and political education throughout colleges, secondary schools and primary schools, implementing projects such as fostering a new generation capable of shouldering the mission of national rejuvenation, implementing extensive ideological and political courses, and reinforcing the teaching of core socialist values. Additionally, we will enhance online education capabilities, employing the invisible influence of education to guide students in listening to and following the Party's leadership. We will comprehensively deepen quality education, develop plans for students' physical fitness and aesthetic education, implement plans to develop students' working habits, integrate labor education throughout the entire talent development process, encourage reading activities among young students, promote mental health among students, and strengthen science education to cultivate students' exploratory and innovative thinking while carrying out the "double reduction" policy, thereby establishing a solid foundation for their future growth and success.

Second, we will establish a high-quality education system. In the past decade, education at all levels and sectors in China has experienced a historic leap, gradually improving the open and flexible education system that serves over 1.4 billion people. Guided by a people-centered development philosophy, we will focus on high-quality development as the guiding principle of education at all levels and sectors. We will consolidate the foundation of basic education, enhance higher education, create a significant growth pole for vocational education, and accelerate the establishment of a lifelong learning-oriented society. Prioritizing developing competent teaching staff, we will strengthen teachers' moral standards and improve the teacher education system with Chinese characteristics. We will guide teachers to embrace the ambition of devoting themselves to the teaching profession and contributing to the country's strength, while fostering a social culture that respects teachers and values education. We will develop comprehensive plans for both "bringing in" and "going global" in education, with the aim of building China as an important center for education and innovation. China's doors to education will always remain open. On July 28, the 31st FISU World University Games will be held in Chengdu, Sichuan province. We warmly welcome young people from around the world to join us at this event and work together to make dreams come true.

Third, we will focus on core functions. It is the core function of a strong education system to support and lead Chinese modernization. Now, 240 million Chinese people are receiving higher education, and the new labor force receives 14 years of education on average. Higher education has significantly changed China's labor force quality mix. In recent years, universities and colleges have made a number of high-level scientific and technological achievements and indispensable contributions in original innovation and research on core technologies in key fields. We will comprehensively enhance our ability to develop high-quality education services, better support the building of world hubs for talent and innovation, and consolidate the foundation of people's happiness and national prosperity through education. We will launch a strategic program for comprehensive reforms in higher education and make pioneering moves to improve the quality of talent nurturing and produce first-class innovators, serving national strategies and regional economic and social development, while optimizing education layout and structure. We will give top priority to speeding up the development of world-class universities and superior disciplines with Chinese characteristics, vigorously develop basic disciplines, emerging disciplines, and interdisciplinary subjects and implement major programs training first-class talents in basic disciplines, outstanding engineers, and outstanding physicians, as well as form synergies to address inadequacies in training high-level, first-class innovators. We will step up organized scientific research in universities and colleges, concentrate resources on original and leading scientific and technological breakthroughs, and move faster to build an independent knowledge system in philosophy and social sciences. We will facilitate the construction of provincial-level modern vocational education systems and municipal industry-education consortiums, as well as industry-education consortiums for various sectors to cultivate high-quality technological and technical talents.

Fourth, we will stimulate impetus and vitality. We are well aware that it takes systematic leaps and qualitative changes for an education system to go from big to strong. We will use policies, systems, and mechanisms to offer motivation and guidance, and use educational assessments to further education reforms and innovation and abate utilitarianism in education. We will promote education fairness in comprehensive education reforms in an all-around manner and move faster to build a high-quality and balanced basic public education service system. We will promote the exchange and rotation of outstanding backbone teachers and offer more convenient access to education, as well as care for every student. The plan to improve the nutrition of students in compulsory education benefits over 37 million rural students every year, and the average height of male and female students in these areas has increased by 4.2 centimeters and 4.1 centimeters since 2012, respectively. We will further improve the financial aid system so that it covers students at all stages of schooling, and narrow the gap between urban and rural areas and among different regions, schools, and groups. We'll also give every child access to fair and quality education, and better meet their needs for sound education. We will further implement national education digitalization strategic action, upgrade the smart education platform system, build and make good use of the world's largest education and teaching resource repository, and upgrade the national digitalized big data center. We will consider digitalization in education as a crucial breakthrough to explore new avenues of development and foster new competitive advantages, so as to provide strong support for the modernization of education and the construction of a leading country in education. 

That's what I have for now. Next, my colleagues and I would be very glad to take your questions. Thank you.

Chen Wenjun:

The floor is now open to questions. Please identify the media outlet you represent before raising your questions.

CCTV:

The report to the 20th CPC National Congress noted that education, science and technology, and human resources are the foundational and strategic pillars for building a modern socialist country in all respects, and we must regard talent as our primary resource. What plans do the MOE have for improving the overall quality of domestically cultivated talent and fostering outstanding innovators? Could you please elaborate on the measures and arrangements? Thank you.

Huai Jinpeng:

Thank you. I will take this question.

General Secretary Xi Jinping said in the report to the 20th CPC National Congress that "We will … comprehensively improve our ability to nurture talent at home. All this will see us producing first-class innovators and attracting the brightest minds from all over." At the fifth collective study session of the Political Bureau of the CPC Central Committee on May 29, he further stressed "strengthening the nurturing of first-class innovators at home to provide talent support for achieving breakthroughs in core technologies in key fields." To implement the guiding principles of the 20th CPC National Congress, the MOE has adhered to principles on talent nurturing, education and teaching, and the needs of national development, and strived to improve talent nurturing at home and cultivating first-class innovators. Our efforts are mainly in five aspects:

First, by fostering virtue. We have remained guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in fostering virtue, and promoted the integration of the ideological and political education curriculum across all levels, from elementary schools to universities. We have implemented projects fostering virtue among the new generations by developing ideological and political education curricula and the national youth reading campaign. We have upheld education fairness and pursued higher quality, constantly improved the system of ideological and political work in schools, and guided students to steadfastly follow the Party and its guidance. In particular, we have actively promoted the comprehensive reform in higher education and consolidated the role of basic education as a foundation.

Second, by stepping up the cultivation of basic research talents. We have promoted the cultivation of first-class innovators through the outstanding talents program, the program of foundation consolidation, and the program of cultivating students excel in basic disciplines. We have started to implement the national strategic action for cultivating first-class talents in basic disciplines. Currently, we rely on 288 bases in 77 high-level universities for that cultivation. These have attracted over 30,000 outstanding students to engage in basic disciplines, forming an echelon network of first-class talents in those disciplines. At the same time, we have intensified efforts to conduct basic research in talent development, enhancing the ability of nurturing talent in basic disciplines through strengthening basic research.

Third, by serving the national strategy. We have strengthened talent cultivation, especially for urgently-needed and high-level talents, to meet the needs of the country's economic and social development. Through systematic layout, we have planned to establish 18 national colleges and innovation research institutes for outstanding engineers and promote the integration of industry and education. We are set to build a batch of national colleges for outstanding doctors to train good and noble-minded doctors with outstanding clinical capabilities. The development of new disciplines of engineering, medical science, agricultural science, and liberal arts are deepened, and the first batch of 12 colleges of future technology, 50 modern industrial colleges, and a group of colleges with specialized characteristics have been built.

Fourth, by strengthening talent training in philosophy and social sciences. We have increased cooperation with practice sectors and accelerated talent cultivation in fields of foreign-related rule of law, international communication, and economics. We have also fully advanced teaching in Chinese political and legal practice, journalism and communication, economics, and arts education to create "golden curriculums," and made efforts to cultivate high-quality talents in archaeology, intangible heritage, foreign-related rule of law, international organization, international communication, and related fields.

Fifth, by striving to train more technical and skilled personnel with higher quality, such as skillful and master craftsmen. At present, we have established the largest vocational education system in the world. Every year, around 10 million high-quality technical and skilled personnel graduate from the country's secondary and higher vocational schools, ensuring a steady flow of human resources to serve economic and social development. We will adopt integrated design of vocational education personnel training systems, and further enhance the adaptability of vocational education in order to provide a strong source of talent and skill support for the building of a modern socialist country in all respects. Thank you.

Cover News:

Higher education plays a leading role in building China's strength in education. Next, what will the MOE do to deepen the comprehensive reform of higher education? What's your comment on the "Shanhe University" topic recently discussed online? Thank you.

Wu Yan:

I'm grad to answer your questions. General Secretary Xi Jinping pointed out that higher education is an important indicator of a country's development level and potential. To give full play to the leading role of higher education in strengthening education, the MOE will implement the comprehensive pilot reform of higher education as one of the nine major projects this year. 

Our main target is innovation. We must first significantly improve the talent innovation capabilities of higher education institutions. Second is to greatly enhance their sci-tech innovation capabilities so as to provide a strong fundamental support and strategic leading force to achieve Chinese modernization.

Our main task is to carry out two kinds of trials. First is to carry out trials on fully improving the quality of independent talent cultivation to train top-notch innovative personnel. Second is to carry out trials on enhancing the adaptability of our capacity and quality to serve national and regional economic and social development.

Our main path and method require three steps to be launched "in an organized manner." First is to cultivate top-notch innovative personnel in an organized manner. Second is to promote sci-tech innovation in an organized manner. Third is to serve national and regional economic and social development in an organized manner, focusing on the national major strategic needs and regional leading industries.

In the process of work, we will insist on "three integrations." First, we will deepen the integration of vocational education and general education. By interconnecting universities and higher vocational schools in the same region, we will train all types of top-notch innovative personnel across the entire chain. Second, we will deepen the integration of industry and education and take extending the education chain, serving the industrial chain, supporting the supply chain, building the talent chain, and upgrading the value chain as an important part of comprehensive reform. Third, we will strengthen the integration of science and education. Cutting-edge sci-tech achievements will be introduced into every link of talent cultivation, including core courses, textbooks, and practices, and high-level scientific research will be used to support high-quality talent cultivation to serve the high-quality development of the economy and society.

Through comprehensive reform, we also emphasize the "three enhancements." First, we will enhance target orientation, proactively undertake the country's major tasks, and carry out frontier research at the top level. Second, we will enhance problem orientation. Through thorough research, we will focus on major problems and adopt differentiated polices in different provinces and schools. Third, we will enhance result orientation. Taking the implementation of strategic cooperation agreements between the MOE and provincial governments as the starting point, we will build regional talent centers and innovation highlands, and form an innovation paradigm through pilot zone-style reform.

When carrying out the two kinds of trials, we will also focus on the following three aspects. First, we will expand advantages. We will encourage pilot universities to make continuous efforts in areas where they have national comparative advantages to create new strengths to drive development. Second, we will strengthen weak links. We will focus on bottleneck fields to do integrated research for breakthroughs. Third, we will break new ground. We will carry out forward-looking research on future groundbreaking technologies in the following 10-15 years so as to seize opportunities and lead future development in original innovation from the source of science and major root technology research, as well as the training of top-notch innovative talents. 

We have also noticed the issues about "Shanhe University," as mentioned in your question. In the face of the new situation of higher education, as it enters a new stage of popularization and the new challenges and issues related to contributing to socioeconomic growth, the MOE will focus on the targets of enhancing national competitiveness, contributing to major socioeconomic development strategies, and promoting common prosperity. To achieve these targets, the MOE will work on optimizing the structure of higher education resources, and support the central and western regions, especially the populous provinces, in expanding the scale of higher education resources and optimizing their types and regional distribution. Thank you.

Wall Street Journal: 

Thank you very much. I'd like to ask a question about the high unemployment rate among youth in China today, specifically as it relates to the education system. My question specifically is, to what extent do you view the unemployment rate of more than 20% among youth in China today as a reflection of any weakness, for example, in the higher education system in China today? Are the graduates of Chinese universities being equipped with the skills they need to enter the workforce? In what areas could you improve this? Thank you very much.

Huai Jinpeng:

Thank you for raising such significant questions. We have also monitored this issue and plan to make more efforts accordingly. I'd like to invite Mr. Deng to provide more information.

Deng Chuanhuai:

College graduates are invaluable talent resources for both the Party and the nation. In 2023, the number of college graduates in China reached 11.58 million. The MOE has steadfastly carried out the directives and requirements of the CPC Central Committee and the State Council. It has spared no effort to launch the campaign promoting employment and entrepreneurship among college graduates and expediting employment promotion work. The campaign can be summarized in the following six aspects.

First, the MOE has worked to explore channels for creating jobs. Under the guidance of the MOE, universities have built targeted connections with enterprises and expanded channels for employment in a bid to explore more job opportunities. The MOE has also launched campaigns that bring tens of thousands of enterprises onto university campuses, aiming to ensure the ongoing success of campus recruitment activities, encourage more graduates to participate, and further effectively bridge the gap between job supply and demand in the market.

Second, the MOE has worked to expedite the recruitment process. The MOE has worked with related government bodies to speed up the hiring process for policy-backed positions within government departments, public institutions, and state-owned enterprises. The MOE has launched a group of programs targeting primary-level jobs. This includes the special job program enabling college graduates to serve as teachers in rural compulsory education schools; the program encouraging college graduates to pursue careers in rural agricultural, educational, medical and poverty alleviation sectors; the program engaging college graduates to volunteer for primary-level positions in western regions; and the program offering college graduates community-level positions. In collaboration with healthcare authorities, the MOE also initiated a special program enabling college graduates to serve as medical workers in rural areas.

Third, the MOE has made efforts to communicate and implement its policies. The MOE released overviews of employment and entrepreneurship policies. The MOE also issued "policy maps" that outline employment promotion measures nationwide and communicate related policies to the public in a bid to ensure the understanding and utilization of these policies by college graduates and employers.

Fourth, the MOE has improved employment guidance services. The MOE has strengthened personalized guidance for college graduates yet to secure employment. The MOE organized a range of internship and trainee programs. These efforts aim to boost the confidence of college graduates and help them find jobs as soon as possible.

Fifth, the MOE has strengthened employment assistance for key groups. The MOE has directed universities nationwide to implement a "one-to-one" assistance mechanism. The MOE also carried out an employment skill training program, which recommend at least three positions for college graduates from low-income families. The national college student employment service platform is organizing special recruitment sessions, and all graduates are welcome to participate and explore potential job opportunities.

Sixth, the MOE has enhanced follow-up services for college graduates. Education institutions will launch ongoing employment services for unemployed college graduates by offering consistent job recommendations, employment services, and key assistance measures after they leave school. The MOE also collaborates with human resources and social security authorities to ensure that unemployed college graduates can access public employment services.

In recent years, the MOE has ramped up efforts on the supply-side reform of higher education and taken multiple measures to promote integration between industry and education sectors and enhance collaboration between universities and enterprises. The MOE also launched follow-up surveys about college graduates' employment status. These surveys aim to ensure that graduates' employment outcomes can better affect disciplinary arrangements and talent development schemes and better align higher education with the needs of socioeconomic growth.

Promoting employment among college graduates is the due responsibility and aspiration of the education sector. In the current graduation season, we will intensify our efforts to facilitate successful employment for more graduates. We would like to take this opportunity to call upon employers to consider hiring more college graduates, which will help strengthen their talent pool. We also sincerely hope all sectors of society join hands and contribute toward boosting employment among college graduates. Thank you.

Huai Jinpeng:

This question is very well-posed. Building upon the valuable information shared by Mr. Deng, I would like to add a few additional points.

First, the number of college graduates in China this year reached 11.58 million, an increase of some 8 percent over the same period last year. As socioeconomic growth transitions towards a high-quality phase, the demand for many talented individuals is increasing. In the meantime, it has become evident that college graduates' employment not only affects them but also attracts the attention of the entire society. This matter has been given great importance by General Secretary Xi Jinping, the CPC Central Committee and the State Council. The employment rate on July 2 was 2 to 3 percentage points higher than the same period last year. With the joint efforts of all sectors of society, our achievement is worthy of recognition. At the same time, these 10 million knowledgeable and ambitious graduates in their 20s will inject great vitality into social development and enterprise innovation and research. We need to offer proactive support and create favorable conditions for the employment of college students, ensuring their successful transition into the workforce. In particular, we must focus on meeting their basic employment needs and assisting graduates facing hardships. In this aspect, the Chinese government, society and the MOE have been working proactively to ensure that every such student is offered at least three to five positions. By doing so, we can better adapt to their needs and support their lives. In conclusion, we are committed to meeting graduates' basic employment needs and stimulating their vitality and innovation capacity. 

Second, approaches to education and teaching, along with disciplinary settings and structures, should be consistently adapted to economic and social development. It is crucial to ensure a reasonable level of alignment while also being moderately forward-thinking. The talent supply of college students should effectively match the labor market, and being appropriately forward-thinking, which presents new requirements for the structure of higher education and regional educational adjustments and layouts. This is also very important. Not only should the students learn to grow as individuals, but also have the opportunities to apply what they have learned, as social development continually needs a constant source of talent support.

Third, the employment expectations of young people have changed greatly compared to a decade or five years ago. I recall a student sharing that he has many academic and career options, not necessarily to return to his hometown but maybe to venture outside for a few years. While some of these ideas might not be fully supported by his family, he feels he can choose flexible employment, securing multiple offers before making a decision. However, at the same time, we promote a more proactive employment perspective, encouraging young people to understand the society through practice and work, creating value with their youthful vigor and dedication. We are particularly grateful to all sectors of the society for their support of the education and employment of college students. Many enterprises recognize the pivotal role talent development plays in fostering enterprise innovation and market growth, nurturing and reserving talents, and collaborating with the education system to promote the better development of society and contribute to the improvement of overall human capabilities.

I just added a few words because this is really a big concern for us. Thank you.

Chengdu.cn:

The CPC at its 20th National Congress set a clear goal for accelerating high-quality, balanced development and urban-rural integration in compulsory education. How will the MOE promote the achievement of this goal? Thank you.

Liu Zicheng:

I am glad to answer this question. Compulsory education concerns tens of thousands of families and garners widespread interest. In 2021, all counties across China passed the national assessment of balanced development in compulsory education. This represents a new milestone in the history of China's education development, signifying that China's compulsory education has entered a new stage of development. According to our planned objective, the majority of the country's counties will achieve the high-quality and balanced development in compulsory education by 2035. There's still considerable work ahead to attain this goal, and we will focus on five aspects to advance this work.

First, we will strengthen areas of weakness by promoting the standardization of school development. We will initiate a project to standardize the development of compulsory education schools, promoting the basic conditions of compulsory education schools, including campus and dormitories, teaching instruments, class size adjustments, and more, to meet the required standards. This approach aims to create an optimal teaching, cultural and living environment.

Second, we will help the disadvantaged by promoting the integration of urban and rural education. We will lay out urban and rural schools reasonably in line with population changes. We will also strengthen the construction of boarding schools and small rural schools, fully leveraging the leading role of urban schools to elevate the quality of education in rural areas.

Third, we will promote the balanced allocation of teachers and education resources. We will carry out exchange and rotation of teachers and headteachers in an orderly manner, advance the reform of "County Management and School Recruitment" in teacher management. We will improve the support and incentive mechanism for teacher exchanges and rotations. For instance, teaching in rural schools should be specified as a requirement for seeking senior professional titles and a priority in selection and appointment of primary and secondary school principals. We will provide incentives and support for schools that train and provide outstanding teachers. At the same time, more training shall be given to teachers to elevate the level of teaching and education.

Fourth, we will leverage digital means to foster smart resource sharing. We will improve and fully utilize the national smart education platform for primary and secondary schools, build a digital education platform system featuring connectivity, joint contribution and shared benefits, and broaden the coverage of high-quality education resources.

Fifth, we will promote equity and institutionalized educational care. We will fully implement the policies that children can receive compulsory education at schools close to where they live without having to take entrance exams, and public and private schools can start recruitment simultaneously. We will guarantee equal access to compulsory education for children living with their migrant worker parents in cities. Financial assistance and support will be offered to care for and help students from economically disadvantaged families, left-behind children, and those with disabilities, ensuring that hundreds of millions of children have access to quality education together.

Recently, the General Office of the Communist Party of China Central Committee and the State Council General Office jointly issued Opinions on Constructing a High-Quality and Balanced Basic Public Education Service System, which further improved the policy guarantee system around the above five priorities. We will take multiple measures to promote the implementation and effectiveness of these tasks, actively carry out the establishment of high-quality and balanced compulsory education in counties, and steadily advance the national assessment to ensure that the high-quality and balanced development of compulsory education is achieved by 2035 as scheduled. Thank you.

21st Century Business Herald:

We have noticed that the MOE implemented the national education digitization strategy last year and has made positive progress, and the national Smart Education of China platform won the 2022 UNESCO ICT Prize. What are the plans going forward to further implement the education digitization strategy? Thank you.

Huai Jinpeng:

Thank you for your question. I'm happy to answer. The digitization of education is an important part of modernizing education. We hosted the World Digital Education Conference this February, with more than 130 countries and regions participating. At the conference, I also talked with international education workers and researchers about China's thinking and practice on "digital transformation and the future of education." On the basis of the last decade, the MOE fully implemented the national education digitization strategy last year to provide society with a streamlined, efficient, safe and reliable digital education platform through typical applications with a focus on service. The basis of our work is "connection first, content-based and cooperation-prioritized," which in English is the "three Cs"— "connection, content and cooperation." This means that we are strengthening the integration of advantageous education resources across the country through cooperation, and jointly advancing the digitization and modernization of education through effective cooperation of both domestic and global education resources. We hope to pool China's quality resources, digitalized resources and our wisdom based on past development, or "string pearls into a necklace" metaphorically speaking. We hope to raise its value, transfer its energy and better serve and support the development of education.

Since the platform launched one year ago, more than 200 million youngsters have studied online, especially in remote mountainous areas and rural areas, where they can access high-quality educational resources from Shanghai, Beijing, as well as Zhejiang and Jiangsu provinces. As Mr. Liu mentioned just now, the quality and balance of compulsory education has been achieved. We have achieved the balanced allocation of advantageous resources, which we did not manage in the past. Since its launch, the platform has received more than 26 billion visits, making it the world's largest resource pool for education and teaching. You also mentioned that China's practice of the digitization and modernization in education was fully acknowledged by UNESCO, winning a UNESCO prize.

The report to the 20th National Congress of the CPC states that we should advance digitization in education, build a learning society and a major learning-oriented country where people can keep studying life-long. The general secretary noted during his keynote speech on May 29 that digital education is where our country can achieve breakthroughs in opening up new areas and forming fresh strength of educational development, and emphasized more should be done to encourage digital education to provide effective support for personalized learning, life-long learning, expanding the reach of quality educational resource and modern education.

In practice, we continue to improve our efforts on related work, such as the massive open online courses (MOOCs) program in western areas, which has provided more than 190,000 MOOCs and customized courses for universities in western China, giving strong support for talent training in universities in western areas. We helped open more than 4.46 million courses with mixed teaching models there, and students have taken 495 million courses. For example, at the end of last month, when we held an on-site promotional event for national education digitization in Wuhan, we noticed that a course on electronic circuit systems at Tsinghua University was connected with universities at Beijing, Wuhan and Guizhou. As a public basic course, students can all share in the same class, ask questions at the same time and answer them together. It was difficult to achieve this in the past. There is an old saying: "the peacocks fly southeast." While promoting education services in China's central and western regions, especially during the last decade and the past five years when stronger efforts have been made, education in China has shown a unique climate whereby "the peacocks fly northwest." Education workers from universities in eastern China and Beijing go to universities in the western regions to support local construction. They are not only serving as presidents or professors, but also working with local researchers to form teams and research forces in higher education, providing services for the regional economies and talent development. At the same time, we also have corresponding assistance in vocational colleges where we still have room to boost efforts to improve the fairness and quality of education. Of course, we have also seen the effective use of digital resources, which is of great significance to better serve the whole society.

In the next step, we will focus on four aspects: First, we will build a national big data center for the digitalization of education and make it an important platform for us to provide high-quality resource services, a national digital education resource sharing center, a gathering center for public educational services, and a management and evaluation center for digital resources. Digitization is not just about technology, nor is it just a platform or about turning resources into numbers. More importantly, it will leverage our education reform and genuinely serve students' learning and development, support teachers' education and teaching activities, and enhance schools' management and governance capabilities. Additionally, It will improve our research capabilities in education modernization in the new era.

Second, we will enhance the use of big data in education and teaching activities. At present, many people pay much attention to artificial intelligence's impact on education. Starting with digitization and intellectualization, there is no big data, no big model, and no effective application combined with vertical fields to improve education's comprehensiveness and accuracy. Therefore, it requires new methods. In this regard, we need to intensify efforts to strengthen education and teaching empowered by big data, better promote the balance of high-quality resources, and better serve the comprehensive development of people and the improvement of education capabilities. At the same time, we will use such a platform to improve teachers' abilities. Last year and this year, during the winter and summer vacations, teachers were provided with online digital learning to strengthen the service of their teaching activities and the cultivation of students. In this respect, basic, vocational and higher education have all yielded good results. Since the beginning of this year, we have used digital education to empower rural education pilots to better organize and allocate resources. We have organized nearly 100 volunteers from four colleges and universities to leverage the national smart education platform to target more than 1,600 students in four key rural revitalization counties to conduct digital education assistance experiments. These practices play an important role in young people's digital literacy and technological knowledge skills, as well as in improving teachers' teaching activities. During this experiment, we provided digital support and experience through the two categories of information technology and art for a total of 190 class hours. There are imbalances and incoordination in this regard. However, the chances of achieving better coverage capabilities are greatly increased, and we will continue to strengthen our work in this area. 

Third, we will enhance the ability of education to deliver effective public services. The National Smart Education Platform provides a public service platform that is not only for learning and improving teachers' skills but also provides public service products for all students and society. For example, by the end of June, a total of 95 special recruitment sessions had been provided for this year's fresh graduates, collecting 16.24 million pieces of job information and providing 16.24 million jobs for 11.58 million fresh graduates on the National 23456 Graduate Employment Service Platform. As I previously stated in my response to the question from the Wall Street Journal reporter, for students with special difficulties, according to the requirements of the central government and social expectations over the years, the employment rate of students from families with difficulties is 2 to 3 percentage points higher than that of students in the normal system. Therefore, we need to support some students who have difficulties getting employed. And we need to respect some students who have flexible choices. In addition, some students have new pursuits and considerations. So besides providing learning, digital education platforms should strengthen their public service capabilities by employing tools such as MOOCs, micro-classes, and virtual reality. Moreover, they should utilize virtual reality and augmented reality technologies to enhance areas that were previously challenging to experiment with and required hands-on abilities. This is an extension of modern education through digital education platforms. These platforms are not simply about moving textbooks and classrooms online; they provide enhancements with new service functions and capabilities.

Fourth, we will strengthen the internationalization of digital education. As an open country, we believe China should share its educational resources, capabilities, models, and methods with the world. We also call on the world to share educational achievements, clues, and education modernization efforts to provide effective and better resources to people and students across the globe, which is also an important basis for better open cooperation and people-to-people exchanges. We also expect and continue to strengthen exchanges and cooperation between China and our international counterparts in digital education. Developing digital education, promoting education digitalization, and advancing education modernization are the trends of our times, the need for development, and the direction of reform. We have accumulated experience in this area and discovered new problems. We also found that it is extremely important for constructing a leading country in education in the future. We will continue to work hard in this regard. At the same time, it is an important supporting aspect of a learning society and lifelong learning. Therefore, in these aspects, we will be more oriented and focus on educating the elderly, building more open universities, and better providing a learning environment for the whole society where one does not necessarily go to school. For example, youth literacy activities are carried out through this method so that everyone can learn at any time, anywhere. Digital education is not only a technology and platform but also a public service and an important aspect of supporting the future learning society. It is also a crucial aspect that needs to be studied and taken into consideration for future policies and systems.

Thank you for your question.

China Education Television:

As we all know, first-class universities are the main force of basic research in universities and the birthplace of major scientific and technological innovations. We would like to know, what measures will the MOE take to promote the integration of science and education and further develop scientific and technological innovation capacity to tackle bottlenecks in key and core technologies? Thank you. 

Huai Jinpeng:

Thank you for your question. It's a major issue of great concern to all. Mr. Wu will share his answers with us.

Wu Yan:

I'm glad to answer your question. First-class universities are the main force of basic research and the birthplace of major scientific and technological breakthroughs. Over the last period, the MOE has vigorously promoted the integration of science and education to enhance the ability of independent innovation and improve the quality of independent talent training. In the field of basic research, we have produced many original achievements of great significance, as seen in the quantum anomalous hall effect. At the same time, we have gathered strength to make breakthroughs in scientific research and built a number of advanced equipment for the country, including the cutter-suction dredger Tianjing and the high temperature gas cooled reactor, making significant contributions to tackling bottlenecks in key and core technologies.

In a bid to provide support for achieving breakthroughs in key and core technologies, we have mainly adhered to two orientations: goal-orientation and problem-orientation. We have encouraged universities to make scientific research breakthroughs in an organized manner. Over the last period, the MOE has concentrated its efforts on formulating the outline for building China into an educational powerhouse and made specialized arrangements in the work of scientific technological innovations for universities.

In the next step, we will provide support to realize scientific and technological independence and advancement at a higher-level, speed up well-organized scientific research at universities, promote integration of science and education, and gather strength to make breakthroughs in key and core technologies. As universities represent the birthplace of major scientific and technological breakthroughs, one of our major tasks is to effectively address the urgent needs of the country and tackle a batch of bottlenecks in key and core technologies. 

Since last year, we have made an intensive effort to conduct scientific research in an organized manner, aiming to gathering scientific strength from universities to remedy the insufficient ability to serve the major strategic needs of the country. We have also fostered a number of major research projects focusing on basic, strategic, and pioneering industries, and concentrated our efforts on making breakthroughs in scientific research. We will also deepen the integration of projects, platforms, and teams, regard major projects as the main driving force, accelerate the integration of platform resources, strengthen the construction of integrated platforms for key and core technology breakthroughs and engineering research centers under the MOE, and build multidisciplinary teams to generate great synergy. We will also upgrade the evaluation system, strengthen the guarantee of policy resources, and establish an evaluation mechanism that is compatible with the organized scientific research model, especially the contribution- and quality-orientated evaluation mechanism on landmark achievements. At the same time, we will ensure the allocation of educational and scientific resources, such as the talent planning and graduate enrollment programs, favors major scientific research tasks. 

To make breakthroughs in key and core technologies, we should not only make vigorous efforts but also create a great synergy, which means enhancing industrial application of such technologies and generating new momentums of high-quality development in various industries. We will actively reach out to industries and enterprises, put enterprises at the forefront of our scientific research, send good teachers and students where they can put their knowledge to real use, transform technology into products, turn products into industries, and turn the potential of scientific research and innovation in colleges and universities into real productive forces to promote the high-quality development of industries so as to create a new prospect featuring deep integration of industry, universities, and research institutes. We will carry out a new round of strategic cooperation agreements with provincial regions, conduct in-depth cooperation with relevant provinces and municipalities, actively respond to the needs of industry, enhance innovation capacity through organizational strength, better integrate into regional economic development, and become the power source of regional economic and social development.

Last but not the least, to provide high-quality talents to advance key and core technologies, we should strengthen the training of top-notch innovative talents to improve their real ability in solving complicated problems. As the old Chinese saying goes, "a sword is sharpened on a stone, and a man is tempered in bitterness." The cultivation of top-notch innovative talents should be realized through high-level innovative practices. We should abide by reality and bring teachers and students closer to the frontline of production. As I just mentioned, we should solve practical issues and produce concrete results. Hereby, I would like to share some good news with you all. This year, we have made a major breakthrough by conducting strategic cooperation with the National Natural Science Foundation of China (NSFC). We have released the funds of the NSFC on an earlier stage, further enhanced support for outstanding doctoral students, and jointly launched a pilot program to fund outstanding undergraduate students. This is a brand-new exploration in the path and method of training top-notch innovative talents. We will further implement the national strategic action for cultivating top-notch talents in basic disciplines and the plan for building core elements for cultivating top-notch innovative talents. We will also work on the establishment of the national innovation zone for the integration of science and education, accelerate the layout in areas where strategic scarcity are seen and emerging cross-cutting areas, and comprehensively improve the ability and quality of independent training of top-notch innovative talents.

Thank you.

Nanfang Metropolis Daily:

The report to the 20th CPC National Congress stated that we would advance comprehensive education reform and refine the systems for school management and educational assessments.. What measures will the MOE take to improve the educational evaluation system in the future? Thank you.

Huai Jinpeng:

I would like to invite Mr. Liu Zicheng to answer your question about educational evaluation reform.

Liu Zicheng:

I'm happy to answer this question. Educational evaluation influences the direction of education development and guides its orientation. On Sept. 28, 2020, the CPC Central Committee and the State Council issued an overall plan for deepening educational evaluation reform in the new era, making comprehensive arrangements for addressing deep-rooted problems known as the "five-only" malady, which means an overemphasis on test scores, admission into higher-level education institutions, diplomas, number of published papers and prestigious titles when evaluating students, teachers and schools. General Secretary Xi Jinping has attached great importance to educational evaluation reform and emphasized the importance of implementing the overall plan. 

The report to the 20th CPC National Congress set out new requirements for refining the educational assessment system. During the fifth group study session of the Political Bureau of the CPC Central Committee, General Secretary Xi Jinping further stressed the need to deepen the reform of educational evaluation in the new era and build a world-class evaluation system that features multiparty participation and conforms to China's reality. Since the overall plan was issued, the MOE has worked with other relevant departments to take a series of measures to resolve the "five-only" malady. Overall, we have gotten off to a good start in educational evaluation reform. Substantial achievements have been made at the current stage, and a broad-based consensus has been reached on addressing the "five-only" malady. The system of supporting policies and institutions has steadily improved at the national level. Many regions and schools have developed many successful experiences and practices. China's educational evaluation reform has also had a significant international impact.

In the new era and on the new journey, our work enters a crucial period during which we must further promote educational evaluation reform and make more substantive progress. Next, to build China's strength in education, we will destroy the old and build the new, focusing on the latter. We will pursue educational evaluation reform as the initial step, and then promote reform in a coordinated manner in the ways students are cultivated, in the modes schools are run, and in the management system and support mechanisms. All these will boost our vitality and add fresh impetus to accelerating efforts to build a leading country in education. To be specific:

First, we will make greater efforts to raise public awareness. We will guide people to establish a scientific outlook on talent, personal careers, and education in the whole society and reverse the utilitarian trend in education. Second, we will improve supporting policies and establish a sound educational evaluation system covering all academic stages and education types. This will help remove the last crucial hurdle in the reform process. Third, we will follow role models and give full play to community-level reform and innovation as a new fountain of strength. We will also effectively carry out pilot reforms and intensify publicity to promote the good experience of models. Fourth, we will strengthen supervision and rectification. Greater efforts will be made to supervise and monitor any violations of the overall plan. Violators will be urged to rectify their problems in time. By doing so, we will ensure that all the directives are executed without fail. Fifth, we will nurture a sound environment that features equal opportunities, favorable public opinion, harmonious families, and a culture of integrity and trustworthiness. This will create favorable conditions for the smooth and steady progress of reforms.

Thank you.

Chao News:

I've noticed that there have been some recent reforms in the field of vocational education, such as the construction of municipal industry-education alliances and actions to promote industry-education integration. Are there any specific plans for the future of vocational education? Thank you.

Wu Yan:

The CPC Central Committee and the State Council have attached great importance to vocational education. The report to the 20th CPC National Congress made it clear that we should promote collaborative innovation in vocational education, higher education, and continuing education. It emphasized the importance of promote integration between vocational education and general education, between industry and education and between science and education, thus positioning vocational education as a distinct category within the educational system. It pointed out the direction for vocational education reform in the future. At the end of last year, the General Office of the CPC Central Committee and the General Office of the State Council issued a guideline to deepen the reform of a modern vocational education system. The guideline made it clear that at present and for some time to come, vocational education reform is primarily about developing a modern vocational education system. Our main tasks can be summarized as "one priority, two major respects and five focuses."

"One priority" means the MOE and relevant provinces will jointly explore new development models of modern vocational education that suit specific provinces. Provincial-level regions will be encouraged to foster their own development strategies in line with major national strategies and local industrial development requirements, and establish modern vocational education systems that conform to local conditions. By doing so, they will foster an enabling mechanism and environment for vocational education development.

As for the two major aspects, the first is to focus on regions. Based on industrial parks, we will integrate high-quality resources, promote various entities' deep participation into the operation of vocational schools, and foster a city-wide industry-education integration system featuring talent training, scientific and technological innovation and entrepreneurship, and facilitating high-quality industrial economic growth. This means making vocational education reforms at the city level. The second is to focus on industries. As the chain heads, some enterprises will lead the integration of the upstream and downstream resources and work with schools and scientific and research institutions to build a number of cross-regional industry-education integration communities featuring complementary advantages, resource sharing, joint cultivation, collaborative innovation, and integrated development.

The five focuses of the vocational education are as follows. The first is to improve the key school-running capabilities of vocational schools, optimize the setting of majors centering on the development of key regional industries, and develop core courses, core textbooks, core practice projects, and a core teacher team for vocational education. New methods, technologies, and processes will be introduced in a timely manner into education and teaching, and digital empowerment will be leveraged to constantly improve the ability to cultivate talents and quality of the talents. The second step is to better develop a teacher team, establish a contingent of teachers strong in both theory and practice, constantly improve the teacher cultivation and training system, and open up the two-way flow channels of school and enterprise personnel, building a contingent of teachers strong in both theory and practice and in line with the development of vocational education. The third step is to construct an industry-education integration practice center. We will align with the forefront of industrial development and establish a number of open regional industry-education integration practice centers that combine teaching, social training, real production, and technical service functions. The centers will serve students in internship and practice training and provide scenes for enterprise staff training, technique transformation, and technological research and development. The fourth is to expand the channels for students' growth and development, further integrate the vocational and general education, and promote vocational education at different levels, thereby developing a vocational education system characterized by vertical penetration and horizontal integration. Fifth, mechanisms for international vocational education exchanges and cooperation should be innovated, and "bringing in" and "going global" be coordinated, which indicates bringing in high-quality overseas vocational education resources while encouraging those involved in domestic vocational education to partake in overseas exchanges and cooperation. A number of projects, such as Luban Workshops and Silk Road Schools, have exerted important influence in the countries along the Belt and Road. We should deploy such good projects in more Belt and Road countries and strive to develop vocational education standards, teaching resources, and teaching equipment with international influence so as to better serve the internationalization of Chinese enterprises. At the same time, this will also cultivate a large number of high-quality and skilled technical talents for the countries along the Belt and Road and improve the quality of vocational education and talent training in these countries. Thank you.

China News Service:

General Secretary Xi Jinping stressed the need to improve the strategy of educational opening up, and put equal emphasis on introducing overseas educational resources and going global, and that the brand building of "studying in China" should be vigorously promoted. How does the MOE view the situation of educational opening-up? What are your main considerations? Thank you.

Liu Zicheng:

I am glad to answer this question. Opening up and cooperation is the sure path to build China's strength in education. The CPC Central Committee, with Comrade Xi Jinping at its core, has attached great importance to the opening- up of education. Since the 18th CPC National Congress, General Secretary Xi Jinping has announced on many major domestic and international occasions that China will continue to open up its educational sector and underlined that promoting education modernization requires consistent efforts to advance opening-up and enhancement of inclusiveness, mutual learning and interconnectivity between countries. In a speech delivered at the fifth group study session of the Political Bureau of the CPC Central Committee, General Secretary Xi Jinping again made important deployments on educational opening-up, providing fundamental guidance in this regard for a new era.

Under the arrangements and deployments of the CPC Central Committee and the State Council, the MOE has actively advanced education exchanges and collaboration between China and other countries and made positive progress. The overall layout of China's educational opening-up has been consistently improved, the building of opening-up hubs has vigorously accelerated, and educational reform has constantly played a bigger role in advancing educational opening-up. China's participation in global educational governance has been continuously deepened, and remarkable achievements have been secured in Sino-foreign educational cooperation, as well as people-to-people communications. I will share with you some data. First, China has signed agreements for mutual recognition of academic qualifications and degrees with 58 countries and regions. Second, China has conducted Mandarin teaching in more than 180 countries and regions worldwide and, accumulatively, there are nearly 200 million people outside China studying and speaking Chinese. Third, more than 1.3 million Chinese students are studying in over 100 countries worldwide. Since the 18th CPC National Congress, the number of returnees has accounted for more than 80% of those who studied abroad in the same period.

At present, the MOE is thoroughly studying and implementing the guiding principles of the speech delivered by General Secretary Xi Jinping at the fifth group study session of the Political Bureau of the CPC Central Committee. In accordance with the strategic plans made by the central authorities, we will actively integrate into and serve the new development pattern, promote educational opening-up to a higher level with wider coverage and scope, and with more initiative and flexibility, and make positive contributions to building China into an major world education center with a strong influence. Thank you.

Hong Kong Bauhinia Magazine:

Without a strong teaching workforce, a powerful education system is impossible. Building a strong teaching workforce is the most important foundational work for building China's strength in education. What are the achievements made in this regard? Additionally, what are your considerations for the next step and what measures will you take? Thank you.

Huai Jinpeng:

In education, how to enhance the teaching workforce is a matter of common concern and represents the most fundamental issue. We kindly invite Mr. Deng Chuanhuai to answer the questions.

Deng Chuanhuai:

Thank you for your questions. A great nation needs a strong education system, and by extension, a powerful teaching workforce. Teachers are the most important resource for education development. General Secretary Xi Jinping has placed significant importance on developing the teaching workforce and showed deep care for teachers and other educational workers. Throughout the years, under the strong leadership of the CPC Central Committee and the State Council, the MOE has comprehensively deepened reforms in building the teaching workforce in the new era. Both the quantity and quality of the teaching workforce have significantly improved. From 2012 to 2022, the total number of full-time teachers in China increased from 14.629 million to 18.804 million. The percentage of rural compulsory education teachers with a bachelor's degree or above has reached 76.01%. Teacher training is jointly provided by 225 normal universities and 565 non-normal universities. The personnel arrangement for faculty and staff in primary and secondary schools has met standards at the provincial, prefectural, and county level. National honors have been awarded to outstanding individuals, such as "People's Educator" title awarded to Yu Yi, Wei Xinghua, and Gao Mingxuan, and the "July 1 Medal" granted to Zhang Guimei. Teachers such as Li Baoguo, Huang Danian, Zhang Yugun, Chen Liqun, Wu Rongjin, Liu Yongtan, and Wan Buyan have been recognized as "Role Model of the Times." In recent years, the political status, social standing, and professional standing of teachers have continuously improved. Teachers have devoted themselves to nurturing students. They have demonstrated a love for teaching and their students and a dedication to educating people, making significant contributions to the Party and the country's cause.

As time progresses, the status and role of teachers become increasingly prominent. To offer support in building China's strength in education, the MOE has initiated a strategic project to improve the quality of the teaching workforce, focusing on six aspects: First, we will strengthen teachers' professional ethics and conduct by combining high-level guidance with bottom-line management, establishing a common value pursuit among teachers, upholding "zero tolerance" for violations of professional ethics, and guiding teachers to exercise self-discipline and self-improvement. Second, we will launch a national plan to cultivate excellent primary and secondary school teachers in top-tier comprehensive universities, and promote science curriculum teacher training in such universities as represented by the ones involved with developing world-class universities and disciplines. Third, we will maintain that the primary responsibility of normal universities is to train teachers, implement coordinated plans to enhance the quality of teacher education, optimize policies for government-sponsored teacher education, and deepen the implementation of the targeted training plan for improving the performance of primary and middle school teachers in underdeveloped areas in China's central and western regions. Fourth, we will enhance teachers' ability of disseminating knowledge and nurturing souls, and improve the training of high-level primary and secondary school teachers. We will also reform the national training program for primary and secondary school teachers, enhance scientific literacy among them, implement digital initiatives for teacher development, and implement programs for cultivating reputable teachers and principals. We will also strengthen training of university teachers and build teaching teams at universities nationwide following the role model of Huang Danian. Fifth, we must optimize teacher management and resource allocation to address new population development trends. Focusing on the national pilot reform for improving teaching workforce in basic education, we will promote comprehensive reforms in training and recruitment, staffing, professional ranks and titles, salary and benefits, and job positions. We will adapt to the needs of small-class and personalized teaching, and optimize teaching resource allocation. Additionally, we should prioritize building the rural teaching workforce, introduce management measures for vocational school part-time teachers, deepen the reform of university teacher assessment and evaluation, and implement various plans to improve education in underdeveloped areas, such as recruiting retired good teachers and letting educational personnel work in teams to be more helpful. Sixth, we will make more efforts to ensure the welfare of all types of teachers at all levels. We will consolidate the achievement of ensuring that the average wage income of compulsory education teachers is no lower than that of local civil servants, improve policies for rural teachers' living allowances, strengthen teacher housing security, and provide transitional accommodation for rural teachers.

The general secretary has repeatedly pointed out that encountering a good teacher is a blessing in one's life while having good teachers in a school brings glory to the institution, and a nation that continuously produces excellent teachers is hopeful. The MOE is committed to implementing the decisions and arrangements made by the general secretary and the CPC Central Committee regarding building a strong teaching workforce. We will take more effective measures to build a strong teaching workforce in the new era, promote a social atmosphere of respecting teachers and valuing education, and encourage and attract more outstanding talents to be devoted teachers, really put their mind to teaching, and be willing to teach for their entire life.

Thank you all!

Chen Wenjun:

Last question, please. 

The Poster News APP:

"What do we cultivate, how do we cultivate and who do we cultivate for" are the fundamental questions in education. Fostering noble minds is crucial to building a socialist education powerhouse with Chinese characteristics. What is your latest thinking over this and what news measures are taken? Thank you.

Huai Jinpeng:

Thank you for the excellent questions. Recently, we have been implementing the important instructions of General Secretary Xi Jinping and the decisions and arrangements made by the CPC Central Committee, and formulating an outline for building China's strength in education. As we pursue the grand goal of advancing the great rejuvenation of the Chinese nation through Chinese-style modernization, we study and contemplate the role and direction of education, and we don't consider education issues just as education issues. We look at education related issues from the perspective of people's general wellbeing and the country's socioeconomic development. We also explore the important connotations of building China's strength in education by examining the inherent principles of education, talent development, and scientific and technological advancement. We contemplate how to build China's strength in education while keeping in mind the grand goal of great rejuvenation, people's general wellbeing, and the principles guiding the development of education and related areas, and we always know that the fundamental issue is to foster talents with lofty thoughts. This fundamental task is the most crucial issue in building China's strength in education.

Educational philosophy has always taken an extremely important position in traditional Chinese culture. As is known to all, Confucius put forward the concept of "education for all without discrimination" and "learning to be human." Fostering virtue and cultivating people is a crucial part of our traditional educational philosophy. The role of education in shaping social values is much more emphasized than its role in imparting knowledge and developing vocational skills. "The teacher is the one who can propagate the doctrine, impart professional knowledge, and resolve doubts." As an old saying goes about traditional culture, "it is easier to find a teacher who can impart knowledge but it is difficult to get a teacher who can teach you how to be human." The latter part of the saying illustrates the important role of teachers in cultivating students' morality and good conduct. There are also other sayings, such as, ", we can understand how we should conduct ourselves through our contact with things," "the pursuit of moral principles in daily life should be true and sincere," and, "we should rectify our mind so as to follow moral principles in daily life." All these have demonstrated the importance of educational philosophy in traditional Chinese culture. Education worldwide attaches importance to the cultivation of morality and decent values, which is also a universal principle of education. Fostering virtue and decent values has been taken as a crucial part of education throughout history and across the world. That is a significant element of Chinese culture and Chinese spirit.

We all have expectations for education; what kind of society and world we hope to live in determines the education we will choose. The core objective of China's education in the new era is to carry out the most basic task of fostering virtue through education, which is also the core issue of building a leading country in education. Our education aims to cultivate young people into those who strive to be new-era exemplary youths with ideals, a sense of responsibility, grit, and dedication. That is the call of the times and a requirement for realizing the rejuvenation of the Chinese nation. At the same time, we have also seen that society and the economy are constantly evolving and we are confronted with some problems such as imbalances and inadequacies in development. This requires education to fully carry out the most fundamental task of fostering virtue through education. Not only should we teach students how to learn and enable them to acquire knowledge but we should also help them to develop abilities and prepare them for their future life in society so that they can integrate their personal abilities with the development of society.

Huai Jinpeng:

Meanwhile, we should also teach students how to coordinate with others to resolve conflicts and problems, how to interact with other students and society, and how to coexist with their natural environment. Therefore, we see that people have many expectations for the future and are reflecting on reality and future development when faced with the changes in our times, rapid growth in knowledge, and especially the accelerating evolution of the technological revolution and industrial transformation. As a result, the task of fostering virtue and education is to enable students to understand society, themselves, and communication among people. At the same time, it is also very important to achieve inclusiveness, understanding, and development through exchanges and cooperation among different cultures in contemporary society. Thus, there are more tasks for education nowadays than ever before. However, fostering virtue and decent values is the core tasks among them, which is also what General Secretary Xi Jinping has repeatedly stressed. That is, we should take nurturing a new generation of capable young people who will fully develop socialism and carry forward the socialist cause as the core issue of education. From this perspective, education is of critical importance to the future of our country and our Party.

The MOE has all along taken every effort to carry out the basic task of fostering virtue through education and has for the first time this year set up major projects and special actions in research and practice. Just now, Mr. Wu talked about the "9+9" projects of the MOE, among which are the "project for developing grand ideological and political courses" and the "project for forging the inner strength of the new generation of young people." They are two systematic practices with distinctions and interconnections. In the development of the "grand ideological and political courses," we will focus on the design and teaching of the course "Introduction to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era." We will deepen the comprehensive reform of different types at different levels and integrate the political education curriculum across all levels, from elementary schools to universities. We will continue to upgrade the teaching and research system for ideological and political courses and carry out actions to enhance the abilities of teachers. With all these efforts, we will make an effective improvement in work systems, competences, and the quality of the "grand ideological and political courses." 

The "project for forging the inner strength of the new generation of young people" is to launch 10 special campaigns focusing on raising students' level of understanding of thoughts and theories and improve their mental health and personality. Due to time limits, I will not introduce them one by one. We hope to establish a batch of major leading platforms and demonstration bases and launch a group of quality projects. We will guide officials and teachers to closely connect and fully interact with students and jointly analyze the laws of growth of students and the development of education as well as better integrate them in practice. We will address the major topic of integration and integrate fostering virtue through education into practice. Education should not only have theories and methods. More importantly, it should give priority to action. Through the effective integration of knowledge and action, we will teach students based on practices so as to achieve the cultivation of virtue and decent personality in students. That is our greatest aim.

We will give priority to promoting these two projects in the education system. However, education is a complete process and it is a system. We will pursue an education system that will foster sound moral grounding, intellectual ability, physical vigor, aesthetic sensibility, and the work skills of students. We'll also launch the program to strengthen students' physical health, improve their aesthetic abilities, and cultivate their habits for physical work. And we will integrate moral education into physical and aesthetic education and physical work in practice to enable students to learn about society and practice through personal experience. For instance, the MOE has organized social practices for students to engage in and experience the three-year fight against COVID-19. We have advanced medical students who are participating in social practice programs at the community level in areas, such as old revolutionary base areas. After graduation, these students go to mountainous areas to experience the environment and future development and combine their work with social practices. The social practice program has been organized relating to poverty alleviation, enabling students to learn from social practice so that they can feel the changes and the needs of social development and realize the importance of contributing to society and improving their abilities. Therefore, by developing an education system that will foster sound moral grounding, intellectual ability, physical vigor, aesthetic sensibility, and the work skills of students, we hope to carry out the fundamental mission of fostering virtue and better accomplish the critical goal of cultivating people. 

Just now, Mr. Deng mentioned that we should strengthen the ranks of teachers in education and make teachers one of the most respectable occupations. In prioritizing the development of education, China will not only give priorities to education in terms of resource allocation and policies but also foster public respect for teachers and public support for education so as to enable teachers to better serve the mission of cultivating people and address the eternal topic of fostering virtue through education. I believe that with the changes of the times and the development of education, in response to the eternal question of fostering virtue and decent personality which concerns people's growth and development, we will continue to improve our work and abilities and work together to give full play to the role of learning in cultivating people and serving practical purposes. With all these efforts, we will develop education that meets people's expectations and make the whole of society respect teachers and support education so as to shoulder the great mission of Chinese modernization and the rejuvenation of the Chinese nation. Thank you for your questions.

Chen Wenjun:

Thank you, Mr. Huai. Thanks to all the speakers and friends from the media. Today's briefing is now concluded. Goodbye!

Huai Jinpeng:

Thanks to friends from the media. We are inspired by your attention, understanding, and support for education, and we are driven forward by your expectations for the future development of education. Thank you all.

Translated and edited by Wang Yiming, Wang Qian, Zhang Jiaqi, Zhang Rui, Lin Liyao, Li Xiao, Zhu Bochen, Yuan Fang, Liu Caiyi, Huang Shan, Zhang Tingting, Yang Xi, Yan Bin, Qin Qi, Liu Sitong, Ma Yujia, Xu Xiaoxuan, Wang Yanfang, Xu Kailin, Li Huiru, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Ms. Jiao Hong, commissioner of the National Medical Products Administration (NMPA)

Mr. Xu Jinghe, deputy commissioner of the NMPA

Mr. Zhao Junning, deputy commissioner of the NMPA

Mr. Huang Guo, deputy commissioner of the NMPA

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 5, 2023

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 18th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Ms. Jiao Hong, commissioner of the National Medical Products Administration (NMPA), to brief you on strengthening drug regulation to ensure drug safety for the public and to take your questions. Also joining us today are Mr. Xu Jinghe, deputy commissioner of the NMPA; Mr. Zhao Junning, deputy commissioner of the NMPA; and Mr. Huang Guo, deputy commissioner of the NMPA.

Now, I'll give the floor to Ms. Jiao Hong for a brief introduction.

Jiao Hong:

Ladies and gentlemen, friends from the media, good morning. I'm very glad to have such an opportunity to meet you here. First of all, on behalf of the NMPA, I would like to express my gratitude to friends from all sectors and the media for your support in advancing drug supervision. Today, my colleagues and I will speak with you about strengthening drug regulation to ensure drug safety for the public.

As we all know, drug safety is of paramount importance, as it directly impacts people's health, life and well-being, as well as the economic development and social harmony of our nation. Since the inception of the NMPA, we have firmly implemented General Secretary Xi Jinping's vital instructions on drug supervision. We have fully aligned ourselves with the major decisions and plans of the CPC Central Committee and the State Council. With a people-centered development approach, we have fully implemented the "four most stringent" requirements (most rigorous standards, strictest supervision, most severe punishment, most serious accountability), and prioritized safety while driving progress. We have continuously deepened the reform of the drug and medical device review and approval system, and strengthened quality supervision throughout the life cycle of drugs. This ensures overall stability in drug safety, propelling our country's transition from a big pharmaceutical nation to a strong pharmaceutical powerhouse, safeguarding and promoting public health.

First, we are committed to strictly preventing risks and effectively maintaining the overall stability of drug safety. We revised the Drug Administration Law and formulated the Vaccination Administration Law, and implemented a robust drug information traceability system. Additionally, groundbreaking reforms have been achieved in the management of vaccines. In 2022, our national vaccine regulatory system passed the third assessment of the World Health Organization (WHO), reflecting the active contribution of Chinese vaccine products to global public health. Special efforts were made to rectify drug safety issues, imposing severe penalties for violations of laws and regulations. Furthermore, we intensified supervision on key products, including those selected in the national centralized procurement process, and continuously improved quality control throughout their life cycle. Thanks to strengthened supervision, the overall pass rate of national drug sampling inspection has risen impressively from 97.1% to 99.4% over the years.

Second, we adhere to innovation-driven approaches to serve and support the high-quality development of the pharmaceutical industry. The review and approval system for drugs and medical devices has been orderly promoted, with an optimized review and approval process, leading to numerous innovative drugs and medical devices being approved for market. Over the past few years, we have approved a total of 130 innovative drugs and 217 innovative medical devices. In the first half of this year, 24 innovative drugs and 28 innovative medical devices were approved for market, effectively meeting the healthcare needs of the people. We implemented the decisions and deployments of the CPC Central Committee and the State Council, issuing the Opinions on Facilitating the Inheritance, Innovation and Development of Traditional Chinese Medicine. Additionally, we promoted the establishment of a review technical standard system tailored to the characteristics of traditional Chinese medicine, resulting in the approval of 31 new traditional Chinese medicines and supporting the inheritance and innovative development of traditional Chinese medicine. We have also made significant progress in the quality and efficacy consistency evaluation of generic drugs, with 615 varieties passing the evaluation, further meeting the people's demands for medicine.

Third, we insist on building a solid foundation and comprehensively strengthening drug supervision capacity. We put into action the Implementing Opinions of the General Office of the State Council on Comprehensively Strengthening the Capacity Building of Drug Supervision to promote scientific, legal, international and modern drug supervision. We completed the formulation and revision of key regulations, including the Drug Administration Law, Vaccination Administration Law, Provisions for Supervision and Administration of Medical Device Distribution, and Provisions for Supervision and Administration of Cosmetics. Additionally, we issued 13 regulations and promulgated and implemented the 2020 Chinese Pharmacopoeia. As a result, the drug supervision system and standard system have been substantially established. To support nationwide regional development strategies, we established four drug and medical device review and inspection sub-centers in the Yangtze River Delta and the Greater Bay Area. Moreover, we implemented the Opinions on Establishing a Team of Professionalized and Specialized Drug Inspectors. The provincial drug inspection teams now have more than 20,000 members, further strengthening the foundation of drug supervision. We comprehensively enhanced international exchanges and cooperation, and the NMPA continuously gained more say and influence internationally.

Ladies and gentlemen, over the past five years, remarkable development and progress has been made in drug supervision, largely due to the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and the scientific guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. This year marks the first year of fully implementing the guiding principles of the 20th CPC National Congress. The NMPA will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and take the opportunity of in-depth themed education to fully implement the guiding principles of the 20th CPC National Congress. We will earnestly implement the "four most stringent" requirements and follow the working philosophy of "being politically aware, strengthening supervision, ensuring safety, promoting development and benefiting people's livelihood" to effectively ensure drug safety for the people and strive to establish a modern drug supervision system with Chinese characteristics.

Next, my colleagues and I will address your questions. Thank you.

Xing Huina:

Thank you for your introduction, Ms. Jiao. The floor is now open to questions. Please identify the media outlet you represent before raising your questions.

CCTV:

Since the reform of the evaluation and approval systems for medicine and medical equipment, the pharmaceutical industry has seen significant innovation progress. Can you discuss the research and development of innovative medicine and medical equipment, as well as their market entries in recent years? Going forward, what policies will be implemented to support innovation, and in which areas will you focus on encouraging innovation and development?

Jiao Hong:

Thank you for your questions. I will answer them. In recent years, the NMPA has deepened the reform of evaluation and approval systems for medicine and medical equipment. It has also rolled out supportive policies to encourage innovation. As you said, judging from the number of drug and medical equipment applications received and approved, including those in the first half of the year, we can see China's robust achievements in innovative medicine and medical equipment. Encouraging innovation is the core of reforming evaluation and approval systems for medicine and medical equipment. In recent years, we have revised and made supporting regulations, including registration management regulations for medicine and medical equipment, and continuously harnessed the policy's benefits. More than 100 medicine products are approved each year through prioritized evaluation procedures. In recent years, by optimizing resources, priority in terms of evaluation has been given to new medicine products that are in urgent clinical need and have proven clinical value. These products include pediatric medications and orphan drugs. Take pediatric medication, which is of significant public concern, for example. In recent years, we have stepped up efforts to revise and make regulations on pediatric medication. A total of 66 pediatric medications were approved to enter the market last year, and 46 pediatric medications were evaluated in the first six months of this year. We have channeled resources to new medicines of proven clinical value as well as medicines and medical equipment in urgent clinical need to promote their market entry. These measures have further encouraged innovation and boosted the high-quality development of biomedicine.  

The report to the 20th CPC National Congress systematically expounded on accelerating the establishment of a new development paradigm and redoubling efforts for high-quality development. As we all know, the medical industry is a vigorous industry with a promising future. In recent years, the NMPA has enhanced efforts in China's drug regulatory science action plan, through which drug regulatory work would be more science-based and forward-looking. I will briefly introduce the measures we have taken to encourage innovation. Going forward, we will further consolidate and enhance the development achievements of reforming the evaluation and approval systems. 

First, we will further intensify our work on enterprise R&D and innovation. For example, we will improve evaluation and approval procedures for conditional market applications and ensure science-based, strict, procedure-based, and efficient drug evaluation work. Meanwhile, we will further optimize the approval of drugs in urgent clinical need, medical equipment, pediatric medication, orphan drugs, the domestic counterparts of imported drugs, as well as products of core and key technologies. We will prioritize evaluation work and improve the mechanism by integrating research and evaluation. We will step up efforts to make technical guidelines and enhance guidance and services for enterprises' product R&D.

Second, we have constantly advanced the consistency of generic drug evaluation work to ensure quality and efficacy on par with the original drugs. We will continue releasing reference product catalogs and improving relevant technical guidelines. Based on trial work on oral solid preparations and injections, consistency evaluation of other types of generic drugs will be steadily advanced. 

Third, we will encourage R&D, as well as the application of radiopharmaceuticals, and reform and improve the evaluation and approval process for these substances. We will make full use of radiopharmaceuticals' role in diagnosing and treating malignant tumors, and cardiovascular and cerebrovascular diseases, in a bid to improve China's capabilities in the research, development, and application of radiopharmaceuticals.

The last point concerns the management of drug package inserts, which is of interest to many. We will advance pilot programs to introduce senior-friendly package inserts so seniors can see them. We will choose some orally-taken drugs and externally-used drugs commonly used by seniors and require drug developers to provide simplified package inserts with larger font sizes. Enterprises will also be encouraged to provide speech synthesis and braille services. Thank you.

Cover News:

Recent years have seen the fast development of the new industrial form of online sales. Problems emerge as online pharmacy sales bring convenience to people. What are key measures to strengthen security supervision for online medicine, medical equipment, and cosmetics sales? Thank you.

Huang Guo:

Thank you, I will address it. That's a good question. As you pointed out, the development of online sales for medicine, medical equipment and cosmetics has accelerated. According to estimates, the online sales volume of medicine and medical equipment reached 292.4 billion yuan in 2022. It is projected to surpass 350 billion yuan in 2023, suggesting a huge market. The NMPA has planned and taken a series of measures to improve the convenience of online purchases and the quality and security of medicines sold online. These measures primarily fall into the following three aspects. 

First, we have improved law-based governance. It is important to know that the internet is not beyond legal jurisdiction. We have promptly established and refined a system of laws and regulations to tackle newly emerged problems. As of now, we have rolled out specialized measures for the administration and supervision of online sales of medicines, medical devices, and cosmetics. These primarily clarify the legal liabilities of supervisory departments, businesses, and third-party platforms, strengthening regulations on online sales monitoring and case handling, highlighting relevant security risk control measures, and enhancing quality control throughout the whole process of online sales. Currently, drug regulatory departments at all levels are enhancing the publicity and implementation of these regulations, further improving supporting policies, and urging involved enterprises to fulfill their legal obligations in accordance with the law.

Second, we have strengthened cyberspace governance. Given that illicit online sales activities are not easy to uncover or track, we have promptly established a mechanism leveraging the strength of the internet for cyberspace regulation, and explored quick respond measures, thus to identify and eliminate potential security risks in online sales in no time. At present, we have achieved comprehensive online monitoring of online sales businesses and major third-party platforms. Moving forward, we will continuously strengthen monitoring and carry out relevant work in a more targeted, accurate, and timely manner. Addressing prominent issues, drug regulatory departments have conducted campaigns to rectify inappropriate practices in online sales of medicines, medical devices, and cosmetics. We promptly follow up leads to investigate and deal with illicit behaviors. We have also implemented a series of measures, such as removing faulty products, closing involved online stores, and revoking the registration of involved enterprises, to further sanitize the online marketplace. As you may have noticed, we have also publicly disclosed two batches of typical cases involving illegal online drug sales to reinforce the warning and deterrent effect, and resolutely crack down on various forms of unlawful online conduct.

Third, we have encouraged co-governance. We have strengthened interdepartmental cooperation, creating a regulatory synergy by promoting collaboration with the Ministry of Industry and Information Technology, Cyberspace Administration of China, National Health Commission, and State Administration for Market Regulation. We harnessed the role of industry associations, established and improved industry norms, and strengthened industry self-regulation. We also encouraged the proactive involvement of media outlets and consumers to build a joint management network throughout the whole society. Hereby, I would like to emphasize that third-party platforms fulfilling their governance responsibilities is critical to improving the quality of online sales and fostering a sound ecosystem for this industry. Notably, major platforms such as Alibaba, JD.com, Meituan, Pinduoduo, and Xiaohongshu should take the lead in implementing platform responsibilities, make full use of their own technological and management advantages, intensify the legal qualification audit and management of their merchants, strengthen cooperation obligations in product recalls, risk disposal, and supervision and inspection, and collaborate with relevant departments to conduct relevant work. I believe that this is the only way for us to collaboratively achieve systematic management and comprehensive governance of online medicine sales.

Thank you. 

Hong Kong Bauhinia Magazine:

Over the past few years, China's medical equipment industry has developed rapidly, with multiple high-level medical devices achieving self-reliance. What measures will be taken to promote the high-quality development of this industry? Thank you.

Jiao Hong:

Thank you for your question. As many of you may have noticed, China's medical equipment industry is currently in a stage of rapid development. Mr. Xu will elaborate on this question.

Xu Jinghe:

Thank you for your question. The CPC Central Committee and the State Council have attached great significance to the innovative development of the medical equipment industry. As General Secretary Xi Jinping has repeatedly emphasized, it's necessary to quickly address weak links in China's high-end medical equipment, make breakthroughs in key and core technologies, and tackle bottlenecks in technology and equipment, to achieve self-reliance and independence in this area. To effectively implement General Secretary Xi Jinping's important instructions, promote the innovative and high-quality development of the domestic medical equipment industry, and better meet people's increasing demand for high-quality healthcare services, the NMPA has mainly concentrated efforts on the following areas of work.

First, we have improved the top-level design and promoted interdepartmental collaboration. The NMPA has jointly issued the "14th Five-Year Plan for National Drug Safety and High-Quality Development" with multiple departments, which clarified the overarching principles, goals, and tasks to promote the high-quality development of the medical equipment industry. We have also jointly issued other documents, including the "14th Five-Year Plan for Medical Equipment Industry Development," with the Ministry of Industry and Information Technology and the National Health Commission to create policy synergy. Furthermore, we have taken the lead in establishing two technological innovation cooperation platforms pertaining to artificial intelligence medical equipment and medical biomaterials, accelerated the transformation and application of scientific and technological achievements in the field of medical equipment, helped to implement an open competition mechanism to select best candidates to undertake key research projects, focused on cutting-edge areas, and made overall plans in advance.

Second, we have further explored how to conduct regulatory work soundly and continually innovated review measures. We launched an action plan to promote regulatory science in medical products administration. Focusing on the frontier areas of technology and regulation, we developed new tools, standards, and methods for medical equipment regulation. We've also established a working mechanism that features early intervention by technical review in the research and development stage. This allows us to provide guidance on advanced medical devices such as ECMO, particle therapy systems, and ventricular assist systems at an earlier stage, accelerating breakthroughs in key and core technologies and driving the overall development of this sector.

Third, we have encouraged innovative medical devices to enter the market and promoted the industry's high-quality development. In recent years, the National Medical Products Administration has focused on innovative medical devices. It has successively issued the Special Review and Approval Procedures for Innovative Medical Products and Priority Approval Procedures for Medical Products so that both innovative products and those meet the urgent needs of clinical treatment can be prioritized and approved efficiently. To date, 217 innovative high-end medical devices, including domestically produced brain pacemakers, carbon ion therapy facility, proton therapy facility, magnetic resonance imaging system, panoramic dynamic PET/CT, third-generation artificial hearts, and artificial blood vessels, have been approved for market launch. This has achieved a breakthrough in the domestic production of high-end medical devices and overcome the challenge where some products were heavily dependent on imports. Most of these products have been used in our current clinical diagnostics and treatment, achieving good results and improving the level of medical diagnosis and treatment.

Next week, we will host the 2023 Medical Device Safety Promotion Week. During that week, we will hold a meeting to discuss the achievements of innovative medical devices. Everyone is welcome to sign up.

With the continuous implementation of various support policies, the medical device industry in China has grown rapidly in recent years, maintaining an average annual compound growth rate of 10.54% over the past five years. It has become the world's second-largest market for medical devices, with increasing industry clustering and international competitiveness. In the next step, the National Medical Products Administration will continue to follow the progress of innovative medical device development, constantly summarizing new experiences, exploring new rules, and introducing new measures. We will approve more and better innovative high-end medical devices for market launch, contributing to the historic leap from a "major medical device producer" to a "strong medical device producer" and enhancing the ability to meet public wellbeing requirements and improve overall satisfaction. Thank you.

Cnr.cn:

In recent years, medicines for rare diseases have received significant attention. What measures the National Medical Products Administration has taken to encourage innovative research and also the production and supply of medicines for rare diseases? Thank you.

Jiao Hong:

Thank you for your question. Rare disease patients are indeed a group that requires special attention and care, and the management of their medicines is also one of the key areas of focus for the National Medical Products Administration. Now, I will ask Huang Guo to provide more detailed information on this matter.

Huang Guo:

Indeed, we are more confident when the media expresses concern. The inquiries from the media also reflect the general public's awareness and support for treating rare diseases.

As we all know, the prevalence of rare diseases is low. Therefore, the research and development of medicines for these diseases is very challenging, and the market size is small. However, when it comes to every family and each patient, medicines for rare diseases are often lifesaving and cannot be ignored. Therefore, we believe that every medicine for a rare disease deserves our utmost effort.

In recent years, the National Medical Products Administration has seized the opportunity of deepening reforms to the evaluation and approval of medicines, and made significant efforts to accelerate the approval of medicines for rare diseases, striving to provide more options for patients suffering from these illnesses. Due to time constraints, I will primarily introduce two measures.

On the one hand, unleashed policy dividend has sped up the research and development of rare disease medicines. Since 2018, we've provided a special channel in the evaluation and approval link for medicines which are already available in overseas markets and in urgent need for clinical use, including those for treating rare diseases. Under this policy, we've established a specific waiting list, encouraged application of those medicines and expedited their review and approval process. Statistics show that 23 new rare disease medicines have been approved for import and domestic marketing via this special channel. In 2020, we further streamlined the priority review and approval procedure, including new rare disease medicines with significant clinical outcomes into the priority review program. Currently, among all drug marketing applications, the review and approval time for rare disease medicines is the shortest.

On the other hand, we've strengthened technical guidance for enterprises to take fewer detours. Given the exceptionally low incidence of individual rare diseases, the challenges of drug research significantly exceed those of other common diseases. We have provided special policy preferences for new rare disease medicines. Our drug evaluation and approval agency has conducted early participation, interconnected research and evaluation, and provided a full range of services. We've established a special review team to follow up on the research and development of new medicines for rare diseases. Enterprises are allowed to submit research materials on a rolling basis, and a seamless connection mechanism has been established in key phases such as communication, inspection and testing, and comprehensive evaluation. These practices have greatly improved the quality and efficiency of new drug development for rare diseases. We've developed a series of technical guidelines, such as Technical Guidelines for the Clinical Research and Development of Drugs for Rare Diseases and Statistics Guidelines for the Clinical Research and Development of Drugs for Rare Diseases, to guide enterprises in tailoring their approach to the characteristics of rare diseases, promoting flexible designs while maintaining scientific rigor. We encourage them to obtain scientific evidence by making good use of limited patient resources so as to advance clinical research and development.

Through comprehensive measures, China has improved in both the number and speed of rare disease medicine approvals in recent years. To give you some figures, since 2018, China has approved 68 imported and domestically produced drugs for rare diseases. Going forward, the National Medical Products Administration will continue to focus on the needs of rare disease medicines. While ensuring the safety, efficacy, and quality of medicines on the market, we will expedite the evaluation and approval of rare disease drugs, striving to slow the progression of rare diseases and enhance the quality of life for patients.

Thank you!

The Poster News APP:

Last year, the NMPA launched a special campaign to guarantee drug safety and released a slew of typical cases. At present, what's the drug safety situation in our country? What are the priorities for strengthening drug safety supervision in the next step? Thank you.

Jiao Hong:

Thank you very much for your concern. We all know that we should hold the bottom line to guarantee security and pursue the superior line to promote development. Security is the prerequisite and foundation of development. Here, Mr. Xu will give you more information on this topic.

Xu Jinghe:

Thanks for your concern. Since 2022, the NMPA has earnestly implemented General Secretary Xi Jinping's important instructions on drug safety and launched a one-year thorough campaign to guarantee drug safety following the four most rigorous standards. Last year, 153,600 criminal cases related to medicines, cosmetics, and medical equipment were investigated and punished, and those suspected of committing crimes were promptly transferred to public security organs for investigation according to the law. The NMPA released four batches of 32 typical cases and gave particular supervision over the handling of 29 major cases related to medicines and medical equipment together with the Ministry of Public Security (MPS) and the Supreme People's Procuratorate (SPP) so as to use the cases to explain the law and provide warnings, which effectively ensured the overall stability of the drug safety situation.

In order to constantly and deeply implement General Secretary Xi Jinping's important instructions on drug safety and the deployment and requirement of the education campaign, we summed up our experience of the special campaign on drug safety and carried out another one-and-a-half-year upgrading activity on drug safety this June, focusing on preventing risks, investigating and handling cases, and improving capabilities. By doing so, we have strived to maintain a stable and positive situation in the field of drug safety and resolutely safeguard the health rights and interests of the people. The upgrading activity mainly includes the following three aspects.

The first aspect involves a comprehensive investigation and diffuse of potential risks. We adhere to risk management and keep regulation ahead of risks. First, we guarantee drug safety at the source. We strictly control market access, strengthen the connection between acceptance, inspection, examination, approval, and other sectors, urge enterprises to implement the main responsibility of quality and safety, and help them further enhance the awareness of compliance, the rule of law, and risk. Second, we improve the pertinence, targeting, and effectiveness of our risk and hidden danger investigations. We focus on key products, key links, key objects, and key areas and thoroughly investigate risks and hidden dangers through multi-channel and multi-dimensional measures. Third we resolve safety risks according to the law in a timely manner. For enterprises with high risk or that have been found to have more problems previously, we increase on-site supervision, including unannounced and secret inquiries and inspections, and endeavor to provide more effort to rectify illegal behavior in key areas, such as medical beauty drugs and medical devices.

Second, we crack down on violations of laws and regulations. We have continued to intensify the investigation and handling of illegal cases so that those who violate the law will pay the due price. First, we constantly promote the investigation and handling of illegal cases. We punish both illegal enterprises and the persons in charge, improve the system of supervision of major cases handling, expose typical cases, and release the names of those who partake in illegal and dishonest practices to the public. Joint punishment, industry banning, barred hiring, and other punitive measures have been taken. Second, we constantly strengthen coordination. We increase interconnection among state, provincial, municipal, and county-level drug regulatory departments to eliminate regulatory blind spots and regions. Third, we intensify trans-departmental investigations and case handling. We work with public security organs, procuratorial organs, and people's courts to improve the system to connect administrative law enforcement with criminal justice, further strengthen the linkage between relevant departments, and establish and improve our trans-departmental risk consultation system.

Third, we continuously improve supervision capability. We comprehensively strengthen our supervision capabilities on drug safety and vigorously improve the supervision efficiency. First, we have strengthened institutional building. We have accelerated making and amending relevant laws and regulations and promote the revision of the applicable rules for the administrative punishment of cases relating to medicine. Second, we constantly optimize the supervision system. We perfect the quality management system for drug inspection, promote the integration of inspections and audits, and improve the pharmacovigilance system and its capacity, as well as issue guidelines on accelerating the smart regulation for drug safety at the provincial level. Third we lay a solid foundation for grass-roots supervision. We strengthen the drug supervision force in municipal and county-level market supervision departments and enhance professional law enforcement capabilities. We also actively increase the employment of township drug safety coordinators and drug safety information staff in villages, investigate and defuse rural drug safety risks, and intensify the investigation and handling of rural drug safety cases so as to pragmatically strengthen township and rural drug supervision. Thank you.

Southern Metropolis Daily:

What has the NMPA done in recent years to promote TCM's inheritance and innovative development, and what has been the effect? Are there any new ideas and measures this year? Thank you.

Jiao Hong:

Thanks for your questions. Promoting TCM's inheritance and innovative development is part of the NMPA's focus. Next, Mr. Zhao will provide more information.

Zhao Junning:

Thank you for your interest in our efforts to promote the inheritance and innovative development of TCM. The advancement and innovative development of TCM is a major decision made by the CPC Central Committee. In recent years, the NMPA has continued to deepen the reform of the review and approval system of TCM, while also consistently enhancing the supervision system for the entire chain and whole life cycle of TCM. It's fair to say that the supervision of TCM and the development of the TCM industry have achieved remarkable results.

First, we have accelerated the introduction of new TCM products. We fully acknowledge the unique characteristics of TCM. In February this year, we released the "Regulations on the Registration Administration of TCM," which adjusted the classification of TCM registration. This led to the creation of a new TCM registration review system that combines TCM theory, human experience, and clinical trials. Thanks to the support of these policies, the number of clinical trials, commercialization applications, and approvals of new Chinese medicines have increased in unison. Since 2018, we have approved 31 new Chinese medicines for marketing, thus meeting the public's medicinal needs.

Second, we have enhanced the standard system of TCM. The NMPA has actively established the TCM standard system with national medicine standards as the backbone, supplemented by provincial standards. We released and implemented the 2020 edition of the Chinese Pharmacopoeia, which comprises 2,711 TCM standards, including 117 new ones and 452 revised ones. For the first time, we also introduced national processing standards for TCM decoction pieces, currently covering 61 varieties. As the pilot program of TCM formula granules has been successfully completed, we have expedited the creation of TCM formula granules standards. Currently, 248 national standards have been established, and nearly 7,000 provincial standards have been filed, involving approximately 700 varieties.

Third, we have improved the assurance of TCM quality and safety. We have insisted on a problem-oriented approach. In January, we issued measures for further strengthening the scientific supervision of TCM to promote its inheritance and innovative development, amounting to a total of 35 measures. In accordance with these measures, we have significantly enhanced supervision across the entire TCM industry chain, carried out special rectification of TCM decoction pieces, and conducted special inspections of production. We have amplified supervision of production and operations, and improved the monitoring of sampling and drug reactions. Additionally, we have also urged drug marketing authorization holders to conduct post-marketing evaluations, revised and improved safety information in instructions, and severely cracked down on violations of laws and regulations. As a result, the overall qualification rate of sampling quality for TCM decoction pieces has increased from 88% in 2018 to about 97% currently, and the overall qualification rate of proprietary Chinese medicine has consistently remained stable at over 98% for a long time.

Moving forward, we will continue to further promote the inheritance and innovative development of TCM, in alignment with the decision-making and strategic deployments of the CPC Central Committee and the State Council.

First, we need to enhance research on the TCM supervision system. We should establish an evaluation and approval system that aligns with the characteristics of TCM and fosters its innovative development. By adopting measures such as integrating research and review, and providing early-stage services for innovative TCM, we need to shift from merely accelerating the back end to speeding up the entire process, thereby further stimulating new vitality for the innovative development of TCM.

Second, we need to establish a standard management system for TCM. Building on the increasingly mature TCM standard system, we've researched and issued special regulations on the standard management of TCM, focusing on constructing a comprehensive TCM standard management system. Given the unique characteristics of TCM, we should also enhance the whole-life-cycle management of TCM standards

Third, we must fully implement the action plan to consolidate and maintain drug safety. We will persist in stringent supervision without laxity and crack down on violations of laws and regulations in the TCM sector. Our goal is to normalize market competition order through impartial oversight and foster a virtuous cycle of safety within TCM.

I would like to inform you that the second national conference on TCM scientific regulation will be held in Shanghai on July 18-19. The conference will concentrate on four main themes: TCM standards, registration, safety supervision, and scientific regulations. We warmly invite our media friends to continue their coverage and support for the conference.

Thank you.

Zhejiang Daily:

China has promoted the centralized procurement of drugs, proprietary Chinese medicines, and medical devices. What actions and arrangements have been taken to reinforce quality supervision of the selected products? How is the safety and accessibility of medical devices in the procurement process ensured? Thank you.

Xu Jinghe:

Thank you for your question. The NMPA has attached great importance to supervising the centralized procurement of drugs and medical devices. In strict accordance with the principles of risk management, whole-progress control, scientific supervision, and social governance, we have fully implemented the Four Strictest requirements and ensured that pharmaceutical companies bear the primary responsibility for quality and safety issues. We have also ensured that regulatory departments fulfill their territorial obligations at all levels. Moreover, we have strived to serve the overall situation of national centralized procurement and medical reform work. 

Since the initiation of national centralized procurement, the NMPA has deployed the supervision work for selected drugs and medical devices every year. We have achieved a three-pronged coverage, including supervision and inspection of drug companies and medical device manufacturers, sampling inspections of in-production products, and monitoring of adverse drug reactions (or adverse events related to medical devices). The National Healthcare Security Administration has highly commended this work. Inspections have encompassed nearly 600 pharmaceutical companies and nearly 170 medical device manufacturers. Meanwhile, product sampling has involved 333 medicine varieties and 15 medical device varieties. This has effectively ensured the quality and safety of drugs and medical devices chosen for procurement. At the same time, we have holistically strengthened the implementation of enterprises' primary responsibilities and local regulatory duties. From the perspective of supervision and inspection, sampling inspection, and monitoring of adverse reactions (or adverse events), the quality and safety of the drugs and medical devices selected for procurement has been well-maintained.

In the next step, the NMPA will continue to increase the supervision of selected products in the national centralized procurement, strengthen risk prevention and control, and comprehensively use means such as supervision and inspection, random inspection, and the monitoring of adverse reaction (adverse event) to strengthen early-warning, early investigation and early handling of hidden risks. In terms of drugs, provincial drug supervisory and regulatory authorities will continue to be required to implement enterprise-customized policies and drug-specific files for selected drug manufacturers and holders in centralized procurement, and further strengthen targeted supervision. As for medical equipment, products selected by national centralized procurement, such as intravascular stents, artificial joints and orthopedic spine products, list management is carried out, and medical devices selected by the national centralized procurement are included in the national sampling inspection. We will continue to improve the supervision ability of drugs, develop innovative supervision approaches, strengthen smart supervision and the analysis and sharing of supervision information data for selected drugs and medical devices in centralized procurement, and continue to improve supervision efficiency through information technology to ensure product quality and safety. Thank you.

GDToday app Nanfang Plus:

Data shows that the operating income of China's pharmaceutical manufacturing industry in 2022 reached 4.2 trillion yuan. It can be said that China has now entered the ranks of big pharmaceutical countries. What innovative practices have the NMPA adopted in serving the high-quality development of the pharmaceutical industry? Thank you.

Jiao Hong:

Thank you for your question. The high-quality development of the pharmaceutical industry is a common concern to us all. I would like to invite Mr. Zhao Junning to introduce the specific situation.

Zhao Junning:

Thank you for your question. The pharmaceutical field is a highly innovative field. The report to the 20th CPC National Congress pointed out that high-quality development is the top priority of building a modern socialist country in all respects and an essential requirement of Chinese modernization. The next five years will be an important stage for new breakthroughs in China's high-quality economic development. In terms of the pharmaceutical field, China is at an important historical stage of leapfrogging from a big pharmaceutical country to a pharmaceutical powerhouse, from being dominated by generic drugs to being led by innovative ones, and from high-speed growth to high-quality development. To better achieve high-quality development of the pharmaceutical sector, in recent years, the NMPA has been committed to improving drug supervision capabilities and building a scientific, efficient and authoritative drug supervision system in the new era. The main work has been in the following aspects:

First, we have innovated the legal and technical systems. We have accelerated the improvement of the laws and regulations system and technical standards system that support the high-quality development of the industry, formulated high-quality development plans, promoted the implementation of the innovation-driven development strategy in the pharmaceutical field, prioritized the review and approval of innovative drugs and medical devices, and supported the clinical promotion and application of innovative products, in a bid to guide the high-quality development of the pharmaceutical sector.

Second, we have expedited the scientific research of supervision. Since 2019, the NMPA has closely followed the frontiers of international regulatory development, and designated more than 110 NMPA key laboratories in two batches, including well-known domestic universities and scientific research institutions, in accordance with the principles of urgent needs, classified implementation, regional coordination and rational layout. Relying on well-known domestic universities and scientific research institutions in this regard, 14 regulatory science research bases have been established. Aiming to address the key, hot and difficult issues of drug supervision, in conjunction with the NMPA regulatory science research bases, key laboratories and well-known domestic universities and scientific research institutions, we have launched and implemented two groups of 19 key regulatory science projects. At present, a "three-in-one" regulatory science innovation support system has been formed, including regulatory science bases, NMPA key laboratories, and provincial and municipal drug inspection and testing institutions. In the past four years, a total of 187 drug review technical guidelines, inspection and evaluation standards, and inspection and testing methods have been launched through regulatory scientific research, providing strong support for the scientific supervision of drugs.

Third, we have actively participated in international cooperation and coordination. The NMPA has joined organizations such as the International Conference on Harmonization of Technical Requirements for Pharmaceuticals for Human Use (ICH), the International Medical Device Regulators Forum (IMDRF) and the Global Harmonization Working Party (GHWP) and completed an application for "pre-accession" to the Pharmaceutical Inspection Cooperation Scheme (PIC/S) to create a good international environment for the high-quality development of the industry.

Next, the NMPA will take high-quality development as the key, and concentrate on the international frontier, scientific and technological innovation and the urgent needs of drug regulation by formulating and implementing a plan on comprehensively strengthening the construction of a drug regulatory scientific research system during the 14th five-year period. We will prioritize the construction of comprehensive key laboratories for drug regulatory science to comprehensively strengthen the national strategic scientific and technological strength in the field of drug regulation. We will launch the research and demonstration of the third group of key regulatory science projects, and strengthen cooperation with the industry. We will continue to develop new tools, new standards and new methods for drug supervision, promote the in-depth development of regulatory scientific research, strengthen technical support for drug supervision, continuously deepen international cooperation, promote the modernization of the drug regulatory system and regulatory capabilities, and fully promote the high-quality development of the pharmaceutical industry. 

Thank you.

Red Star News:

China has adjusted its COVID-19 prevention and control policy, now managing it with measures against Class B infectious diseases. What deployments has the NMPA made in terms of service guarantee for the new stage of COVID-19 prevention and control work and strengthening the quality supervision of COVID-19-related medicine and equipment? Thank you.

Jiao Hong:

Thank you for your question. The NMPA attaches great importance to the review and approval of drugs and medical devices and product quality supervision work involved in COVID-19 prevention and control. I would like to invite Mr. Huang Guo to provide you with the relevant details.

Huang Guo:

Thank you for your question. Since the COVID-19 outbreak, drug regulatory authorities at all levels have thoroughly implemented the decisions and deployments of the CPC Central Committee and the State Council, remained committed to putting the people and their lives first, maintained a state of readiness, adhered to a science-based approach, gone all out to guide and promote the R&D and marketing of vaccines, therapeutic drugs and other products, and spared no effort to do a good job in the quality supervision of COVID-19-related drugs and medical devices. At present, we are continuing to do a good job in related work according to changes in the COVID-19 prevention and control situation and the requirements of measures against Class B infectious diseases. I would like to introduce two aspects:

For one thing, we will continue to provide technical guidance and services for the research and development (R&D) of medicines and vaccines. We will summarize the previous emergency assessment and approval experience, continue to mobilize our best efforts, combine research and assessment, support innovation and R&D, and strive to further enrich our toolbox for combating the pandemic. Previously, the NMPA has successively approved the use or addition of indications of 15 drugs for COVID-19 treatment through a special approval procedure: six chemical medicines (four homegrown ones and two imported ones), two biological products, and three traditional Chinese medicine (TCM) drugs and four TCM prescriptions. We have also given conditional market approvals for five COVID-19 vaccines, among which three have been listed by the WHO for emergency use. Furthermore, we have given emergency approval for China's first homegrown extracorporeal membrane oxygenation (ECMO) device and 151 COVID-19 testing reagents. Next, on the basis of continuously encouraging innovation and R&D, we will urge relevant enterprises to conduct post-marketing studies in accordance with requirements. 

For another, we will continue to strengthen the quality regulation of COVID-19 medicines and medical equipment. For homegrown COVID-19 drugs, we have introduced the management requirements of implementing enterprise-specific policies and product-specific registration. We will continue to conduct supervision and inspection of all the enterprises that are producing COVID-19 vaccines with conditional market approval and for emergency use, sending inspectors to all the factories and ensuring tests for lot release. Moreover, we will continue to enhance random inspection and adverse reaction monitoring of other pandemic-related products, including medicines and medical equipment, so as to make sure that the products are safe and effective, and quality controllable. This is the main responsibility that the drug regulatory departments at all levels must constantly focus on. Thank you.

Xing Huina:

We will have one last question.

China Daily:

In recent years, a slew of laws and regulations for medicine supervision and administration have been issued. Could you brief us on the developments in the formulation, revision, and standard system construction of these laws and regulations? What important laws and regulations will be pushed forward this year? Thank you.

Jiao Hong:

Thanks for your questions. We all know that good laws are a prerequisite for good governance and that standards are significant and fundamental support for industrial development. The NMPA has attached great importance to this respect. I will invite Mr. Xu to answer this question.

Xu Jinghe:

Thanks for your question. Drug safety affects the health and lives of the general public. General Secretary Xi Jinping once proposed the "four most stringent requirements" (the most stringent standards, the most stringent supervision, the most severe penalties, and the most serious accountability) for drug safety, with the first, the most stringent standards, directing the improvement of China's legal and standard system for medicine regulation. Over the past five years and more, the NMPA has firmly implemented the major decisions and deployments of the CPC Central Committee and the State Council, stuck to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, systematically reconstructed the system of medicine supervision and administration laws and regulations, constantly improved the standard system, and upgraded and modernized the system of China's drug supervision and administration laws and regulations with the greatest efforts.

First, we have comprehensively formulated and revised the drug supervision and administration laws and regulations. China's Vaccine Administration Law, adopted in June 2019, is the world's first comprehensive vaccine administration law. The law focuses on the strategic importance and public interest of vaccines, encourages vaccine R&D and innovation, and fully ensures the quality and safety of vaccines. As Mr. Huang just said, the vaccine R&D, production, operation, and application are all going forward under the system of laws and regulations. The newly revised Drug Administration Law, adopted in August 2019, has consolidated and deepened the achievements of drug assessment and approval system reform. It stipulates comprehensively implementing the marketing authorization holder system and fully strengthening the quality control of drugs throughout their life cycle. With the release of the Regulations on the Supervision and Administration of Cosmetics and the revision of the Regulations for the Supervision and Administration of Medical Devices, the "four beams and eight pillars" of the system of medicine supervision and administration laws and regulations have been established.

Second, we have systematically improved the supporting regulations, normative documents, and technical guidelines. China has issued 13 regulations related to drugs, medical devices, and cosmetics, with nearly 40 supporting regulations covering all links in the whole process, including developing, producing, selling and using, drug, medical equipment, and cosmetics. More than 50 important normative documents have been introduced, including an early resolution mechanism for drug patent disputes, post-marketing changes in the management of drugs, clinical trial management for medical devices, and cosmetics labeling management, which has clarified the primary responsibilities of enterprises to ensure quality and safety throughout the entire life cycle in a detailed manner. Technical guidelines for the conditional market approval of drugs, clinical evaluation of medical devices, and the safety assessment of cosmetics, among others, have been issued. At present, there are 459 drug technical guidelines and 559 medical device technical guidelines, which have effectively promoted product R&D and marketing.

Third, we have constantly improved the standard systems. The 2020 Edition of the Pharmacopoeia of China came into force in 2020, forming the national drug standard system centering on the pharmacopoeia and significantly improving drug quality controls and safety. The medical device standard system has been improved and optimized, and the number of effective medical device standards has amounted to 1,937, with the degree of consistency with international standards reaching more than 90%. The standard system framework for cosmetics has been built, and the revision of cosmetics safety technical specifications has been initiated. The standard systems for drugs, medical devices, and cosmetics have continuously become more broad, systematic, and internationally coordinated.

2023 is the first year when we fully implement the guiding principles of the 20th CPC National Congress. The NMPA will continue to strengthen the system of drug supervision and administration laws and regulations, accelerate the revision of the Regulations for Implementation of the Drug Administration Law and the Regulations on the Protection of Traditional Chinese Medicines, promote the release of Provisions for the Supervision and Administration of the Quality of Drug Operation and Application, initiate the revision of Provisions for the Administration of Radioactive Pharmaceuticals, Provisions for Classified Administration of Prescription and Non-prescription Drugs, as well as other laws and regulations, and launch the compilation of the 2025 Edition of the Pharmacopoeia of China. We will enhance systematic support, advance integration and optimization, and develop a coordinated, efficient, systematic, and sound system of drug supervision and administration laws, regulations, and standards so as to better serve and guarantee the high-quality development of the pharmaceutical industry as well as better serve, protect, and promote public health. Thank you.

Xing Huina:

Today's press conference is hereby concluded. Thanks to the four speakers and friends from the media. Goodbye!

Translated and edited by Wang Yiming, Wang Qian, Liu Jianing, Zhou Jing, Qin Qi, Liu Sitong, Ma Yujia, Yan Xiaoqing, Liu Caiyi, Huang Shan, Lin Liyao, Yang Xi, Yan Bin, Yuan Fang, Xu Xiaoxuan, Wang Yanfang, Li Huiru, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Mr. Zhou Jinqiang, vice president of the Hangzhou Asian Games Organising Committee (HAGOC), vice minister of the General Administration of Sport of China, and vice president of the Chinese Olympic Committee

Ms. Zhao Sujing, vice president of the Hangzhou Asian Para Games Organising Committee (HAPGOC), and vice chairperson of the Board of Executive Directors of the China Disabled Persons' Federation

Mr. Li Yanyi, vice governor of Zhejiang province

Mr. Yao Gaoyuan, vice president and secretary-general of the HAGOC and the HAPGOC, and mayor of Hangzhou

Mr. Chen Weiqiang, executive secretary-general of the HAGOC and the HAPGOC, and vice mayor of Hangzhou

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

June 14, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning! Welcome to this press conference held by the State Council Information Office (SCIO). The 19th Asian Games and the 4th Asian Para Games will be held in Hangzhou, Zhejiang province. Today, we have invited Mr. Zhou Jinqiang, vice president of the Hangzhou Asian Games Organising Committee (HAGOC), vice minister of the General Administration of Sport of China, vice president of the Chinese Olympic Committee; Ms. Zhao Sujing, vice president of the Hangzhou Asian Para Games Organising Committee (HAPGOC), vice chairperson of the Board of Executive Directors of the China Disabled Persons' Federation; Mr. Li Yanyi, vice governor of Zhejiang province; Mr. Yao Gaoyuan, vice president and secretary-general of the HAGOC and the HAPGOC, and mayor of Hangzhou; Mr. Chen Weiqiang, executive secretary-general of the HAGOC and the HAPGOC, and vice mayor of Hangzhou. They will introduce preparations for the Games and answer questions you are interested in.

Now, I will give the floor to Mr. Zhou Jinqiang.

Zhou Jinqiang:

Good morning! Friends from the media!

The Hangzhou Asian Games will open on Sept. 23. This event is the largest-scale and highest-level international comprehensive sports event that China has held since the successful convening of the 20th CPC National Congress, drawing wide attention both domestically and internationally.

In August 2015, General Secretary Xi Jinping expressed his sincere expectations for Hangzhou by saying that he believes that the city is capable of hosting a successful Asian Games. Over the past eight years, the HAGOC has fully embraced the concept of hosting a "green, smart, economical, and ethical" Asian Games, along with the requirement of staging a "streamlined, safe, and splendid" event. They have made sound plans and organized meticulously, achieving steady progress in every phase and sector. Tomorrow marks the 100-day countdown to the opening of the Hangzhou Asian Games, and all preparation work has entered its final stretch. All units are advancing their work at a fast pace, and improvements are being made across all sectors. The preparations are generally being carried out in a steady and orderly manner. My introduction will focus on four aspects.

First, Asian countries have actively registered for the Hangzhou Asian Games, demonstrating its strong appeal.

At present, Olympic committees from 45 countries and regions in Asia have registered for the Games, with some sending their largest-ever delegations. This indicates that athletes from Asian countries and regions have high expectations for the Hangzhou Asian Games and are very much looking forward to participating in the grand events in Zhejiang, China. This enthusiastic participation highlights the Hangzhou Asian Games as an important platform for promoting unity and cooperation in Asian sports. It also demonstrates the extraordinary achievements and strong appeal of the high-quality economic and social development since the 18th CPC National Congress. Leveraging sports to facilitate exchanges and mutual learning among civilizations is a tangible embodiment of building an Asian community with a shared future.

Second, the venues for the Hangzhou Asian Games are fully prepared. Projects are being inspected and advanced simultaneously with initiatives that benefit the public.

The Asian Games will be hosted in six competition zones, including Hangzhou, Ningbo, Wenzhou, Jinhua, Shaoxing, and Huzhou. Currently, all 56 stadiums have passed sport-event functionality inspections and are ready for competition operations. The HAGOC has skillfully balanced preparations for the events with serving the community. Since the Games were postponed due to the pandemic, these stadiums have been made accessible to the public, enhancing community wellness. To date, over 8 million people have participated in fitness activities at these venues. After the Asian Games, the stadiums will continue to be open to the public. Regularly organized sporting events and cultural performances will be held to further satisfy the living needs of the public.

Third, the Games-time operation system has been established, and comprehensive tests have been conducted in all areas.

Aligned with the operational requirement of "unified command, tiered arrangements, and quick response" during the Games, the HAGOC has developed a command and coordination system. This system is designed to ensure effective coordination and emergency-handling capabilities. It is structured around 56 competition venue teams, supported by 17 specialized teams, and guaranteed by city-wide operational support. To date, 42 test contests have been organized, and 13 are planned for the next phase. These contests will serve as full-scale tests of event organization and the functionality of both hardware and software operations to be fully prepared for the Asian Games.

Fourth, the Chinese delegation will spare no effort to compete in the events. 

At present, the General Administration of Sport is assembling the Chinese delegation, which will include over 900 top-level athletes. These athletes will compete against their counterparts from various Asian countries and regions. The Hangzhou Asian Games, being held on home soil, will also serve as a significant preparatory phase for Chinese athletes ahead of the 2024 Paris Olympic Games. They aim to deliver outstanding performances, demonstrate exemplary spirit, and achieve success in both competition and sportsmanship.

We welcome friends from the media to continue following and supporting the Hangzhou Asian Games and Asian Para Games. Your involvement will contribute to our efforts to host a grand Asian Games that embodies distinct Chinese characteristics, unique Asian elements, and spectacular experiences. Thank you!

Shou Xiaoli:

Now, I'll give the floor to Ms. Zhao for her introduction.

Zhao Sujing:

Good morning, friends from the media! I am here to provide an update on the preparation of Chinese athletes for the Hangzhou Asian Para Games.

The CPC Central Committee with Comrade Xi Jinping at its core has paid particular attention to the cause of people with disabilities. As the authority responsible for parasports, the China Disabled Persons' Federation has, since the 18th CPC National Congress, diligently followed the guiding principles of General Secretary Xi Jinping's important instructions on programs and sports development for people with disabilities, implemented the decisions and plans of the CPC Central Committee and the State Council, conducted extensive rehabilitation and fitness activities for disabled people, and made every effort to prepare for the Hangzhou Asian Para Games.

Our goals for participating in the Hangzhou Para Asian Games are clear. The size of our delegation will be commensurate with the status of being the host country. We aim to maintain a leading position, and achieve success in both sports competition and sportsmanship. We will make smooth organization for the Games and achieve the best possible athletic results at the event.

We are now actively preparing for intensive training and participation in various international sporting events, making good preparations for setting up the national team of parasports athletes. We have organized a total of over 600 people in 17 teams of track and field, swimming, etc., to receive intensive training in provinces and municipalities such as Beijing, Shanghai, Fujian, Jiangsu, Shanxi, Guangdong, and Hebei. As of the end of May, we have dispatched 16 delegations to compete in international sporting events. A total of 128 gold medals, 115 silver medals, and 95 bronze medals have been obtained. The national training teams will receive intensive training at training bases in localities including Beijing and Zhejiang in July this year, and the delegation will be established in October.

Currently, the preparation for the Hangzhou Para Asian Games has entered the homestretch. In the next stage, we will focus on the following aspects of the work.

First, we will obtain more quotas for the Asian Games. We will strive for more quotas for the Games by participating in international sporting events and gaining points and international classification.

Second, we will focus on preparation for key events, such as track and field, swimming, table tennis, wheelchair fencing, weightlifting, badminton, cycling, and judo for people with visual impairments. These events are all crucial for the Chinese sports delegation to compete for gold medals at the Hangzhou Asian Para Games. We will channel more resources, including personnel, funding, competition arrangements, and equipment, towards these key events.

Third, we will spare no effort in providing services and support for the national team. Given that parasports athletes are all part-time athletes, we will coordinate resources from disabled persons' federations at all levels and strive to support the national training teams, freeing them from worries and helping them fully prepare for the competition.

Fourth, we will focus on improving conduct to demonstrate sportsmanship. We will strengthen communication with the national teams of parasports athletes on theoretical and political issues, carry forward the spirit of the Beijing 2022 Winter Olympics, and demonstrate the ethos of people with disabilities in China in the new era through participation in the Games. This will also present the achievements of China's work in supporting people with disabilities. Thank you!

Shou Xiaoli:

Next, I'll give the floor to Mr. Li Yanyi.

Li Yanyi:

Good morning, friends from the media! First, on behalf of the People's Government of Zhejiang Province, I would like to extend heartfelt thanks for your long-term attention, support, and assistance towards the Hangzhou Asian Games and the Asian Para Games! General Secretary Xi Jinping has attached great importance to and placed high hopes on the Hangzhou Asian Games and the Asian Para Games. He pointed out that he believes Hangzhou is capable of hosting a successful Asian Games. Under the strong leadership of the CPC Central Committee and the direct command of the leading group for the Asian Games, Zhejiang has mobilized the resources of the entire province and actively prepared for the Games. At present, all preparations for the games are almost complete.

First, a coordinated and efficient command system has been established. We have set up the event headquarters of the Hangzhou Asian Games and the sub-headquarters in five co-host cities, namely Ningbo, Wenzhou, Huzhou, Shaoxing, and Jinhua. We have also cooperated closely with the General Administration of Sport of China, China Disabled Persons' Federation, the Olympic Council of Asia and the Asian Paralympic Committee, advancing the effective implementation of all tasks.

Second, a high-quality competition environment has been created. All 56 competition venues, 31 training venues, and the Asian Games village are ready for use. We have conducted 42 all-factor, full-process, and full-load test drills. Simultaneously, we have launched campaigns to improve urban environment, governance, and level of civility across the Zhejiang province. 

Third, meticulous and professional services and support have been strengthened. We have built a service and support system covering all sectors and the full cycle, including protocol arrangements, arrivals and departures, transportation, food and accommodation, and healthcare. We have established the country's first digital service platform for spectators, providing one-stop services in areas such as ticket purchasing, transportation, game-watching, and tourism. We have recruited and trained 50,000 volunteers for the Games and 1.42 million urban volunteers, making efforts to ensure all guests feel as cozy and warm as if they were at home.

Fourth, a strong and warm atmosphere for the Asian Games has been fostered. We have organized thematic serial activities, including promotional events in 10 different cities, fun runs, and activities to help make dreams come true. Additionally, we have opened event venues to the public before the Games, an unprecedented move in China, fostering a strong atmosphere of public participation and sharing of benefits. Tomorrow marks the 100-day countdown to the opening of the Hangzhou Asian Games. We will hold an Asian Games flame lighting ceremony at the ancient city of Liangzhu, a world cultural heritage site. We will also reveal the Asian Games medals and theme song at the 100-day countdown. We will always bear in mind the great trust of General Secretary Xi Jinping, seize the day, and make all-out efforts to complete all the test events in July, comprehensive rehearsals in August, and all the relevant work in September, welcoming guests from all around the world.

We firmly believe that under the strong leadership of the CPC Central Committee, and with the great support of national ministries and commissions, and other provinces and cities, we will successfully fulfill all preparation tasks for the Games and deliver to the world a spectacular sports and cultural event that is distinctly Chinese and uniquely Asian. We welcome friends from the media to continue following and participating in the Hangzhou Asian Games and Asian Para Games. Thank you!

Shou Xiaoli:

Next, I'll give the floor to Mr. Yao Gaoyuan.

Yao Gaoyuan:

Hello, friends from the media! With 100 days to go, the grand opening of the 19th Asian Games will be held in Hangzhou, the third Chinese city to host the Asian Games, following Beijing and Guangzhou. Since its successful bid for the Asian Games, Hangzhou and the five co-host cities have always kept in mind the great trust of General Secretary Xi Jinping, who believes Hangzhou is capable of hosting a successful Asian Games. They have fully implemented the requirement of hosting a "streamlined, safe, and splendid" event, pursued excellence through constant improvement, and made every effort to carry out the preparation work.

First, overall improvements have taken place in the city in preparation for the Asian Games. The construction of Asian Games venues adhered to the principle that new venues would not be built if existing venues could be renovated. Only 12 of the 56 competition venues were newly built, while others were renovated or temporary buildings. All 31 training venues, which were renovated, have passed inspections for sports events functionality and barrier-free facilities. A rail transit network of 516 kilometers has been built in Hangzhou, and an expressway network has been developed to cover 480 kilometers. We have made improvements to 39 city entrances and 215 commute roads for the Asian Games and beautified every corner of the city to welcome friends from all over the world with the unique charm of "a paradise on earth."

Second, intelligent technologies have been applied throughout the entire preparation process for the Asian Games. We have upgraded "Asian Games Online," a digital platform for hosting the event, and established the "Smart Hangzhou 2022," which is a digital service platform for watching games. We introduced the first digital torch bearer in the history of the Asian Games, launched the Asian Games Pass, and adopted applications, including autonomous driving and intelligent buses. These digital technologies enhance the efficiency of preparations and the efficacy of services and support, fully demonstrating the achievements made in the development of a digital China.

Third, we have made coordinated efforts to support the Asian Games. We have established "1+4" entry and exit ports and selected 85 official hotels. We have carried out integrated planning and construction of the Athletes' Village, Media Village, and Technical Officials' Village. Additionally, we have completed the upgrading and renovation of 727 barrier-free guest rooms and 15 major categories of barrier-free facilities. We will welcome "villagers" from all Asian countries and regions to move into the village, offering the best environment and conditions. At present, venue operation teams from host and co-host cities are already in place. They have acted upon the principle of "one plan for one venue," strengthened all-factor rehearsals, and made great efforts to offer meticulous, thoughtful, professional, and considerate services.

Fourth, everyone participates in and shares the Asian Games. We have upheld our original commitment of hosting an "Asian Games for all with joint construction and shared benefits," setting a precedent by opening competition venues to the public before the Games. Over 8 million people have exercised in these venues. We have launched three campaigns to improve urban development, governance, and civilization in celebration of the Asian Games. Over 10,000 activities have been organized to promote the Asian Games in government departments, enterprises, schools, communities, and social organizations. We have developed four tour routes: "beautiful homeland," "streets and alleys with Hangzhou charm," "smooth transportation," and "a city full of flowers." Additionally, 130,000 barrier-free facilities and sites in Hangzhou have been upgraded. Online information and navigation are accessible for 297 subway entrances and exits, 28 pedestrian overpasses and underpasses, and 1,573 public restrooms. We also provide 24-hour free digital sign language services.

A trip to Hangzhou has always been memorable. We sincerely invite friends worldwide to gather in picturesque and dynamic Zhejiang, enjoy splendid games, explore the charm of Song dynasty culture while touring the city, and create unforgettable memories. Hangzhou awaits your visit. Thank you!

Shou Xiaoli:

Thanks to all the speakers for the introduction. Now, you're welcome to raise questions. Please identify your media outlet before raising your questions. Now, the floor is open for questions.

CCTV:

My question is for Mr. Zhou. The setup of the Asian Games events also has many characteristics and features. Compared with previous Asian Games, what are the considerations of Hangzhou as the host city for the design? What are the highlights? Thank you.

Zhou Jinqiang:

Thank you for your questions. According to the requirements of the Olympic Council of Asia, we have also jointly consulted with Asian federations. Considering the characteristics of economic, social, and cultural development in Zhejiang, we have set 40 sports, 61 disciplines, and 483 events for the Hangzhou Asian Games. These include most of the Olympic events, such as track and field, swimming, and other major events, and feature events including martial arts, sepak takraw, cricket, kurash, and jujitsu, which represent the sports culture of East Asia, Southeast Asia, South Asia, Central Asia, and West Asia. There are also emerging events such as skateboarding, sport climbing, and esports , which are popular among teenagers. These events both demonstrate Olympic elements and offer an opportunity for Asian countries and regions to present their own features of sports culture, fully illustrating the diversity and inclusiveness of Asian sports culture. Thank you!

People.cn:

What are the difficulties in preparing for the Hangzhou Asian Games and Asian Para Games? How have you overcome them? Additionally, given that the transition time between the Asian Games and Asian Para Games isn't very long, how will you ensure a smooth transition? Thank you.

Chen Weiqiang:

Okay, I'll answer this question. Indeed, there are many difficulties in preparing and organizing a major sports event. People have high expectations for the Hangzhou Asian Games, and it is the largest Asian Games ever. Therefore, we have faced some challenges in the preparation. Take the equestrian events as an example: not only did we have to build the venues, but we also had to establish an equine disease-free zone, create safe passages, and acquire certifications from the World Organization for Animal Health and the European Union, making the situation very complicated. This is regarding the preparation of the venues.

Besides, honestly speaking, we lack experience in organizing sports events. Hangzhou hasn't hosted a major sports event before, and relevant talents are scarce. The three-year COVID-19 epidemic has also caused great difficulties in the construction and delivery of venues. Initially, as the 72 technical officials selected by the Olympic Council of Asia were all foreigners and they couldn't come to China, the sports venue design and technical standards couldn't be settled. These problems were then solved via video links; however, difficulties still existed in on-site deliveries, as they still couldn't come to China. All these increased our perplexity to some extent. And after the Asian Games was postponed, we also faced risks, including those with our contracts. During our preparation for the Asian Games, we signed about 3,200 contracts, and 888 of them needed to be amended by supplemental agreements. Before April this year, we had signed all of these supplemental agreements, without creating any undesired consequences. We have taken active steps to address these difficulties. The HAGOC sent batches of people to observe and learn from the Beijing Winter Olympic Games for half a year. We've also learned from the Military World Games held in Wuhan and sports events hosted by other cities. Meanwhile, as mentioned earlier, we have actively diffused risks, mainly the risks brought by the delay of the Games and those concerning contracts. In terms of bringing in talent, we've gained great support from the General Administration of Sport of China and the China Disabled Persons' Federation, which have selected and dispatched talent nationwide for us. The Hong Kong Jockey Club also sent people to help us organize the equestrian events. We've also hired many professionals as experts and consultants to shore up our weak links.

In addition, we have identified loopholes and strengthened our teams through tests and exercises, including carrying out pressure tests. To date, we have held over 40 test events, including more than 20 last year and over 20 since the beginning of this year. Problems have continuously been discovered, examined, and resolved during these tests.

The transition between the Asian Games and the Asian Para Games is indeed also a test for us. We maintain that both Games should be equally splendid, so we operate as a team with two brands. That is, the organizing committees of the Asian Games and the Asian Para Games consist of the same group of people. First, there is no transition in essence. We view them as two stages of one continuous competition, so they are consistent in essence.

Second, concerning facilities for the Asian Para Games, we planned in advance, such as the construction of barrier-free passages and rooms for athletes of the Asian Para Games. Considering there will be about 3,900 athletes for the Asian Para Games, with 1,100 athletes using wheelchairs, their rooms needed modifications, including larger elevators and restrooms. We have completed these transformations in advance, so no transition is needed for that. These rooms can be put into use as soon as the athletes arrive.

Third, in our planning, we have endeavored to create connections between the Asian Para Games and the Asian Games. For example, we have adopted the same information systems in venues, so the system used in the Asian Games can also be utilized in the Asian Para Games. We have used the same color schemes in venues, so we don't need to make large adjustments when setting up the venues; we can simply change the emblem and slogan. By doing this, we have significantly shortened the transition time. We have made detailed plans and carried out meticulous exercises. During the half-month transition period, we can swiftly switch to the Asian Para Games scenario.

That's all for my introduction. Thank you!

Xinhua News Agency:

My question is for Ms. Zhao. This year, we will host the Hangzhou Asian Para Games, and next year, there will be the Paris Paralympic Games. How will the China Disabled Persons' Federation prepare for these two events? Thank you.

Zhao Sujing:

Thank you for your question. Your issue is a key focus for our consideration and arrangement at the China Disabled Persons' Federation. Among the 22 sports in the Hangzhou Asian Para Games, 19 are qualifying events for the Paris Paralympic Games. Therefore, we are simultaneously preparing for both Games. Firstly, the China Disabled Persons' Federation has established leading groups for both the Hangzhou Asian Para Games and the Paris Paralympic Games, coordinating the preparation work for both events. Second, we are also considering these two Games in organizing training and participation in international sports events. For example, some international sports events are qualifying games to earn points for both Games, and these events are given priority in our planning. At the same time, we are also conducting intensive training for common events of the two Games concurrently. Third, through our preparation and participation in the Hangzhou Asian Para Games, we will further select talented and excellent athletes to actively prepare for the Paris Paralympic Games next year. We believe that the Chinese sports delegation will achieve success in both sports competition and sportsmanship not only in the Hangzhou Asian Para Games but also in the 2024 Paris Paralympic Games. Thank you!

Zhejiang Daily:

At present, the Asian Games-themed subway train has successfully started operation in Hangzhou. Can you talk about its features and highlights? Will there be any new highlights and measures in transport construction in the other five co-host cities to satisfy the needs of the Games?

Li Yanyi:

Thank you for your question. I'll answer it. Your question covers two aspects. The first one is about the Asian Games-themed subway train. This is the 19th Asian Games. In the Asian Games Village, there is a street named "Shijiu Street," which means No. 19 Street. There is a new subway line in Hangzhou, Hangzhou Metro Line 19, which was put into operation on May 16 this year. And the Asian Games-themed subway train you just mentioned operates on Line 19. The Asian Games train has three characteristics.

First, it is tailored for the Asian Games. The head of the special train is adorned with the emblem of the Hangzhou Asian Games, and the body of the train and the armrests are colored with Rainbow Purple, the main color of the Hangzhou Asian Games emblem. The interior and exterior of the train are adorned with core elements such as the slogan, vision, and emblem of the Hangzhou Asian Games. It can be said that the Asian Games-themed subway train is a movable piece of scenery at the Asian Games.

Second, Line 19, where the Asian Games train operates, runs through Hangzhou Xiaoshan International Airport, Hangzhou East Railway Station, and Hangzhou West Railway Station, which are major transportation hubs in Hangzhou. This line is the backbone of the Hangzhou metro network. During the Asian Games, the Asian Games-themed train will become the most frequent transport line for greeting guests from home and abroad.

Third, by taking the Asian Games-themed train and transferring to other metro lines, passengers can easily access 22 Asian Games venues, including the Hangzhou Esports Center and Huanglong Sports Center. This ensures that people only need to transfer once to reach the venues. During the Asian Games, Hangzhou will provide translation services for minor languages on subway lines along the venues, including navigation for taking subways.

Regarding the question about city transport, Zhejiang has upheld the concept of "boosting the development of a city through hosting the Asian Games." Zhejiang will use the opportunity of hosting the Hangzhou Asian Games to advance high-quality transport development in the province, especially in host city Hangzhou and the five co-host cities, including Ningbo, Wenzhou, Huzhou, Shaoxing, and Jinhua, bringing major opportunities for transport development in the "1+5 " host and co-host cities. Concerning the expressway, a series of expressways have been opened to traffic, including the elevation project of the Shanghai-Hangzhou-Ningbo Expressway, the improvement project of the Ningbo section of Shenyang-Haikou Expressway, and the improvement project of the Wenzhou Oujiang Grand Bridge. The Hangzhou Metro Phase III Project has been fully completed. The length of in-service subway lines has reached 516 kilometers, growing 10 times since the preparation and organization of the Asian Games and ranking sixth in China. The Hangzhou-Huzhou Railway and Hangzhou-Shaoxing-Taizhou Railway have been completed and put into operation. The Fuxing Intelligent High-speed EMU Asian Games Special Train will also be put into operation and will efficiently connect Hangzhou and the five co-host cities. Therefore, transport construction will provide better service and support for the Asian Games and will also strongly advance the high-quality and integrated development of the Yangtze River Delta region. Thank you!

Red Star News: 

We understand that Zhejiang is working on building a Digital Zhejiang, and Hangzhou is establishing itself as a leading city in China's digital economy. The Hangzhou Asian Games will embody the "smart" Asian Games in all aspects. The "One Stop Platform for Smart Asian Games," a one-stop digital service platform for watching the Games, was launched in 2021. Can you talk about how this platform will provide services to enhance the spectator experience? Thank you.

Yao Gaoyuan:

I'll answer this question. Leading up to the Asian Games, many viewers have been paying attention to how the spectator experience can be improved through digital technologies. As is well known, 20 years ago, when General Secretary Xi Jinping worked in Zhejiang, he proactively proposed a major strategic plan for building a digital Zhejiang. After years of development, the digital economy has become Zhejiang's primary development initiative, and digital transformation has become a major systemic reform. Digital technologies have empowered hundreds of industries and sectors, delivering significant benefits.

Against this backdrop, in our preparation for the Asian Games, we introduced a concept centered on leveraging digital technologies to enhance the Games, intending to create a "smart" Asian Games as a standout feature. The "One Stop Platform for Smart Asian Games," which the reporter just mentioned, is a typical application scenario in our empowerment of the Asian Games with digital technologies. It could be said that this one-stop digital service platform for watching games is the first such platform for an international multi-sport event. This platform was launched in 2021, and since then, it has attracted over 3.3 billion visits and over 50 million registered users. There are many functions, and I would like to briefly describe some of them.

First, it offers a service for watching the Games. The "One Stop Platform" provides a daily competition schedule during the Asian Games, which can be detailed down to every hour. The platform also offers daily cultural information, as there are many cultural activities. It provides ticket information for sports events and a series of supporting services. The integration of sports events with artificial intelligence offers services and creates a personalized spectator experience. That is the service for watching the Games.

Second, it provides travel services. If you want to go to a specific venue, the platform can help you arrive at the venue more conveniently, quickly and in the shortest time. Our travel service, leveraging artificial intelligence, offers customized itineraries to Asian Games venues. It formulates plans through various modes of travel, such as buses, subways and bicycles. Through the intelligent arrangement of such a "One Stop Platform," people can reach the competition venue they want to go to in the shortest time and in the most convenient way.

Third, it offers a food service. China has an enduring food culture. Zhejiang, in particular, has many specialties, allowing people to fully enjoy delicious food. Being able to enjoy food is also an important experience during the Games. Utilizing big data algorithms, we have curated a list of delicious foods, enabling you to conveniently search for restaurants with local specialties in Zhejiang and Hangzhou city. You can also use navigation to search for global cuisines nearby. We have athletes, cheerleaders, and spectators from all over the world. For example, if you want to enjoy Japanese cuisine, you can easily access the nearest specialty restaurants on the "One Stop Platform." Additionally, you can browse through tourist attractions.

Fourth, it offers multi-language services. Many spectators may not understand Chinese, so we have included six languages: Chinese, English, Japanese, Korean, Russian and Arabic. It has a great translation function. Even if you don't understand Chinese, you can travel smoothly to all places during the Asian Games.

In addition to these four major functions, we have utilized this platform to introduce the digital torchbearer and digital torch, which are also firsts in history. We have torchbearers, but for the Asian Games, we introduced the digital torchbearer. We have a torch, but it is digital. Any of our 50 million registered users worldwide can participate in this online activity on the "One Stop Platform." That is to say, you can become a digital torchbearer for the Asian Games. Next, there will be a torch relay. You can engage in the online torch relay, which is a great feature. We hope that through the "One Stop Platform for Smart Asian Games," a digital service platform for watching the Games, we can provide a more comfortable and convenient spectator experience for people who come to Zhejiang and Hangzhou to watch the Games.

Thank you!

China News Service:

The Hangzhou Asian Para Games is the fourth Asian Para Games. The first Asian Para Games was also held in China. What's the influence of organizing the Asian Para Games on promoting the development of programs for people with disabilities? Thank you.

Zhao Sujing:

Thank you. I'll answer this question. The Hangzhou Asian Para Games, as you mentioned, is the fourth Asian Para Games. The first Asian Para Games was held in China's Guangzhou in 2010, setting a new example for developing parasports in Asia. The preparation and organization of this Asian Para Games is an important opportunity for promoting the development of China's programs for people with disabilities.

First, it's conducive to mobilizing more people with disabilities to engage in sports. As you all know, para-athletes from Asian countries are representatives of excellent individuals with disabilities. Their fighting spirit will motivate and inspire more people with disabilities to participate in sports, rehabilitation, and fitness activities. When talking with our athletes, many have mentioned that when they watched the Paralympic Games in 2008 as spectators, they were inspired by the fighting spirit of para-athletes in competitions and felt that they could also win glory for the country. That's the reason for their participation in parasports. Therefore, for people with disabilities, this session of the Asian Para Games is also a major event that we believe could inspire, motivate, and lead more people with disabilities to engage in sports, rehabilitation, and fitness and be better involved in society.

Second, it's conducive to improving the competitive level of parasports in China. Through participation in the Asian Para Games, our athletes and excellent para-athletes from other Asian countries can learn from and exchange with each other in competitions. The Games provide an opportunity to select more excellent athletes and reserve talents for future parasports events.

Third, it's conducive to advancing China's programs for people with disabilities. The preparation and organization of the Asian Para Games is a major opportunity for advancing China's programs for people with disabilities. It plays an important role in promoting the progress, not only in constructing barrier-free facilities but also in illustrating China's advances in civilization and its support and assistance for people with disabilities.

Fourth, it's conducive to demonstrating the achievements in developing China's programs for people with disabilities and building an important platform for achievements in protecting and safeguarding human rights. The Hangzhou Asian Para Games is not just a sports event; it also establishes an exchange platform for disabled people. In the past decade of the new era, China has made major progress in rehabilitation, education, employment, social environment, culture, and sports for people with disabilities. We're looking forward to exchanging with disabled friends from other Asian countries and regions, learning from each other, and making contributions together to promote the development of the programs for people with disabilities worldwide and the building of a global community of shared future. Thank you!

China Daily:

We have learned that Hangzhou aims to make the Hangzhou Asian Games the first zero-waste large comprehensive sports event in the world, and it has also upheld the concept of a "zero-waste city" throughout the Games. How can we ensure in our planning and implementation the reduction and reuse of solid wastes as much as possible and realize 100% safe disposal? Thank you.

Li Yanyi:

Thank you for your question. In preparing and organizing the Asian Games, Zhejiang has adhered to hosting a "green, smart, economical, and ethical" Asian Games. We have launched the "zero-waste Asian Games" action plan, released 10 proposals for a "zero-waste Asian Games," and advanced the development of 16 demonstration sites of "zero-waste Asian Games cells," sparing no effort to create the first large zero-waste sports event in the world. Here, I will use the construction of our venue as an example to give a brief introduction.

In the venue layout and planning phase, we followed the principle of "renovating instead of building, repairing instead of replacing, renting instead of buying" to make full use of existing venues and facilities. Initially, Mr. Yao mentioned in his introduction that among the 56 Asian Games venues, 44 were renovated or temporarily built. That means there are only 12 newly built venues. Among the 19 Asian Para Games venues, 17 are shared with the Asian Games, and the other two venues have also been renovated. In the design phase, we formulated guidelines for Green and Healthy Architecture Design for the 19th Asian Games to maximize the utilization of clean and renewable energy by optimizing the design of architectural structures. For example, many venues use natural lighting to save energy and recycle rainwater and thermal energy through circulation systems. In the construction phase, we focused on reducing solid waste at the source and recycling it, prioritizing the use of green construction materials, recycling construction waste, and adopting BIM technologies to save construction materials and energy consumption. At the same time, we advanced waste reduction at the source in all areas, including green accommodation, frugal catering, paperless events, and promoting renewable materials, integrating the concept, behavior, and model of zero waste into the entire process, all areas, and all sectors from the preparation and organization to the future use after the Asian Games. Thank you!

MASTV:

The Beijing 2022 Olympic Winter Games were a great success. The anti-doping work of the Games has been highly spoken of by the International Olympic Committee and the International Testing Agency (ITA). Can you talk about the anti-doping work of the Hangzhou Asian Games? Thank you.

Zhou Jinqiang:

Thank you for your question. I'll answer this question. Anti-doping work has become a crucial aspect of major international comprehensive sporting events. The Olympic Council of Asia (OCA) oversees the anti-doping work at the Hangzhou Asian Games. The OCA has authorized the ITA to take charge of anti-doping education before the Games, the formulation of testing plans, exemption reviews for therapeutic medications, results management, and intelligence sharing. At the same time, the OCA has authorized the China Anti-Doping Agency to collect samples, the Beijing Anti-Doping Laboratory to conduct tests, and the Court of Arbitration for Sport to deal with anti-doping hearings and appeals.

The anti-doping program of the Hangzhou Asian Games will strictly comply with the World Anti-Doping Code and relevant international standards. It will be carried out in accordance with the OCA Anti-Doping Rules and Doping Control Guidelines for the Hangzhou Asian Games. During the Hangzhou Asian Games, there will be 58 doping test stations in competition venues and the athletes' village, conducting doping tests of athletes' urine samples, blood samples, and dried blood spots. The Hangzhou Asian Games will, for the first time, adopt the China Anti-doping Smart Management Platform, independently developed by China, to carry out paperless doping tests, and to use dried blood spot testing equipment made in China. Meanwhile, during the Games, multiple anti-doping education activities will be organized in the athletes' village.

To create a pure and clean environment for competition, the General Administration of Sport of China has worked with relevant ministries and departments to carry out comprehensive management of doping and has guided the HAGOC to strictly guard against the risks of stimulants in food, medicine, and medical treatment for athletes. Meanwhile, the OCA, the ITA, the General Administration of Sport, the Ministry of Public Security, the General Administration of Customs, the China Anti-Doping Agency, and the HAGOC will sign the Cooperation MOU on Anti-Doping Intelligence and jointly crack down on illegal and criminal activities concerning doping through the sharing of intelligence, so as to achieve the goal of making the Games streamlined, safe and splendid. Thank you!

The Beijing News:

The number of venues for the Hangzhou Asian Games and Asian Para Games totals 56, which surpasses that of the Olympic Games. Does this conform to the concept of hosting an economical Asian Games? Thank you.

Yao Gaoyuan:

In our preparation for the Asian Games, there is a very important requirement that the Games be streamlined, safe, and splendid. Hosting a streamlined event is given top priority and is one of the very important requirements for organizing the Asian Games. In terms of major sporting events at home and abroad, hosting an economical event has become a trend, a consensus, and an action. Regarding the question just mentioned concerning the venues' cost-effectiveness, we have consistently adhered to three dimensions and concepts throughout.

First, we have adhered to the economical concept of " if it can be renovated, don't build it" in venue construction. As Mr. Zhou mentioned earlier, most of the competition and training venues have been renovated or repurposed, using existing buildings. As long as they meet the requirements of the games, we generally follow the principle. This reflects a commitment to hosting an economical Games. As you mentioned, with 56 venues, we have for the Hangzhou Asian Games fewer venues than previous Asian Games. However, we have more venues than the Olympic Games or the Winter Olympic Games. This is because the Asian Games have many competition events, more than the Olympic Games and the Winter Olympic Games, with 40 major events and 483 sub-events. This means that every venue is fully scheduled. To ensure the smooth progress of the Games, some competitions have even been scheduled before the opening ceremony to reduce the number of venues needed. Therefore, the preparation of the venues was done according to actual needs.

Second, since the completion of the venues, we have adhered to the economical principle of "if market entities can support their development, don't use government funding" on facilities and equipment. If we can rent facilities and equipment, we will not buy new ones, and if we can borrow, we will not rent. For example, we will not spend fiscal funds if market entities can develop facilities and equipment. If fiscal funds are necessary, we will consider the actual conditions. If the venue's function remains unchanged and sustainable use is achievable, we will purchase the necessary equipment and facilities. However, if the venue's function will change in the future, for example, if a sports stadium being converted to a convention center, we prefer to rent or borrow equipment to reduce financial expenditure and waste.

Third, the most crucial aspect of the economical concept is to ensure the sustainable use of the venues as a lasting legacy of the Asian Games. After completing the venues, it would be a waste if they were left idle. Therefore, since we started building the 56 venues, we have been planning their use after the Games. Satisfying the needs of the competition is the first half of the work, and ensuring the sustainable use of the venues after the Games is the second half, which I believe is more important. At present, 51 of the venues have already developed specific plans for their future use. Although the Asian Games have not started yet, the proportion of venues with plans for post-Games use has reached 91%.

Therefore, throughout the entire process of organizing the Games, we have always kept frugality in mind. Hosting an economical Asian Games is our guideline and the principle we uphold. We have fully acted upon this principle in our practice. Thank you.

Shou Xiaoli:

Due to time constraints, we will have one last question.

Nanfang Daily, Nanfang Plus: 

We've learned that since the postponement of the Hangzhou Asian Games, all of the competition and training venues have been opened to the public, setting a precedent for opening comprehensive sports event venues for public fitness and recreational sports before the Games. Can you tell us how these venues will be utilized after the Games? Thank you.

Chen Weiqiang:

As Mr. Yao mentioned earlier, the utilization of venues after the Games is a major concern for everyone. The venues for the Asian Games and Asian Para Games mainly fall into two categories. The first category is the venues for public use, which can be used by the general public. The second category is more professional venues. The first category of venues is an important base for public fitness. The general guiding principle is to open them to the public for their benefit. Some are free, such as athletics and football stadiums, while others are charged at low prices to cover costs. The key is that we need to specify the operation entity. Our distinctive feature is that we have introduced third-party management for these venues. As Mr. Yao mentioned, the third party is very experienced and can bring in information about other events. This is the first category, the venues for public sports. For professional venues, we have professional teams using them as intensive training bases. For example, the Shaoxing baseball and softball sports center has become the training base for national teams. The shooting range hall has become the training base for the Hangzhou shooting team. The strengths of professional venues have been fully leveraged. Of course, whether it is mass-oriented venues or professional venues, we aim to host as many sports events as possible. We are striving to provide support for sports events and tournaments. Meanwhile, we will also organize some cultural activities and exhibitions, maximizing the role of these venues. Thank you.

Shou Xiaoli:

Thanks to all the speakers and friends from the media. Today's briefing is hereby concluded. See you.

Translated and edited by Wang Qian, Zhang Junmian, Liu Sitong, He Shan, Wang Wei, Wang Yanfang, Ma Yujia, Zhou Jing, Huang Shan, Li Huiru, Xu Kailin, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Ren Hongbin, chairman of the China Council for the Promotion of International Trade (CCPIT)

Mr. Yu Jianlong, vice chairman of the CCPIT

Mr. Nie Wenhui, director of the CCPIT General Office and spokesperson of the CCPIT

Chairperson:

Xie Yingjun, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

June 9, 2023

Xie Yingjun:

Good morning, ladies and gentlemen! Welcome to this press conference of the State Council Information Office (SCIO). The first China International Supply Chain Expo will be held in Beijing. Today, we invite Mr. Ren Hongbin, chairman of the China Council for the Promotion of International Trade (CCPIT), to share the preparations for this expo and answer questions. Also present at today's press conference are Mr. Yu Jianlong, vice chairman of the CCPIT, and Mr. Nie Wenhui, director of the CCPIT General Office and spokesperson of the CCPIT.

Now, I'll give the floor to Mr. Ren for a brief introduction.

Ren Hongbin:

Thank you. Friends from the media, ladies and gentlemen, good morning! It is a pleasure to be here today alongside my two colleagues. I am also excited to have the opportunity to meet both new and familiar faces in the media. On behalf of the CCPIT, I would like to express my sincere gratitude to the news media and individuals from all walks of life for your unwavering support for China's trade promotion efforts.

Today, we provide relevant information about the upcoming China International Supply Chain Expo.

The first China International Supply Chain Expo, recently dubbed as the "Chain Expo" by the media, will be held at the China International Exhibition Center (Shunyi Venue) in Beijing from Nov. 28 to Dec. 2 this year. The theme of this year's Chain Expo is "Connecting the World for a Shared Future."

We are well aware of President Xi Jinping's strong emphasis on the stability and smoothness of global industrial and supply chains. He has repeatedly highlighted China's commitment to taking practical measures to ensure the security and stability of these chains on a global scale.

In May 2022, President Xi Jinping called upon the global business community to actively promote the interconnectivity of industrial and supply chains when addressing the 70th-anniversary conference of the CCPIT and the Global Trade and Investment Promotion Summit via video link.

Organizing the first Chain Expo is a significant step in fully implementing the principles outlined at the 20th National Congress of the Communist Party of China (CPC) and President Xi Jinping's important video speech. This expo is a crucial initiative to actively contribute to establishing a new development pattern. It will expand the opportunities for Chinese-style modernization through increased openness. It aims to facilitate the deeper participation of Chinese companies in the global industrial division of labor, foster open cooperation within industrial and supply chains, and drive the advancement of a modern industrial system. Furthermore, it acts as a novel platform for exchange and collaboration, designed to enhance the stability and smoothness of global industrial and supply chains in the post-pandemic era. This platform will strengthen cooperation and create shared opportunities for enterprises from different countries. It will foster a more organized, streamlined, and efficient global industrial connection while promoting the development of a resilient global industrial and supply chain.

The first Chain Expo is hosted by the CCPIT and organized by the CCPIT subsidiary, China International Exhibition Center Group Limited. Several international organizations will also co-organize the event. With an exhibition area of over 100,000 square meters, the expo will have areas dedicated to five major supply chains, including smart vehicles, green agriculture, clean energy, healthy living, and digital technology. It will also host an exhibition area for the modern logistics sector. The expo will feature an opening ceremony and the Global Supply Chain Innovation and Development Summit. Additionally, it will include five themed sub-forums centered around the five major supply chains, along with a range of supporting activities such as supply and demand matchmaking meetings, industry seminars, and new product launches. It can be said that exhibitions and meetings will work synergistically to achieve common objectives and reinforce one another at the first Chain Expo.

We are exerting every effort to promote the participation of exhibitors and potential buyers from both home and abroad for the first Chain Expo. We have sent invitations to various entities, including centrally-administered enterprises, state-owned enterprises, leading enterprises in the industrial chain, foreign-funded enterprises in China, private enterprises, and specialized and sophisticated enterprises. Additionally, we have contacted embassies and consulates abroad, overseas representative offices of the CCPIT, our counterparts in other countries, and foreign business associations, among others, to extend an open invitation to the global business community. Just last night, we held a promotional event for the expo and a meeting for Chinese and foreign enterprises, attended by nearly 600 individuals, including diplomatic envoys from relevant countries in China, foreign business associations, and representatives of both Chinese and foreign enterprises. We were pleased to witness more than 30 companies signing letters of intent to participate in the exhibition. Based on the current situation, the efforts to attract exhibitors and potential buyers for the expo have progressed smoothly, and there is substantial enthusiasm from enterprises of all parties. Presently, hundreds of Chinese and foreign enterprises, including top 500 global companies, specialized and sophisticated firms, small giants, and "hidden champion" companies, have confirmed their participation in the exhibition.

With the first Chain Expo just 172 days away, we are fully committed to attracting investments and securing exhibitors. We will further refine the exhibition design and prepare for forums and other activities, ensuring the resounding success of the first Chain Expo. We sincerely invite governments, business communities, and international organizations and institutions from all countries to participate in this expo. We eagerly invite guests from all walks of life to the Chain Expo in late November to participate in this grand event, share opportunities and collectively shape a better future.

We also extend a warm welcome to the media to continue your attention, coverage, and promotion of the Chain Expo. Furthermore, my colleagues and I are here to address any questions.

Xie Yingjun:

The floor is now open to questions. Please identify the media outlet you represent before raising your questions.

Zhejiang Daily Tide News:

Executives from various multinational companies, including Elon Musk, have recently visited China. They also consider the CCPIT to be an important destination during their visits. Therefore, we would like to gather more information. Mr. Ren, how do executives like Musk perceive the current business environment in China? What are their intentions for participating in this Chain Expo? Thank you.

Ren Hongbin:

Thank you for your question. Since the beginning of this year, the CCPIT has welcomed many executives from the top 500 companies and leaders of foreign business associations to China. It is widely known that most executives from the world's top 500 companies and leaders of foreign business associations come to China through invitations and coordination facilitated by the CCPIT. Upon their arrival in China, we arrange extensive exchanges for them with relevant departments, local officials, and enterprises. Based on the current situation, many foreign corporate executives and business association heads, including Musk, have expressed strong confidence in China's economic development during these conversations. They have affirmed their commitment to further deepening their presence in the Chinese market.

CCPIT conducted a survey among over 600 foreign enterprises in China in the first quarter of this year. According to the survey, satisfaction ratings on many indicators are above 80 percent, with 97% of the enterprises showing their satisfaction with foreign investment policies rolled out by the Chinese government since the fourth quarter of last year. Therefore, foreign enterprises in China are satisfied with the business environment in the country. 

We hosted the Global Trade and Investment Promotion Summit 2023 not long ago. Guests from many countries and international organizations, including President of the New Development Bank Dilma Rousseff, and WEF Founder and Executive Chairman Klaus Schwab, showed their confidence in jointly building an open world economy and the long-term positive trend of China’s economy in their speeches. 

Visits to CCPIT by multinational companies, in a sense, have reflected their recognition of our work in serving foreign enterprises. Since May of last year, according to the unified deployment of the Chinese government, CCPIT has established special working mechanisms for serving foreign enterprises to provide all-weather and whole-process services and actively spur foreign investment quality and quantity. 

Specifically, we have started a bottom-up direct channel to meet the demands of foreign-invested enterprises and respond to problems encountered by foreign-funded enterprises and foreign business associations in China in their production and operation. We have strengthened exchanges with foreign business associations and foreign-invested enterprises on a regular basis. We have organized enterprise symposiums and dialogues between governments and enterprises regularly, listened to and responded to the concerns of foreign enterprises in a timely manner, improved the business environment monitoring system, and released national and provincial business environment survey reports regularly. We have steadily promoted targeted services to attract investment. We have promoted local investment policies through the platform named Invest China and released over 4,000 investment projects. We have also organized multinational companies to visit places in China and done a good job in matching up projects to help them share opportunities and dividends of China's development. Multinational companies come to China to communicate with us; this is the first point I would like to talk about. Through special working mechanisms for serving foreign enterprises, we felt that foreign enterprises are full of confidence in China's development. 

Second, in communications with senior executives of multinational companies, including Tesla CEO Elon Musk, we found that the Chain Expo is also an important issue of common concern. Everyone is very curious about the expo, which is the first expo focusing on supply chains in the world. We are also full of expectations about the expo. Many senior executives of multinational companies decided to participate in the expo during our talks, believing that the Chain Expo comes at an opportune time in the context of the economic integration of various countries. Everyone has shown great interest in the expo. 

President Xi Jinping instructed that CCPIT should stay true to its founding mission of serving Chinese and foreign businesses. We will keep President Xi Jinping’s words firmly in mind, advance our work with full strength, diligently perform our duties and work with domestic and foreign enterprises to build the first Chain Expo into a world-class platform for promoting trade and investment, turn it into a new window for China’s high-standard opening up, and take concrete actions to expand the prospects for the development of Chinese modernization. Thank you.

Phoenix TV:

As you just mentioned, many domestic and foreign enterprises have registered for the Chain Expo. What are those specific highlights of the expo that attract them? Thank you. 

Yu Jianlong:

Thank you for your question. You have raised a very good question. Based on statistics of registration for the expo, companies, especially foreign enterprises, have shown great interest in the Chain Expo. We have visited many enterprises recently, including the world’s top 500 enterprises, companies with long industrial chains, and small and medium-sized enterprises, and have also done many surveys in different localities. Just as Mr. Ren mentioned, many enterprises have shown their great interest in the supply chain expo when meeting with us, and many of them decided to participate in the expo on the spot, believing that it comes at an opportune time. 

I think that many enterprises are interested in the Chain Expo because it focuses on the distinctive theme of chains, and it has unique display modes of industrial ecosystem and scenarios. The supply chain expo is an open platform for international cooperation that connects the upper, middle, and lower reaches; promotes the integration of small, medium, and large enterprises; coordinates production, study, research, and application; and boosts interaction between Chinese and foreign enterprises. As for exhibitors and purchasing agents, they will have a different sense of gain compared with participating in other expos. Specifically, the supply chain expo will play the role of four platforms for trade promotion, investment cooperation, innovation gathering, and mutual learning and exchanges. 

First, it is a platform for trade promotion. During the Chain Expo, we will converge high-end products, cutting-edge technology, and professional services of world-renowned enterprises. Apart from exhibitions and displays, we will also organize a series of activities, such as business negotiations, matching up of supply and demand and field procurements to help suppliers and purchasers from various countries establish cooperative relations and reach cooperation intentions.  

Second, it is a platform for investment cooperation. We do not simply pursue the amount of transactions during the Chain Expo. The main indicator for evaluating the actual effect of the expo is to see how many businesses have established cooperation in the supply chains, and whether it has helped enterprises improve efficiency and reduce costs. Therefore, the Chain Expo will not only promote trade cooperation but also drive investment cooperation between multinationals and small and medium-sized enterprises. By inviting service agencies closely related to international investment to participate in investment matchmaking meetings, fairs, project road shows, and capital connectivity programs, the supply chain expo will provide more investment cooperation opportunities for domestic and foreign enterprises, especially promote cooperation between specialized and sophisticated enterprises that produce new and unique products and large companies. 

Third, it is a platform for innovation gathering. Invitations of enterprises, agenda settings, and exhibition designs all highlight innovative elements, aiming to promote the deep integration of the innovation and industrial chains. The most representative and distinctive enterprises in the industrial chain will display their cutting-edge scientific and technological achievements and disruptive technologies. Specifically, enterprises in the digital technology chain will display language models and other AI technologies. Enterprises in the healthy life chain will showcase the latest technologies, such as in-vitro testing and genetic screening. 

Fourth, it is a platform for mutual learning and exchanges. We will organize a number of forums during the Chain Expo. Corresponding thematic forums and seminars involved in five chains will be held, which will invite industry authorities, global leaders, representatives from multinationals, and renowned experts and scholars to share their views on new trends of industrial development and discuss new paths for advancing cooperation between industrial chains and supply chains to present a feast of ideas. Meanwhile, we will give visitors a new experience through scene presentations, multimodal interactions, and immersive experiences. 

In conclusion, the Chain Expo will make exhibitors, purchasers, and visitors find themselves in an entirely new world and have a rewarding visit. Thank you. 

Hong Kong Bauhinia Magazine: 

Some exhibitors are concerned about intellectual property protection, what will the organizers of the Chain Expo do to provide intellectual property protection services for exhibitors? Thank you.

Nie Wenhui:

Thanks for your question. The CCPIT attaches great importance to intellectual property protection in exhibitions and has rich experience. We have made careful arrangements for the work of intellectual property protection for the Chain Expo.

First, we will improve the working mechanism and establish a system of liaison officers for intellectual property protection during the Expo. We will strengthen communication and cooperation with intellectual property rights departments, and enhance law enforcement of intellectual property rights to investigate and punish acts that infringe on intellectual property rights of exhibitors and buyers in accordance with the law.

Second, we will make and distribute intellectual property questionnaires to find out the actual needs of exhibitors so as to provide precise and efficient services.

Third, we will set up an intellectual property column on the official website of the Chain Expo, providing laws and regulations, information guidelines, and publicity materials on intellectual property.

Fourth, we will set up a service center for intellectual property protection and commercial dispute settlement at the site of the Expo, where authoritative experts in the field of intellectual property rights will be invited to provide consulting services for exhibitors and buyers. Thank you.

CCTV:

Currently, there are many kinds of exhibitions in China. I would like to ask, what are the outstanding features of the Chain Expo compared to others? Thank you.

Ren Hongbin:

Thanks for your question. As you said, since the 18th CPC National Congress, various large-scale high-level international exhibitions have blossomed in China, including the China Import and Export Fair (Canton Fair), the China International Import Expo, the China International Fair for Trade in Services, and the China International Consumer Products Expo. Those exhibitions have shown the world China's confidence and determination in promoting high-level opening up and its actions to create an international platform for countries to share opportunities and expand exchanges.

Why will we host the Chain Expo? Earlier, I introduced the main information and characteristics of this expo. As a new window for China to foster a new development pattern and a new platform for promoting high-level opening up, the expo is the world's first high-level supply chain-themed exhibition. We often say that "the green lotus leaves stretch to the horizon and the lotus flowers look incredibly red in the sunshine." We hope that the expo will become a spotlight among various exhibitions hosted by China after the 20th CPC National Congress. We also hope that the expo will be in line with the expectations of Chinese and foreign enterprises, in line with advancing Chinese modernization on all fronts, and in line with efforts to build an open world economy, therefore become a new international public product that is beneficial to all and shared by all.

If there is anything different from other exhibitions, I would list the following three aspects:

First, the vision of the expo is different. As mentioned earlier, President Xi Jinping has on many occasions stated that China is committed to keeping global industrial and supply chains stable and smooth, which fully reflects the shared aspiration of the vast majority of countries and enterprises in the world. Currently, supply chain is a "hot word" and "key word" regarding the world economy. Themed "Connecting the World for a Shared Future,” the expo will help to build more consensus for openness. It will also encourage countries to jointly overcome the difficulties and challenges confronting global economic growth and bring a bright future for global development through openness. At the same time, the expo uses the supply chain as a medium to bring together global business enterprises through exhibitions, forums, seminars, and other ways, to explore upstream and downstream partners in the supply chain and jointly send a strong message of maintaining the stability and smoothness of the global industrial and supply chains.

Second, the way of organizing is different. The Chain Expo is not just showcasing a single type of product, but showcasing the chain and ecosystem. Looking vertically, we will display globally leading products and technologies in the upstream, midstream, and downstream of various chains, highlighting green development, low-carbon environmental protection, and digital transformation. Looking horizontally, we will showcase supply chain services, including finance, logistics, trade consulting, commercial and legal affairs, culture, tourism and creative design, fostering an ecosystem for the development of related industries. The exhibitors of the expo are not only the leading enterprises in the supply chain, but also the small and medium-sized specialized and sophisticated enterprises that produce new and unique products, “little giant” enterprises, as well as “hidden champion" companies. What you see is not an exhibition of a certain enterprise or product, but a complete ecosystem of the five major sectors. Enterprises that have signed up for the expo are mainly central government enterprises, state-owned enterprises, and the world's top 500 enterprises. Therefore, in the process of promotion, we call for paying more attention to the resilience and inclusiveness of the entire industrial and supply chains and bring upstream and downstream, small and medium-sized enterprises to the expo.

Third, the aim of the expo is different. Rather than simply showcasing products or signing orders, the Chain Expo focuses on the exchange and cooperation among upstream, midstream and downstream enterprises in the supply chain, enabling them to find their accurate position in the supply chain and the most suitable partners for cooperation. The expo not only focuses on short-term transactions but also on long-term cooperation and common development. This is what sets the Chain Expo apart from other exhibitions, and the sense of gain for enterprises is different. The Chain Expo is not only open to professional purchasers but also welcomes universities, research institutes, and the general public, allowing everyone to see the latest development forms and future development trends of industrial and supply chains for the five sectors. The Chain Expo will become a cooperation platform for enterprises to seize new opportunities and expand their international circle of friends, and it will also become a feast of ideas for industry exchanges, discussions, and development. We will hold five professional forums together with relevant international organizations, domestic industry associations and government departments. Meanwhile, we will adopt an interactive, experiential, and immersive presentation that makes everyone personally experience the development of modern industrial and supply chains as well as the development of modern science and technology, and feel that technology improves life and technology creates the future. Thank you.

Economic Daily:

At present, the risk of world economic recession is on the ascent, the growth of external demand is slowing down, and the environment for the development of our foreign trade is complicated and challenging. What specific measures does CCPIT have in promoting the stable scale and optimized structure of foreign trade? Thank you.

Yu Jianlong:

Thank you for your question. The 20th CPC National Congress made comprehensive strategic plans for accelerating China’s transformation into a trader of quality. At present, with the weak recovery of the world economy, the shrinking external demand, and the intensifying geopolitical conflicts and protectionism, foreign trade enterprises are facing greater risks and challenges. We give full play to our functions of connecting government and enterprises, integrating internal and external sources, and ensuring stable supply and demand, using every possible means to help companies solve difficulties and expand markets, to contribute to promoting stable scale and optimal structure of foreign trade and accelerating China’s transformation into a trader of quality.

First, we have strengthened trade promotion. Trade promotion is the expertise of CCPIT. We continue the promotion and implementation of RCEP and other free trade agreements and guide enterprises to make full use of the preferential policies. According to statistics, the national trade promotion system held more than 200 forums and training sessions last year, benefiting hundreds of thousands of enterprises. This year we have further intensified our work. In the first five months, the number of certificates of origin, ATA carnets, and commercial certificates issued by the national trade promotion system has increased significantly year-on-year. We continue to strengthen the Internet Plus comprehensive services, promote the intelligent and convenient services of certificate of origin and ATA carnet, and at the same time intensify our efforts to hold training and seminars in various places.

Second, we have created a platform for trade and economic cooperation. Recently, the General Office of the State Council issued the “Opinions on Promoting the Stable Scale and Optimum Structure of Foreign Trade ,” emphasizing the optimization of the supply and purchase dovetailing of key exhibitions, promoting the full recovery of domestic offline exhibitions, and requiring localities, trade promotion agencies, and business associations to further increase support for enterprises to participate in various overseas exhibitions, continue to cultivate self-organized exhibitions abroad and expand the scale of exhibitions. We focus on holding the first Chain Expo, global trade and investment promotion summit, and other activities to build more platforms for foreign trade enterprises to display and negotiate cooperation. Just as Mr. Ren said that the 2023 Global Trade and Investment Promotion Summit we held on May 24 made representatives of many foreign companies and business associations take this opportunity to communicate and negotiate with Chinese companies. Since the beginning of this year, the CCPIT has completed the approval of the first group of 519 applications for holding trade and economic exhibitions abroad and is reviewing the second group of more than 400 projects. We will hold a series of exhibitions for key global markets and industries.

Third, we have expanded our commercial legal services. CCPIT has a long history of providing commercial legal services with complete institutions and a wealth of talents. In recent years, we have further improved the full-chain, one-stop, international commercial legal service system and strengthened legal services such as international trade and economic arbitration, commercial mediation, and intellectual property protection. Through our online legal service platform, ctils.com, about 300,000 legal consultations have been provided for enterprises, and the difficulties encountered by enterprises in transnational operations have been answered in a timely manner. At the same time, we strengthened the construction of enterprises’ compliance and helped more than 5,000 enterprises investigate compliance risks in international operations.

Fourth, we have optimized the supply of public goods. We have compiled and issued foreign investment guides for 108 countries and specific legal guides for 104 countries so that enterprises can better understand the business environment in these countries. We released the International Intellectual Property Protection Index Report and the Global Economic and Trade Measures Index for the first time in the world and achieved remarkable results. We have improved the research and working mechanism for foreign trade enterprises, closely tracked the situation, and collected problems and appeals from various enterprises in a timely manner. Just as Mr. Ren Hongbin said that we have set up a special working group for foreign-invested enterprises to respond to and promote the resolution of more than 5,000 demands of foreign-invested enterprises in a timely manner. This work can also provide references for government departments to make decisions.

In the next step, we will continue to closely track the operation of foreign trade with the local governments and relevant departments, do a good job in studying and analyzing the situation, improve the service quality for enterprises, and take the first Chain Expo as a starting point to seize opportunities and expand markets for enterprises to contribute more to the consolidation of the economy. Thank you!

National Business Daily:

We have learned that the first Chain Expo will invite the world's most representative enterprises to attend. May I ask about the progress concerning the participation of exhibitors and potential buyers? What services will be provided for exhibitors? Thank you.

Nie Wenhui:

Thank you for your questions. It can be said that the invitation of exhibitors and potential buyers is the key to the expo's success. The active participation of many Chinese and foreign enterprises has laid a solid foundation for us to do a good job in the next step of preparation. Recently, the CCPIT has visited more than 10 provinces and municipalities for promotion. Two signing ceremonies for exhibitors were held in Tianjin and Beijing, and overseas road shows were held in Germany, Belgium and Switzerland. The invitation of exhibitors has been effective and orderly, with noticeable results. We are very selective, and so far hundreds of leading Chinese and foreign enterprises have confirmed their participation. More than 300 enterprises are expected to participate in the exhibition, with about 30% being international exhibitors. The number of professional buyers and visitors is expected to exceed 100,000. The proportion of international buyers is projected to exceed 40%, covering more than 50 countries and regions.

In the next step, we will also conduct road shows in France, Saudi Arabia and other countries. In addition, we will continue to invite exhibitions and potential buyers at home and sincerely welcome more enterprises to sign up for the exhibition.

Everyone is eager to know about the services provided to exhibitors. Over the years, the CCPIT has accumulated a wealth of experience in running exhibitions and conferences. The organizer of the Chain Expo, China International Exhibition Center Group Limited (CIEC), is a direct subsidiary of the CCPIT and enjoys an excellent reputation in China's exhibition industry. The CIEC has two exhibition venues. The first Chain Expo will be held in the Shunyi venue, and all kinds of services will be available. We will provide professional and international full-chain services for all exhibitors and potential buyers. First, we will upgrade the exhibition hall to create a better environment for exhibition and participation. Second, we will recommend transportation agents to assist overseas exhibitors in customs declarations and clearance and provide convenience in customs and transportation services. Third, we will formulate green construction standards and openly solicit high-quality construction service providers to ensure display effect. Fourth, we will introduce professional service providers such as business consulting and multilingual translation, strengthen site management, and offer one-stop services for exhibitors and visitors. Fifth, we will enhance IPR-related legal consultation and dispute handling. Thank you.

Yicai:

In stark contrast with some Western countries' rhetoric about decoupling or cutting supply chains, China has consistently upheld the principles of deepening international cooperation and maintaining the stability of the global supply chain. May I ask the CCPIT what efforts Chinese enterprises have made to maintain the stability of the international supply chain? What risks and challenges are still posing a threat? Thank you.

Yu Jianlong:

Thank you. It's an excellent question. Simply put, Chinese enterprises have made substantial efforts to maintain the stability of the global industrial chain and supply chain. However, there are still significant risks and challenges. As we all know, the international supply chain can be likened to the human body's circulatory system, where interconnected enterprises act as the vital red blood cells that sustain the system. Ensuring the smooth and stable operation of global industrial and supply chains is crucial for preserving the vitality of global economic development. The world functions as an interconnected entity, and economic progress would be unattainable without the proper circulation of resources and trade. The acts of decoupling or cutting supply chains and erecting walls or barriers not only disrupt market rules and the international trade order but also undermine the foundation of efficient global cooperation, posing a threat to the stability of global industrial and supply chains. Such actions contradict the objective laws of the economy, causing harm to others without benefiting oneself while impeding worldwide economic recovery.

China has worked to promote and maintain global industrial and supply chains, ensuring they remain stable and smooth. It is the only country in the world equipped with a complete range of industries and a major center for worldwide manufacturing and supply chains. As the world's second-largest economy, China has the highest volume of trade in goods and takes the lead in attracting foreign investment and making outbound investments. Chinese enterprises are the most vibrant contributors to global supply chains. The Chinese business community has always played a vital role in maintaining the stability of global industrial and supply chains. We should ensure smooth supply chains and oppose decoupling or cutting supply chains.

At the second meeting of the APEC Business Advisory Council held not long ago, the CCPIT organized and led representatives of Chinese entrepreneurs. This helped to facilitate the draft of a letter by the Asia-Pacific business community to trade ministers of APEC countries. Focusing on supply chains, digital trade, trade and climate, new energy vehicles, and other issues, we called on the trade ministers to oppose protectionism, practice non-discriminatory treatment, and advance open and free trade, demonstrating the shared aspiration and strong position of the Asian-Pacific business community for opposing trade protectionism and promoting mutually beneficial cooperation. Especially concerning the issue of supply chains, the Chinese business community has proactively expressed their views and guided the meeting to have an in-depth discussion about the enormous negative impact of fragmentation of trade and technology decoupling on regional economic development, especially the destructive impact on regional supply chains due to politicizing and weaponizing chip supply chains by certain countries, gaining understanding and support of all parties. And the letter proposed opposing protectionism and administrative measures that disrupt supply chains and creating an inclusive, open, fair, and non-discriminatory environment for the development of digital economy.

In recent years, affected by multiple factors such as COVID-19, global industrial and supply chains have undergone reshaping, reconstruction and adjustment at a faster pace, posing an increased challenge for Chinese enterprises. However, as President Xi Jinping pointed out, "To grow its economy, China must have the courage to swim in the vast ocean of the global market." We also believe that Chinese enterprises are brave and capable enough to take the lead in the vast ocean of the global economy. 

Indeed, not only Chinese enterprises but also the whole international business community face these risks and challenges. By hosting the Chain Expo, we aim to set up a beacon for keeping global industrial and supply chains stable and smooth. Our goal is to provide guidance and build platforms for win-win cooperation between Chinese and foreign enterprises to enable enterprises to better explore collaboration on this platform and drive global economic recovery and growth. Thank you.

Xie Yingjun:

The last two questions, please.

Macau Monthly:

The First China International Supply Chain Expo focuses on five major chains, such as smart vehicles. What are the considerations for that? Thank you.

Nie Wenhui:

Thank you for your question. Concerning the layout of the exhibition area at the first Chain Expo, we carried out careful research and analysis. We have had in-depth exchanges and discussions with hundreds of domestic and foreign enterprises and professional institutions. Considering all parties' views, we selected five sectors: smart vehicles, green agriculture, clean energy, digital technology and healthy living. They are all fundamental, leading industries with long chains and close attention from all parties. That has gained full approval from all parties, including academicians and experts in relevant fields, multinational companies, and many leading enterprises in industrial chains. Based on the current condition, domestic and foreign enterprises are eager to participate as exhibitors or seek business opportunities, proving that these five chains are the right choice.

First, the automobile industry is one of the largest manufacturing industries in the world. The smart vehicle chain part will showcase the key technologies, products, and services in the upstream, midstream, and downstream of the new energy vehicle industrial chain. These include core raw materials, key components and power systems.

Second, agriculture is crucial for sustainable development. The green agriculture chain part will display the key technologies and products from all links of this field. These include seed research and development, green agrochemical products, agricultural machinery, and agricultural product processing.

Third, clean energy is vital for humanity's future development. The clean energy chain part will present the new and latest technologies, products, and development trends in wind power, photovoltaic power, energy storage, hydrogen energy, smart grid, and the low-carbon transformation of traditional energy.

Fourth, digital technology is a crucial engine for economic development. The digital technology chain section will display cutting-edge technologies, solutions and applications where various industries are empowered and demonstrate the key links and elements of the digital economy.

Fifth, health represents people's aspirations for a better life. The healthy life chain section will showcase products and services in pregnancy and infant care, nutrition and personal care, and elder care in a panoramic presentation covering the whole life process. 

In addition, the supply chain service exhibition area will present comprehensive logistics, Internet of Things technology, automated delivery, and services such as finance, insurance, and commercial law. Thank you.

N Videos at Southern Metropolis Daily: 

Global industrial systems and industrial and supply chains are becoming more diversified. Maintaining stable and smooth industrial and supply chains has drawn attention from governments and business communities of all countries. Under such circumstances, what are CCPIT's considerations for organizing the Chain Expo? Thank you.

Ren Hongbin:

Thank you for your question. Just now, my colleagues also talked about it. The reasons for holding the Chain Expo can be explained in three aspects. First, organizing the expo is a concrete action to promote international cooperation in global industrial and supply chains. On many major international occasions, such as the G20, APEC and BRICS meetings, President Xi Jinping has stressed China's principles and positions on keeping global industrial and supply chains stable and smooth. China has, together with many regional organizations and countries, launched initiatives to enhance cooperation in supply chains. The Chain Expo presents China's solution to building a global industrial and supply chain system that is secure, stable, smooth, efficient, open, inclusive, and mutually beneficial. It also provides a new exchange and cooperation platform for maintaining stable and smooth industrial and supply chains across the world after the pandemic.

Second, hosting the expo is our concrete response to the common pursuit of the global business community. The CCPIT has developed a network of agencies at home and abroad. It has 925 regional and industrial sub-councils in China and 30 representative offices abroad. It has established multilateral and bilateral business cooperation mechanisms with its counterparts in over 140 countries and regions. Keeping industrial and supply chains stable and smooth has always been the focus of our daily exchanges with domestic and foreign enterprises. Maintaining the resilience and stability of global industrial and supply chains is also a consensus and common aspiration. Not long ago, the Beijing Initiative was released at the Global Trade and Investment Promotion Summit 2023 that we held. Safeguarding the security and stability of global industrial and supply chains was also included in the initiative.

Third and very importantly, the organization of the expo is a concrete action to continue to advance the high-quality development of the cause of trade promotion as we stand at the historic starting point for the 70th anniversary of the CCPIT. As was mentioned just now, in May last year, President Xi Jinping delivered an important video address at the Conference on the 70th Anniversary of CCPIT & Global Trade and Investment Promotion Summit, proposing an important initiative to promote the interconnectivity of industrial and supply chains to the international business community. In his address, President Xi Jinping fully recognized the glorious achievements the CCPIT has made in the past 70 years and expressed his hope that the CCPIT will "continue to break new ground with its tradition of excellence, strengthen its service network for businesses, expand its international circle of friends, and score still greater achievements in contributing to high-quality development and a new development paradigm in China and to an open world economy." The organization of the Chain Expo is the concrete action taken by the new generation of staff at the CCPIT to implement the guiding principles of President Xi Jinping's video address, inherit and carry forward the fine traditions over the past 70 years and build on this achievement to write a new chapter of trade promotion in the new journey. The CCPIT will work with domestic and foreign enterprises as always and jointly build more platforms of cooperation and exchanges, to further liberalize and facilitate global trade and investment, contribute to an economic globalization that is more open, inclusive, balanced and beneficial for all, and make the global governance system more just and equitable. Here, we call on reporters to present the Chain Expo with us. This will enable us to develop a new platform of exchange and cooperation for the global business community and jointly contribute to global economic recovery after the pandemic.

Thanks again to our friends from the media. We welcome you to follow, cover and promote the Chain Expo. Let's look forward to late November this year and witness the success of the first Chain Expo. Thank you, everyone!

Xie Yingjun:

Thanks for the introduction by Mr. Ren and all the speakers, as well as the participation of our media friends. Today's briefing is now concluded. Goodbye!

Translated and edited by Wang Yiming, Yuan Fang, Yang Xi, Zhang Junmian, Dong Qingpei, Huang Shan, Yan Bin, Zhou Jing, Liu Caiyi, Xu Kailin, Liu Sitong, Li Huiru, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Wang Xiangxi, minister of emergency management

Mr. Song Yuanming, vice minister of emergency management

Mr. Wang Daoxi, vice minister of emergency management

Mr. Xu Ping, political commissar of the National Fire and Rescue Administration 

Mr. Min Yiren, administrator of the China Earthquake Administration 

Mr. Huang Jinsheng, administrator of the National Mine Safety Administration

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

June 8, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is our 17th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Wang Xiangxi, minister of emergency management, to brief you on implementing the major decisions and plans of the 20th National Congress of the Communist Party of China (CPC) and promoting the modernization of the emergency management system and its capacity. He will also take your questions. In addition, we are also joined today by Mr. Song Yuanming, vice minister of emergency management, Mr. Wang Daoxi, vice minister of emergency management, Mr. Xu Ping, political commissar of the National Fire and Rescue Administration, Mr. Min Yiren, administrator of the China Earthquake Administration, and Mr. Huang Jinsheng, administrator of the National Mine Safety Administration.

Now, I'll give the floor to Mr. Wang for a brief introduction.

Wang Xiangxi:

Thank you, ladies and gentlemen, and friends from the media. Good morning! It gives me great pleasure to be here with you today. First, on behalf of the Ministry of Emergency Management (MEM), I would like to sincerely thank the media for your continuous care, support and assistance in the field of emergency management. Today, my colleagues and I will communicate with you about implementing the major decisions and plans of the 20th CPC National Congress and promoting the modernization of the emergency management system and its capacity.

Established in 2018 as part of reforming Party and state institutions, the MEM bears crucial responsibility for preventing and mitigating major safety risks, responding promptly to various disasters and accidents, and safeguarding the lives and property of the public while maintaining social stability. The ministry manages the National Fire and Rescue Administration, the National Mine Safety Administration, and the China Earthquake Administration. Over the years, we have steadfastly followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, diligently implemented the decisions and directives of the Party Central Committee and the State Council, and worked collaboratively with relevant departments to effectively prevent, mitigate and respond to risks, thereby ensuring safety in production and comprehensive disaster prevention, mitigation and relief of the country. Between 2018 and 2022, the total number of nationwide production safety accidents and associated fatalities decreased by 80.8% and 51.4%, respectively, compared to the previous five years. Additionally, the number of deaths and missing persons due to natural disasters declined by 54.3% compared to the preceding five years.

The report to the 20th CPC National Congress made arrangements to enhance public safety governance in a specific section and put forward clear requirements for emergency management. Taking the implementation of the guiding principles of the 20th CPC National Congress as its primary political task, the MEM has focused on vigorous implementation, pursued high-quality development with high-level safety, and ensured a new development pattern with a new security architecture . Specifically, our efforts in this regard lie in the following four aspects:

First, the MEM focuses on system improvement. In accordance with the requirement of "establishing an overall safety and emergency response framework, " the MEM has leveraged the comprehensive strength and expertise of related government departments. It has worked to enhance coordination between unified and separate management, prevention and rescue efforts, and higher and lower levels of government. It has also worked to ensure that all links are held accountable in emergencies and develop an emergency response working pattern featuring concerted efforts, collaboration and high efficiency. Since the beginning of this year, the MEM has made extra efforts to improve responsibility systems, optimize command mechanisms, strengthen the legal structure and enhance primary-level emergency response and management capabilities. For example, regarding the difficulties of duty delivery, the MEM provided guidance to all localities. This guidance included a directive to establish a clear list of responsibilities for Party and government leaders in ensuring safe production and managing and reducing disasters. The MEM also specified regulatory departments' industrial supervision responsibilities. According to this specification, when these departments oversee businesses, industries, and production and business operations, they must supervise safety issues. Moreover, the MEM specified regulatory bodies' duty regarding the possible risks brought about by new business forms and materials. The MEM also strengthened the fulfillment of enterprises' primary responsibilities. It carried out safety management assessments for persons in charge and safety management staff of centrally-administered state-owned enterprises (SOEs), local SOEs and private enterprises in high-risk sectors. For areas and enterprises experiencing frequent occurrences of accidents, the MEM has issued warnings and admonitions, sent public notifications, dispatched on-site supervision teams and exposed cases via media outlets in a bid to ensure the fulfillment of duties.

Second, the MEM focuses on prevention. In accordance with the requirement of "driving a shift in public safety governance toward a model of prevention ," the MEM has paid more attention to preventive work, prioritized safety risk prevention and control at the source, and made efforts on regular management, monitoring and early warning, and engineering governance, in a bid to create a safe environment which is conducive to development. So far, the MEM has conducted online monitoring for over 6,900 enterprises with major hazard installations and hazardous chemical firms, 3,400 coal mines, and 2,400 tailings ponds of third-class or above. Automatic alarms will be triggered with related emergency response measures for any incidents.

Thirdly, we are focusing on targeted rectification efforts. This year, we have witnessed a decline in the number of accidents and fatalities related to workplace safety; however, there has been a resurgence of serious and major accidents. So this year, we launched a nationwide campaign to identify and address hazards of major accidents. Drawing from the lessons learned, we are implementing specific measures to tackle prominent challenges in mine safety, fire safety, and hazardous chemical products . To improve the impact of our rectification efforts, we are prioritizing the improvement of risk and hazard investigation and the effectiveness of rectification while also enhancing the strong desire and capabilities in identifying and solving problems. We are closely monitoring areas such as welding and cutting operations, construction activities that surpass design limits on open-pit mine slopes, and sites with poor management practices. We have deployed multiple law enforcement teams to conduct unannounced visits and inspections in key regions, and their findings have been publicly disclosed through mainstream media. Additionally, we have dispatched 20 comprehensive inspection teams to supervise and inspect, ensuring the successful implementation of the rectification campaign.

Fourthly, we are dedicated to enhancing our capabilities. With a focus on strengthening disaster prevention, mitigation, and response capacities for major public emergencies, we have been continuously implementing key projects for natural disaster prevention and control. Our goal is to establish an emergency rescue system with characterized by a comprehensive national fire and rescue force supported by specialized rescue teams, military emergency units, and collaboration with social forces. Currently, all six national-level regional rescue centers have already started construction. In May of this year, we conducted the Emergency Mission 2023 exercise in Yunnan, which tested and honed our earthquake rescue capabilities in an all-around way in high-mountain and canyon regions.

As we are currently marking the 22nd national workplace safety month, we hope that the media community will continue their support and engagement in emergency management. By actively promoting and disseminating safety knowledge, we aim to raise safety consciousness and emergency preparedness among the public, where individuals understand the importance of safety and possess the skills necessary to respond effectively in crisis situations.

That's all my opening remarks. Next, my colleagues and I are ready to answer your questions. We look forward to exchanging ideas with all of you. Thank you.

Chen Wenjun:

Thank you, Mr. Wang. The floor is now open for questions. Please identify the news outlet you represent before raising your questions.

China Central Television:

Since the founding of the MEM, we have seen marked improvement in the country's rescue effectiveness in multiple disaster relief scenarios. What measures has the ministry taken to improve emergency rescue capabilities to meet the requirements for addressing all types of disasters and major emergencies? Thank you.

Wang Xiangxi:

Thank you. I'll take this question. Over the years, under the strong leadership of the CPC Central Committee and the State Council, we have seen significant improvement in our emergency relief capabilities as we have successfully handled a series of major natural disasters and some serious and major accidents. Notable examples include the efficient and organized rescue and relief operations carried out during the Luding Earthquake in Sichuan province and the mountain fire in Chongqing. These achievements can be attributed to China's political advantage, which stems from the centralized and unified leadership of the CPC, as well as the strengths of our system that allows us to mobilize resources effectively to accomplish major missions. Additionally, the organizational advantages provided by the Party leadership have played a crucial role. To enhance our emergency rescue capabilities, the following work has been done in recent years:

Firstly, we have placed great emphasis on strengthening the national comprehensive firefighting and rescue team. This team, which serves as the main force and national team in emergency rescue, used to primarily focus on fire prevention and extinguishing. However, it has now taken on the responsibility of handling rescue missions for all types of disasters and major emergencies. Through reform and transformation, we have established specialized teams for water, mountain, and earthquake rescue, totaling over 5,000 teams. Moreover, our rescue equipment has undergone significant enhancements, including the deployment of unmanned aerial vehicles, large-scale drainage pumps, and rescue robots. With the support of this team, we have set up six national-level regional emergency rescue centers across the country and strengthened our aviation rescue capabilities. This dedicated team, inspired by the guidance of General Secretary Xi Jinping, consistently demonstrates its commitment to the people by fearlessly stepping forward and confronting dangers during critical moments. They have earned high praise from local governments, the public, and the international community for their selfless contributions for their participation in international rescue operations following the major earthquake in Turkey this February.

Secondly, we have adopted a coordinated approach to the development and coordination of various rescue forces. Leveraging the resources of relevant enterprises, particularly state-owned enterprises (SOEs) and centrally administered SOEs, we have established 102 national emergency rescue teams dedicated to ensuring workplace safety. These teams cover high-risk industries such as mining, hazardous chemical products, and tunnel construction. Additionally, we have established seven specialized engineering emergency response teams. Furthermore, we have actively integrated social forces into the rescue system, resulting in approximately 2,300 teams comprising nearly 50,000 personnel. Moving forward, we will continue to enhance the regulation and development of social forces within the rescue system. In addition, we have established effective coordination and synergy mechanism with the military to carry out joint rescue in times of major disasters .

Third, we have established and refined the emergency rescue command mechanism. The national emergency operations center has been built and put into operation. We have also established a mechanism combining central and local command with professional team command. We have strengthened the coordination mechanism between localities and the military. Our focus has been on building command systems and enhancing command abilities at the grassroots level, improving the ability to evaluate emergency incidents and conduct on-site command.

Fourth, we have focused on improving our ability to fight large-scale and difficult battles. We have conducted training to enhance our capabilities in line with military standards. With complex scenarios in consideration, we made the training and exercises challenging, quickly strengthened efforts to station response teams at high-risk areas in advance, and rigorously enhanced emergency preparedness. In recent years, we have launched joint emergency exercises with local governments annually, particularly earthquake drills. This year, we conducted one in Yunnan province. Under extreme conditions, such as network and power outages, as well as road blockages, we trained our rescue teams, improved plans, and coordinated working mechanisms, enhancing their abilities through exercises.

That was my answer. Thank you.

Beijing Youth Daily:

The Work Safety Commission under China's State Council recently carried out a special operation to investigate and rectify hidden safety risks to prevent major accidents . How is the operation different from previous ones? What progress and achievements have we achieved? Thank you.

Song Yuanming:

Thank you. As Mr. Wang just mentioned, the operation is mainly designed to implement the guiding principles of the 20th CPC National Congress and the instructions of General Secretary Xi Jinping on production safety. The State Council's Work Safety Commission has done research and arranged the special operation to investigate and rectify hidden safety risks to prevent major accidents in 2023. This operation was reviewed at the plenary meeting of the State Council's Work Safety Commission and approved by Premier Li Qiang. This action revolves around two aspects proposed by Vice Premier Zhang Guoqing, which are to effectively improve the quality of hidden risk investigation and rectification and to effectively enhance the willingness and ability to uncover and solve problems. It encompasses three aspects: the primary responsibility of enterprises, the regulatory responsibility of various departments, and the leadership responsibility of local Party committees and governments. Each party is assigned five critical tasks and they are required to coordinate to achieve practical results during this operation. Compared with previous operations, this one has the following features:

First, we are focusing on major hidden risks. Our focus lies on major accident hazards that have the potential to result in mass casualties. These hazards include uncompliant hot work operation, disorganized management of outsourcing and leasing, enterprises not conducting emergency drills, employees being unfamiliar with escape exits, and other lessons learned from previous accidents. We make the priorities clear and don't target all issues indiscriminately.

Second, we are focusing on the "key few." Those holding principal positions in leadership are the first to be held accountable for eliminating major accident hazards in accordance with the law. This operation focuses on the "key few," requiring principal members of leadership teams in enterprise s to take the lead in studying and organizing the investigation and rectification of major accident hazards. As the person in charge of the enterprise, they must lead the entire management team and all employees to implement their responsibilities.

Third, we are adopting a principle of "politeness first and force later." The special action requires all enterprises to conduct self-examination and self-correction for one to two months. During this period, enterprises can hire experts to help them uncover and solve problems or apply to the government for assistance and guidance. After these efforts, the government regulatory departments will make efforts to ensure precise and strict law enforcement. We will give companies time to check and correct their problems. However, we will punish them severely if they do not report or correct their problems. We will punish both the company and those who are the first to be held accountable in the company.

Fourth, focusing on "mechanism innovation." We require law enforcement teams to study and receive training first before conducting supervision and law enforcement. Law enforcement teams must also learn the criteria for judging major accident hazards. They are required to study them thoroughly before engaging in law enforcement, thereby improving the quality and ability of risk investigation. Additionally, we have designed a responsibility tracking system for safety supervision and law enforcement, which means "whoever checks is to be responsible." We have also developed an anonymous reporting and reward mechanism, focusing on solving problems such as failure to detect major hazards, failure to follow up on rectification after detecting major hazards, and inaccurate law enforcement. These efforts will help enhance the willingness and ability to uncover and solve problems.

The aforementioned four characteristics are something that I'd like to share. As for the progress of the special action, I'd like to say that all regions and relevant departments have completed the arrangements made in the first phase. Thirty-two provincial-level units and 35 member units of the State Council's Work Safety Commission have formulated and issued implementation plans for the special action in light of their actual conditions, and they have all made special deployments in this regard. Moreover, 13 industries have formulated and released 25 standards of judgment for identifying hidden dangers that can cause major accidents. The Office of the State Council's Work Safety Commission has set up 20 inspection teams to carry out supervision and inspection across the country. In addition, over 1,000 provincial-level working groups from all regions have been sent to prefecture-level cities to carry out supervision and inspection. Governments at all levels and all departments have inspected more than 1.2 million enterprises, ferreting out over 4.6 million hidden dangers, with more than 19,000 of them can cause major accidents. As a result, enterprises have been fined for more than 700 million yuan, and over 35,000 companies have been ordered to suspend production for rectification. Governments at all levels and all departments have also offered help and guidance for 307,000 enterprises and reward more than 4.5 million yuan for those who expose or offer clues. 

Going forward, the Office of the Work Safety Commission under the State Council will continue to step up efforts to strengthen management, investigation, supervision and assignment, as well as having talks and exposure. We will continue to strengthen performance assessment so as to ensure that the benefits of the special action will be fully delivered. 

Thank you.

21st Century Business Herald: 

What is the flood control situation like this year, as northern and southern China have both entered the flood season? What measures will be adopted by the General Office of the State Flood Control and Drought Relief Headquarters and the MEM? Thank you.

Wang Daoxi:

Thank you for your concern about the work related to flood control and drought relief. According to the latest meteorological and hydrological data, there will be two rain belts in northern and southern China during the main flood season (from June to August) this year. Precipitation is expected to increase by over 10% in northeast, north, east, and south China, and precipitation in the middle reaches of the Yangtze River is expected to drop 20-50%. Major floods may occur in the middle and lower reaches of the Songhua River, the upper reaches of the Nenjiang River, the middle reaches of the Heilongjiang River, the Pearl River basin, Poyang Lake, and the Minjiang River. Summer drought may occur temporarily in Xinjiang, as well as the middle reaches and the eastern part of the upper reaches of the Yangtze River. The number of typhoons making landfall in the country is expected to be the same as usual, with their paths being expected to generally go west and northwest, affecting the coastal areas in south and east China.

In order to win the tough battle of flood control and drought relief this year, the State Flood Control and Drought Relief Headquarters has confirmed 2,521 people administratively responsible for the flood control and drought relief work nationwide this year. We have sent eight inspection teams to seven major river basins in 17 key provinces across the country to inspect their preparation work related to flood control and send targeted supervision lists to ensure those found to have problems will carry out the rectification work. Moreover, the State Flood Control and Drought Relief Headquarters held joint drills for flood and typhoon prevention ahead of the flood season in the Yangtze River Delta area, and it also held national flood control and drought relief emergency response plans table-top exercises. By doing so, the coordinated working mechanism has been improved in an all-around manner. Going forward, we will make stepped-up efforts in the following aspects:

First, we will make sure that relevant departments will fulfill their responsibilities when it comes to flood control and drought relief. We will step up efforts to reinforce the system wherein the leading government officials shall assume overall responsibility for flood control and ensure that all the responsibilities can be fulfilled, including those regarding management, inspection, and techniques. We will urge local governments to establish a five-level responsibility system for flood control--the provincial, city, county, township, and village, with governments at higher administrative levels being responsible for that at lower levels. We will clarify the responsibilities and tasks for those who are held accountable for flood control at all levels. In particular, they need to well understand flood control plans and key jobs, as well as the risks and hidden dangers in their areas of responsibility. Local Party and government leaders have been required to direct the response work at the crucial moment for flood control, and those responsible for relevant jobs need to go to the front line as well. 

Second, we will strengthen coordination between monitoring and early warning systems and emergency response. We will organize meteorological, hydrological, and natural resources departments to carry out joint studies on flood and drought situation and respond according to plans and research results in a timely manner. Moreover, we will send working groups and experts to the frontline to assist local governments and departments to address flooding. We will help local governments improve the coordination mechanism of meteorological early warning and emergency response, ensuring that they are able to respond as soon as there is a warning. We will ramp up efforts to implement the “call and response” early warning mechanism, which can reach those in charge at the primary level so as to ensure that they will be able to adopt prevention measures as soon as possible.

Third, we will make greater efforts to strengthen inspection of major projects. We will urge local governments and departments to investigate hidden dangers and strengthen inspection over the key parts of major dams, hydroelectric power stations, and infrastructure facilities, as well as the weak links of dangerous reservoirs, structures passing through levee embankments, check dams, and tailing ponds so as to ensure early detection and quick responses.

Fourth, we will strengthen emergency rescue and evacuation, with a particular emphasis on areas prone to flooding. This involves ensuring the presence of pre-positioned emergency response teams and the availability of essential supplies and equipment. We will guide every region to implement evacuation measures outlined in the contingency plans. Priority must be given to the timely and decisive relocation of individuals from high-risk areas. The key focus areas include determining who should be evacuated, who should organize it, when to evacuate, selecting evacuation locations, and effectively managing the entire process. The aim is to facilitate comprehensive and timely evacuations for those requiring evacuation, thereby minimizing the risk of harm to individuals. Thank you.

Red Star News:

Since the second half of last year, major and catastrophic fire accidents have occurred in Anyang in Henan province, Jinhua in Zhejiang province, Cangzhou in Hebei province, and Fengtai district in Beijing. What common problems have been exposed by these fire accidents, and what targeted measures have been taken in response? Thank you.

Xu Ping:

Thank you for your questions. The fires mentioned just now resulted in serious casualties, especially the fire at Beijing Changfeng Hospital, which greatly compromised the bottom line of people's safety. Based on our analysis, these fires have revealed the following common problems:

First, there is a prominent issue of carrying out hot work and welding operations that violate regulations. The several fires mentioned were all a direct result of such rule-breaking activities. The necessary permits for such procedures had not been obtained, and there was a lack of fire protection measures at the worksites. The construction teams were not qualified, the construction personnel were not adequately trained, and the necessary safety measures had not been taken at the sites. 

Second, the problem of illegal construction is prominent. In renovation projects, some construction units engage in illegal subcontracting and cascading subcontracting practices. As a result, the management of the construction site is chaotic, which increases safety risks.

Third, there is a lack of safety management in leased factory buildings. The two units in Henan's Anyang and Zhejiang's Jinhua, both being large-scale buildings, were arbitrarily divided into rental spaces without unified management and there was a lack of coordination between enterprises. In particular, there were numerous flammable and combustible items, which posed a serious safety hazard. These incidents have taught us extremely profound lessons.

In response to the lessons revealed by these fires, we have taken the following measures:

First, we are implementing an intensive investigation and rectification of major risk hazards. The nationwide initiative for investigating and rectifying major fire safety risks in 2023 has been launched. It primarily targets three key types of locations: densely populated areas, sensitive and specialized sites, and mixed production and business areas known to pose a high risk of mass casualties and significant societal impact. The efforts focus on eight prominent issues, including unauthorized hot work construction, improper electro-gas welding, inappropriate use of thermal insulation materials, and the presence of flammable decorations. We are utilizing a combination of self-assessment by relevant entities, grassroots inspections, interdepartmental collaboration, and enhanced fire inspections. Strict law enforcement, government intervention, public scrutiny, and credit monitoring measures are being implemented with the utmost determination to eliminate major fire hazards.

Second, we are conducting a wide and comprehensive campaign to raise awareness and increase exposure. Various media platforms are being utilized to publicly report major and catastrophic fire accidents, focusing on spotlighting instances of unauthorized construction, hazardous hot work, welding operations, the presence of unauthorized "factories within factories," and subcontracting practices. Specialized promotional and training videos on fire safety in production facilities and hospitals are being developed. These videos, incorporating real-life fire cases and addressing common fire safety concerns and potential hazards, aim to ensure the enforcement of responsibility measures and disseminate crucial safety guidelines.

Third, we are elevating the capabilities of fire safety governance. Embracing the approach of addressing major risks while preventing minor ones, we maintain a vigilant focus on high-risk sites like high-rise buildings and large commercial complexes, low-security areas such as self-constructed buildings used for commercial purposes, and fire safety risks in new business forms and fields. A differentiated supervisory framework is being implemented, considering the specific characteristics of different categories. This approach emphasizes whole-process collaboration across the entire fire safety chain and between all relevant factors.

Thank you.

Cover News:

In recent years, China has vigorously promoted the construction of the Earthquake Early Warning System (EEWS) . Sichuan, Fujian, Yunnan, and many other places have already started to provide earthquake early warning information services. The National Seismic Intensity Rapid Reporting and Early Warning project is also expected to be completed and accepted by the end of 2023. How is the project going? What changes will it bring to enhance China's earthquake prevention and disaster reduction capabilities? Thank you.

Min Yiren:

Thank you for your concern and support for our earthquake prevention and disaster reduction work. Vigorously advancing the construction of China's earthquake early warning system (EEWS) and implementing the National Seismic Intensity Rapid Reporting and Early Warning project are important measures to implement General Secretary Xi Jinping's new concept on disaster prevention, mitigation and relief. Additionally, the measures will vigorously improve China's capabilities to prevent and mitigate earthquakes. The goal of this project is to establish a national seismic intensity rapid report and early warning observation network. This will allow for nationwide minute-level instrumental seismic intensity rapid reporting and second-level earthquake early warnings in key areas, providing services for the public to reduce disaster and defuse risks and for industries to make emergency responses. Under the supervision and guidance of the Party committee of the MEM, the Party leadership group of the China Earthquake Administration has always regarded the construction of the project as an important political task and has made important progress in promoting its construction and services. It has the following characteristics.

First, we have emphasized technological innovation. We have independently overcome a series of technical issues, including multi-network integration and stable second-level processing of massive real-time data. We have developed comprehensive decision-making processes incorporating multiple algorithms and centers. We have also achieved sub-second information dissemination for a large number of users. As a result of these advancements, we have established the world's largest earthquake early warning system. This has allowed us to make a leap in development, transitioning from minute-level earthquake rapid reporting to second-level earthquake early warning.

Second, we have strengthened integration. We have formed organizational collaborations with education, television broadcasting, and other sectors and departments as well as with local Party committees and governments. We have deepened our strategic and technical cooperation with enterprises such as China National Railway Group, China Tower, PipeChina, Huawei and the Institute of Care-life. Together, we are striving to build a unified network for China's EEWS.

Third, we have strengthened our application services. Upholding our commitment to public welfare and basic services, the earthquake departments have provided standard earthquake early warning information services to all sectors of society. We have encouraged, supported and regulated industry departments and enterprises to develop value-added early warning information services.

At present, the main construction tasks of the project have been completed. We have established 15,391 earthquake early warning stations, three national centers, 31 provincial centers, and 173 prefecture-level information release centers. China's EEWS, which comprises five major systems including station observation, data processing, information services, a communications network, and technical support, has launched pilot services in the Beijing-Tianjin-Hebei region and provinces including Sichuan, Yunnan and Fujian. The system is expected to be fully completed and accepted by the end of this year. Once the project is implemented, it will play a role in disaster reduction in the following ways.

First, the system will act as a first line of defense for earthquake rescue and relief efforts, aiming to reduce the number of casualties resulting from earthquakes. After a destructive earthquake occurs, the EEWS will release early warning information via various channels such as emergency radio, mobile phone, TV, and dedicated terminals. This will provide users in the target area with an early warning within seconds to tens of seconds, allowing for risk mitigation. Within minutes of an earthquake, the system can measure its seismic intensity and quickly analyze the distribution of the hardest-hit areas, providing a scientific basis for decision making and deployment of earthquake relief. On Sept. 5, 2022, the EEWS successfully released early warning information just 6.2 seconds after a 6.8-magnitude earthquake shook Luding county in southwestern China's Sichuan province, achieving full second-level early warning coverage for a population of 1.5 million in the epicenter and its surrounding areas.

Second, it aims to "escort and protect" emergency response for lifeline projects and major infrastructure. By leveraging earthquake warning terminals, emergency broadcasting, and special communication lines, it provides crucial earthquake warning information for automatic emergency response of major strategic infrastructure such as high-speed railways, nuclear power plants, oil and gas pipeline networks, high dam reservoirs, as well as public infrastructure such as high-rise buildings, underground facilities, and large-scale complexes. This fills the gap in cross-industry earthquake emergency linkage services, promotes the expansion from seismic monitoring to earthquake disaster risk monitoring and prevention, and strengthens whole society's capacity to protect against and mitigate earthquake disasters.

Thirdly, it provides strong support for the progress of Earth science and international cooperation on disaster reduction. Leveraging its advantage in having built the world's largest real-time seismic monitoring station network, it provides high-quality scientific data and information to promote innovative development in real-time seismology, real-time disaster studies, and seismic engineering, thereby contributing to the advancement of Earth science. Currently, China's earthquake warning technology has been applied abroad in the construction of the Jakarta-Bandung High-Speed Railway in Indonesia. The China Earthquake Administration will continue to utilize its professional technical advantages to better serve the country's overall diplomacy, strengthen international cooperation in protecting against and mitigating earthquake disasters, and work together to reduce seismic disaster risks.

Going forward, the China Earthquake Administration will continue to improve the construction of the Chinese earthquake warning network, constantly enhancing the safety, reliability, and standardization of earthquake warning services, expanding fields and effectiveness of service, and providing even stronger earthquake safety guarantees for high-quality economic and social development. Thank you.

The Poster News APP:

Every year, the MEM allocates over 10 billion yuan yearly in disaster relief funds and materials in collaboration with relevant departments. Such rescue and assistance are particularly crucial during winter and spring rescue periods and the major flood season, where affected people require timely help to overcome their difficulties. My question is: what measures has the MEM taken to ensure an efficient and orderly allocation and distribution of these funds and materials? Thank you.

Wang Daoxi:

Thank you for the question. We efficiently and orderly allocated and distributed disaster relief funds and materials to support and help affected areas, secured the basic living needs of the disaster-stricken people, assisted them in overcoming their difficulties, and made them feel the care and warmth of the Party and the government, which is an important responsibility and mission of the emergency management authorities and an important project of the heart. In recent years, with the strong central government support of disaster relief funds and materials, resettlement and relief work in various affected areas has been generally stable, recovery and reconstruction of damaged houses have been carried out in an orderly manner, and the basic living needs of disaster-stricken people have been properly ensured. To ensure efficient and orderly allocation and distribution of disaster relief funds and materials, the MEM has worked with relevant departments to carry out works focusing on four aspects:

First, we strengthened top-level design and improved relevant policies and systems. In recent years, the MEM has collaborated with the National Development and Reform Commission, finance and grain storage authorities, and other departments to formulate a series of institutional documents such as the Emergency Material Guarantee Plan During the 14th Five-Year Plan, the Interim Measures for Management of the Central Natural Disaster Relief Funds, the Interim Measures for Reserve Management of the Central Emergency Rescue and Disaster Relief Materials, and the Norms for Winter and Spring Assistance Work for Disaster Victims. We have put forward clear requirements for each link, providing a solid institutional guarantee for the efficient and orderly allocation and distribution of disaster relief funds and materials.

Second, we strengthened coordination and promoted the building of an efficient working mechanism. The MEM has established an inter-ministerial disaster consultation and evaluation mechanism, conducting regular and major special consultations for disasters that provide a powerful decision-making basis for allocating central disaster relief funds and materials. We have also worked with the Ministry of Finance to establish a quick pre-allocation and precise verification mechanism for central disaster relief funds allocation and have been constantly improving it. After the national disaster response is activated, we can initiate the pre-allocation of funds according to the evaluated disaster situation, ensuring the allocation efficiency of disaster relief funds. We have promoted the establishment of multi-departmental coordination, military-civilian linkage support, and participation of private actors such as enterprises, social organizations, and volunteers to form a joint force for material guarantee work.

Third, we have stepped up our service capabilities and built a system to ensure provision of disaster-relief supplies. The MEM has been working with grain reserve authorities and other departments to improve the national layout of central disaster-relief supply reserves, significantly increase their size, and continually extend the selection of supplies. We have guided all localities to deploy these reserves at the grassroots level and set up a mechanism for coordinated emergency response with related enterprises. We have employed various methods, such as physical stocks, agreement reserves, and production capacity reserves, to step up emergency response capabilities and ensure the timely supply of materials. By arranging emergency distribution in a holistic way and maintaining an unobstructed distribution channel for the "last mile," we ensure that no household or individual is left behind. 

Fourth, we have increased supervision to safeguard the vital interests of people affected by disasters. All local governments have been instructed to target affected people and fully consider their needs. Comprehensive account books have been completed, and technological means such as big data comparison have been utilized to ensure that disaster-relief materials and funds are distributed to disaster-stricken households and individuals. The management platform for emergency response resources has been developed and promoted to coordinate the allocation of disaster-relief materials and streamline public rescue channels. We have promptly sent working groups to manage disaster-relief funds and materials, and check, instruct and urge local governments to accelerate distribution in a well-regulated way to ensure the care and help from the Party and the government reach disaster-affected people in a timely manner to guarantee their basic living needs.  

Science and Technology Daily:

The number of smart mines in China continues to increase, and the enthusiasm of enterprises to research, develop and construct smart mines is growing. What is your take on the development of smart mines from the perspective of production safety? What measures has the MEM taken to promote their development, and how effective are they?

Huang Jinsheng:

Upgrading mines with smart technologies is a vital measure to better coordinate development and safety as it helps increase production safety and productivity in mines. It is also required for the safe and high-quality development of mines. The MEM and the National Mine Safety Administration attach great importance to the construction of smart mines and have taken the following measures: 

First, we have advanced the top-level design. We coordinated with other related departments to publish documents, including Guiding Opinions on Accelerating the Development of Smart Coal Mines, Guidelines for the Robotics Industry for the 14th Five-Year Plan Period (2021-2025), the Guide to Construction of Intelligent Coal Mines and the Notice on Developing the First Batch of Demonstrative Smart Coal Mines.  

Second, we have been improving the standards system. The key research and development catalog of coal mine robots has been published to promote 38 kinds of coal mine robots in five categories. The specification for smart mine data fusion and sharing has been compiled to regulate data collection, transmission, fusion and sharing for smart mine construction. Adhering to a demand-led approach and prioritizing what is urgently needed, we guided related parties to formulate three national standards, 25 industrial standards, and 70 association standards.

Third, more support has been provided through policies and funds. The MEM worked with the Ministry of Finance to include the promotion and application of smart mining equipment and robots within the scope of funding for safe mining production. We coordinated with the Ministry of Science and Technology to support approving the mining robot project within the national key research and development schemes. We joined the Ministry of Industry and Information Technology to designate the mining robot as part of the "Robot+" application initiative.  

Fourth, we are leveraging the demonstrative role of specific initiatives. The MEM supported the construction of a batch of demonstration mines by levels and categories. We also published the first batch of 20 application scenarios for mine robots in areas such as smart tunneling and inspection.

Thanks to the collective efforts of all parties, over 1,300 coalfaces nationwide have adopted smart excavation technologies. Additionally, 694 coal mines contain coalfaces incorporating smart technologies, boosting annual production capacity by 2.1 billion tons. Total investment in smart development is approximately 200 billion yuan, with more than 100 billion yuan already invested. On-site, we have deployed 31 types of mining robots, amounting to 1,000 sets. About 300 self-driving vehicles in open mines have been tested in over 30 open mines. Moreover, 228 non-coal mines have adopted smart technologies across areas including crushing, transportation, water supply and drainage, online monitoring and assessment. The death rate per million tons in smart coal mines stands at 0.024, which is less than 50% of the average level.

In the next step, in accordance with the arrangements of the CPC Central Committee and the State Council, we will work to reduce manpower and aim for unmanned operations, with a primary focus on integrating digital technologies into coal mining. By advancing smart development, we aspire to transform coal mining to be carried out on the surface, indoors, and flatlands, and with fewer personnel. This approach will accelerate the adoption of smart development in coal mines prone to severe disasters across different regions and further improve the inherent safety of coal mines.

Phoenix Satellite Television:

We have learned that the MEM recently sent joint law enforcement teams to some regions. Can you describe the characteristics of this kind of law enforcement? Thank you.

Song Yuanming:

Thanks to this reporter for your question. Around the May Day Holiday this year, the Party Committee of the MEM, drawing lessons from major and serious accidents that occurred recently, made the decision to send joint law enforcement teams to some regions to carry out coordinated law enforcement. We dispatched six teams in two batches to make unannounced visits and investigations to 96 enterprises and units across 28 districts in six provinces. A group of major risks and problems were identified and transferred immediately to local regulatory authorities to be placed on file for investigation and prosecution. Local governments have also been urged to learn from their experience. All these have formed a powerful deterrent and accelerated the launch of the special national campaign to identify and address major accident hazards.

This campaign focuses primarily on the following features:

First, joint law enforcement has been carried out. The MEM and the National Fire and Rescue Administration have collaborated to form joint law enforcement teams. They have selected key personnel at the community level who are skilled in both workplace safety and firefighting law enforcement. The teams visit enterprises and utilize both the Law on Workplace Safety and the Fire Protection Law as tools for law enforcement. They also encourage local governments to enforce punishments in accordance with articles of the law, enhancing the deterrent effect of law enforcement.

Second, local authorities have followed the lead of the MEM. When building joint law enforcement teams, the MEM has required all provinces to take coordinated steps simultaneously. According to statistics, departments of emergency management and fire and rescue institutions at all levels have also followed the lead of the MEM and built 13,000 teams to carry out joint law enforcement in different regions.

Third, significant attention has been paid to major risks and individuals. A primary focus has been given to the major safety hazards of enterprises and on the individuals who are chiefly responsible for the oversight of these enterprises. These major safety hazards include violations of regulations in electro-gas and electric welding, and operations without proper licensing, disorganized safety management of outsourcing and rental services, as well as congestion and obstruction of emergency exits and evacuation passages. After detecting these problems, investigations have been initiated to trace back to the individuals who hold principal responsibilities within these enterprises, aiming to understand why they failed to perform their legal obligations concerning workplace safety. After the unannounced visits, local governments punished both 52 enterprises and the individuals in charge, who are primarily accountable for their enterprises. Additionally, eight individuals with direct liability have been transfered to public security organs and in administrative detention..

Fourth, warnings have been amplified by publicly exposing cases. The process of unannounced investigations and visits has been documented through video recordings. Six feature-length movies have been released on the official website and social media platforms of the MEM. This has attracted wide attention and media attention, serving as a strong signal to society that workplace safety law enforcement is underway.

The MEM will continue to dispatch joint law enforcement teams to various regions for overt and covert inspections. The special national campaign has now entered a stage where enterprises conduct self-examination and rectify their own problems. The unannounced visits will examine whether enterprises know about the five key tasks, whether their major executives have studied the criteria for major accident hazard identification, and whether these hazards have been identified and addressed in accordance with these criteria. Enterprises that fail in the above inspections will be listed as key subjects of strict law enforcement. Meanwhile, for governments of the regions where enterprises are identified with problems, we will send warnings or letters to urge rectifications in the name of the Office of the Work Safety Committee of the State Council. By adopting a multifaceted approach, including more unannounced visits and sending warnings and letters urging rectification, we will address difficult problems in workplace safety where local governments and enterprises fail to fulfill their safety obligations. The ultimate goal is to enhance the efficiency of identifying and addressing potential safety hazards.

Thank you.

Chen Wenjun:

The last question, please.

China News Service:

According to the report to the 20th CPC National Congress, China has entered a period of development in which strategic opportunities, risks, and challenges are concurrent, and uncertainties and unforeseen factors are rising. How do you view the situation and challenges facing China's emergency management? Thank you.

Wang Xiangxi:

Thanks to the reporter. I will take this question. Although generally stable, the situation is still grave and complex concerning workplace safety and disaster prevention and relief. Various “black swan” and “gray rhino” events may occur at any time. Emergency management faces severe challenges.

From a work safety perspective, the main challenges stem from the entanglement and overlap of existing and emerging risks. China's economy has achieved the miracle of sustained and stable growth after decades of rapid industrialization and urbanization. However, many industries have also accumulated a significant number of risks. For example, our energy structure relies heavily on coal, with over 4,400 coal mines, of which more than one-third are prone to gas outbursts or have high gas levels, totaling over 1,500 mines. There are over 30,000 non-coal mines, with over 80% being small mines with poor safety capabilities. Our chemical industry, which accounts for 40% of global output, comprises over 11,000 production enterprises, nearly 7,000 of which have major hazardous sources. Additionally, we have over 900,000 residential high-rise buildings, ranking first globally. The gas pipeline network has over 70,000 kilometers of pipes that have been in service for over 20 years. There are 22,000 municipal bridges that have exceeded 30 years of service, with many aging bridges requiring repairs and renovations. As time passes, many risk hazards have entered a period of concentrated exposure. Furthermore, new risks are also increasing significantly with the emergence of new energy forms such as energy storage power stations, offshore wind power, hydrogen energy, and glass walkways. For instance, there are nearly 500 chemical energy storage power stations in China, many of which are located in urban areas, which puts considerable pressure on safety supervision.

From the perspective of disaster prevention, mitigation, and relief, the challenges mainly arise from the high frequency and prevalence of natural disasters, a fundamental characteristic of China. China is among the countries most severely affected by natural disasters, characterized by a wide range of disaster types, extensive geographical distribution, high frequency of occurrence, and substantial losses. In 2022 China witnessed a historical low in the losses caused by natural disasters. Even so, the number of affected population exceeded 110 million, with direct losses of nearly 240 billion yuan. China is located between the circum-Pacific seismic belt and the Eurasian seismic belt, resulting in frequent seismic activities. As urbanization accelerates, the potential for unimaginable consequences increases in the event of a major earthquake, given the number of high-rise buildings, elevated bridges, urban subways, underground pipe networks, and hazardous chemical production enterprises. Therefore, the pressure to prevent major earthquakes is constantly increasing. With global climate warming, there has been a noticeable increase in extreme weather events, with heavy rainfall leading to floods, urban waterlogging, and especially mountain torrents, landslides, and mudslides, which can threaten people's lives and property at any time. Due to strengthened ecological civilization construction, the forest coverage rate has been continuously improving, but the pressure to prevent and control forest and grassland fires has also been increasing.

In the face of these risks and challenges, we will thoroughly implement the important instructions of General Secretary Xi Jinping, unwaveringly adhere to the concept of overall national security, and fulfill our responsibilities with a strong sense of duty. We must proactively identify and respond to changes, address weaknesses, plug loopholes, and eliminate hidden dangers. We will implement and refine various preventive and responsive measures to continuously improve public safety management. Thank you.

Chen Wenjun: 

Thank you, Mr. Wang. Thanks to all the speakers and journalists for your participation. Today's press conference concludes here. Goodbye!

Translated and edited by Wang Yiming, Zhu Bochen, Wang Qian, Guo Yiming, Yang Xi, Cui Can, Liu Sitong, Gong Yingchun, Yuan Fang, Liu Caiyi, Zhou Jing, Yan Bin, Wang Wei, Wang Yanfang, Zhang Junmian, Xu Kailin, Ma Yujia, Xiang Bin, Li Huiru, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Hu Jinglin, administrator of the National Healthcare Security Administration (NHSA)

Mr. Shi Zihai, vice administrator of the NHSA

Ms. Li Tao, vice administrator of the NHSA

Mr. Huang Huabo, vice administrator of the NHSA

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

May 18, 2023

Xing Huina:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 16th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Hu Jinglin, administrator of the National Healthcare Security Administration (NHSA), to brief you on implementing the major decisions of the 20th National Congress of the Communist Party of China (CPC) and promoting the high-quality development of healthcare security. He will also take your questions. Also joining us today are three vice administrators of the NHSA, Mr. Shi Zihai, Ms. Li Tao, and Mr. Huang Huabo.

Now, I'll give the floor to Mr. Hu Jinglin for a brief introduction.

Hu Jinglin:

Ladies and gentlemen, friends from the media, good morning. It is my pleasure to meet you here. To begin with, on behalf of the NHSA, I would like to express my heartfelt gratitude to our journalist friends for their long-term support for the healthcare sector's development as well as their work to communicate and explain related policies.

In 2018, the CPC Central Committee with Comrade Xi Jinping at its core strategically decided to establish the NHSA. Since the institute's establishment, China's healthcare security system has focused on the major political task put forward by General Secretary Xi Jinping of "relieving people of worries about diseases and healthcare services." It has remained committed to the people-centered approach, overcome difficulties to promote systemic and institutional reforms, and made historic breakthrough in the domestic healthcare security sector. It has also played a vital role in resolving the problem of difficult and expensive access to medical treatment. Moreover, it has supported the development of the healthcare sector, safeguarding social harmony and stability, and helping to achieve the goal of common prosperity.

Over the past five years, the NHSA has made stability our top priority and established the world's largest basic healthcare security network. From 2018 to 2022, medical insurance coverage was maintained at around 95%. Meanwhile, the reimbursement rate for hospitalization expenses covered by related policies for urban workers reached 80% and around 70% for rural and non-working urban residents. The level of basic medical insurance coverage for low-income rural residents and people no longer in poverty has been maintained at over 99%, and medical insurance has successfully helped nearly 10 million poor households shake off poverty. The annual revenue of basic medical insurance funds, including maternity insurance, increased from 2.14 trillion ($302.56 billion) to 3.09 trillion yuan, and annual expenses rose from 1.78 trillion to 2.46 trillion yuan. The fund operates in a stable manner with a surplus. The annual per capita government subsidy for insured residents rose from 490 yuan to 610 yuan. In 2022 alone, government subsidies in this regard reached 600 billion yuan.

Over the past five years, the NHSA has been committed to bringing benefits to the public and strived to reduce people's burden on seeking medical treatment. The NHSA has expedited negotiations on insured medicines. Many exclusive varieties of anti-cancer and rare disease drugs, such as carrelizumab and nusinersen, have been included in the national medical insurance system at reasonable prices. This has reduced patients' medical expenses by more than 500 billion yuan after reimbursement and helped tens of millions of people suffering from serious illness and their families regain hope for life. The NHSA has worked to make bulk government purchases of medicines and medical consumables. Under the bulk government purchase scheme, the price of 333 medicines has declined by 50% on average. In addition, eight high-value medical consumables, such as heart stents and artificial joints, dropped by over 80% on average. Meanwhile, the NHSA has collaborated with local regions on drug-procurement programs, which has reduced related expenses by nearly 500 billion yuan. The NHSA has reformed insurance measures for people suffering from chronic diseases by including outpatient medicine expenses for hypertension and diabetes in national medical insurance, which has benefitted 140 million people with chronic diseases. The NHSA has continued to streamline procedures for settling healthcare costs directly where incurred. The scale of interprovincial on-the-spot settlement of medical bills has surged from 1.32 million applications in 2018 to 38.12 million in 2022, a 28-fold increase. In the face of the COVID-19 pandemic, the NHSA decisively implemented the policy of ensuring that patients will not be denied timely treatment due to medical costs and that the medical treatment at designated medical institutions is not affected due to healthcare insurance budget concerns. The NHSA also guaranteed the affordability of COVID-19 vaccines and vaccination services, contributing to the decisive victory of pandemic prevention and control. Additionally, the NHSA has kept extending pilot long-term care insurance schemes. Today, the schemes have covered 169 million people in 49 cities and benefitted 1.95 million people with disabilities, bringing quality and dignity to their lives.

Over the past five years, the NHSA has adhered to an innovation-driven approach and promoted the high-quality development of the pharmaceutical industry. The NHSA has encouraged research and development (R&D) and innovation in the sector and established a medical insurance access and negotiation renewal mechanism focusing on new drugs. Nowadays, it only takes two years on average for new drugs to be included in the medical insurance catalog, which is much shorter than the five-year time on average in the past. Some new drugs were included in the catalog after only six months on the market. Medical insurance expenditure on new drugs has increased from 5.95 billion yuan in 2019 to 48.19 billion yuan in 2022, a 7.1-fold increase. The NHSA has expanded the sales channels of insured drugs after medical insurance negotiations. Through a dual-channel management mechanism, some of these drugs that were mainly available in large hospitals are now also available in 155,000 designated medical insurance pharmacies and reimbursed by the health insurance fund. The NHSA has worked to ensure a clean environment for the pharmaceutical industry. By launching bulk government purchases institutionally and regularly, the NHSA has worked continuously to address the inflated price of medicines and medical consumables and avoid sales activities that take kickbacks from pharmaceutical companies. The innovation momentum of pharmaceutical companies keeps growing. The total R&D investment of the top 10 pharmaceutical companies in the A-share market by market value is 2.48 times that of 2018.

Over the past five years, the NHSA has followed a systemic and integrated philosophy and worked for the coordinated development and management of healthcare services, medical insurance, and medicine. The NHSA has supported the work to improve the wage compensation mechanism for medical workers and to clarify the fund surplus of public medical institutions due to bulk government purchases and medical insurance payment reforms, which can be used for staff salary expenses. The NHSA has worked to reform the mechanism of medical insurance fund allocation. Most regions under unified management have established a medical insurance fund flow system. Under the system, medical insurance funds are prepaid to medical institutions at the beginning of each year, which has reduced the pressure on hospitals to make advance payments. The NHSA has comprehensively established a dynamic adjustment mechanism for medical service prices. In addition to significantly reducing the price of medicines and medical consumables, the NHSA has also adjusted the prices of hospital service items, such as surgeries and traditional Chinese treatments, which reflect the value and capability of technical labor. The NHSA has supported the high-quality development of public hospitals. The NHSA has also supported the development of primary-level medical institutions. By increasing the medical insurance reimbursement rate and lowering the deductible line of medical treatment expenses at primary-level hospitals, the NHSA has worked to guide patients to purchase medicines and take healthcare services in these hospitals. The NHSA has established a medical insurance fund supervision system with proactive measures and a human touch. The NHSA has dealt with 1.54 million illegal medical insurance-related cases, and institutions recovered 77.13 billion yuan of medical insurance funds and exposed 245,000 typical cases. For medical institutions that take the initiative to conduct self-examination and self-correction, the NHSA has offered them leniency in accordance with the law. The NHSA has also made every effort to promote the standardization of diagnosis and treatment behaviors.

In summary, over the past five years, significant progress has been made in the coordinated development and governance of medical insurance, medical services, and pharmaceuticals. This has led to a win-win situation where the public benefits, the funds are more secure, hospitals are experiencing development, and enterprises are witnessing growth.

Ladies and gentlemen, friends from the media, these achievements are fundamentally attributed to the leadership of General Secretary Xi Jinping at the core of the Party and its Central Committee and the science-based guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. As we embark on the first year of fully implementing the guiding principles of the 20th CPC National Congress, the NHSA will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We will seize the themed education campaign as an opportunity to comprehend the tasks and requirements put forward during the 20th CPC National Congress on healthcare security and strive to create a new era in which healthcare security brings more benefits and convenience to the general public.

Next, my colleagues and I are ready to answer your questions. We look forward to exchanging ideas with you. Thank you.

Xing Huina:

Thank you, Mr. Hu, for your opening remarks. The floor is now open to questions. Please identify the media outlet you represent before raising your questions.

CCTV:

As we know, healthcare security plays a pivotal role in preventing individuals from descending into or reverting back to poverty due to illness. Could you elaborate on the specific measures you have taken to tackle these issues? What additional measures will you take to consolidate the progress made in poverty reduction and stimulate rural revitalization? Thank you.

Hu Jinglin:

Thank you. I'll take this question.

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has led the Chinese people in winning the battle against poverty, putting an end to the long-standing issue of absolute poverty that has plagued the Chinese nation for thousands of years. This remarkable achievement is nothing short of a miracle in human history. As General Secretary Xi Jinping pointed out, "Being lifted out of poverty is not an end in itself but the starting point of a new life and a new pursuit." Following the successful poverty alleviation campaign, the healthcare security departments have been resolutely implementing the decisions made by the CPC Central Committee and the State Council in synchronizing poverty alleviation with rural revitalization. We have continuously deepened the reform in the healthcare security system, steadfastly provided basic healthcare security to low-income rural residents, and ensured that individuals do not fall back into poverty on a large scale due to illness.

First, we have ensured key populations are provided with comprehensive healthcare. The central government has consistently increased subsidies for residents' medical insurance. It also offers targeted financial assistance to individuals facing extreme difficulty, recipients of subsistence allowances, and those who have fallen back into poverty or are at risk of falling back into poverty. It also ensures that rural low-income individuals can access institutional safeguards for medical treatment. In 2022, 97.66 million people in need received subsidies, and the insurance participation rate among rural low-income individuals remained stable at over 99%.

Second, we have strengthened the effectiveness of the three-tier relief system. This system encompasses basic medical insurance, serious illness insurance, and medical assistance. First, we strive to maintain a stable level of inpatient benefits for basic medical insurance and improve the mechanism for outpatient mutual aid. Second, we enhance the reimbursement levels for residents facing major illnesses while implementing targeted and preferential payment measures for special vulnerable groups. Third, we reinforce the medical insurance and assistance system for major and catastrophic diseases, ensuring comprehensive safeguarding measures are in place. According to monitoring data, in 2022, the three-tier relief system benefited rural low-income individuals with 145 million outpatient visits, alleviating their financial burdens by 148.7 billion yuan.

Third, we have improved our long-term mechanisms to prevent people from falling back into poverty because of illness. We are guiding regional departments in monitoring and issuing early warnings for patients burdened by high medical expenses. We promptly included eligible individuals under key monitoring into the scope of medical assistance and coordinated with relevant departments to provide comprehensive support. Since 2021, over 7.4 million warning messages have been sent nationwide. Additionally, we have adjusted the healthcare insurance catalog and implemented regular volume-based procurement of pharmaceuticals and medical supplies to reduce healthcare costs for low-income rural residents.

Moving forward, we will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council. Building on the achievements of "guaranteeing access to basic medical services," we will actively promote healthcare security to support the comprehensive revitalization of rural areas. Our key priorities include the following: First, we aim to establish a diversified medical assistance system, perfect a unified and standardized medical assistance system, and coordinate efforts to improve assistance for families grappling with major illnesses. Second, we will strengthen the comprehensive support mechanism for patients burdened with high medical expenses by engaging various social forces such as charitable organizations, commercial health insurance, and mutual medical aid to better harness collective support. Third, we will consolidate and expand the achievements in poverty alleviation through healthcare insurance by establishing liaison offices, learning from local best practices, and exploring targeted assistance initiatives to support key counties in the national rural revitalization campaign through healthcare security. Thank you!

Beijing Youth Daily:

We understand the safe and stable operation of medical insurance funds is directly linked to the vital interests of every insured individual. My question is, what measures have you taken, since 2018, to combat insurance fraud? What follow-up measures will be taken to protect the money that people rely on to pay their medical bills? Thank you. 

Hu Jinglin:

Thank you for raising this crucial question. Medical insurance funds are vital in providing financial support for healthcare expenses. The NHSA has been diligently implementing Comrade Xi's instructions and considers the supervision and protection of medical insurance funds our top priority. We have taken strong actions to combat any fraudulent or unlawful use of these funds, ensuring that they do not become a source of misuse or exploitation.

After five years of efforts, we have employed a comprehensive approach, combining multiple strategies, to establish a stringent oversight system for medical insurance funds.

First, we have carried out flight checks in a targeted manner to uncover illegal and non-compliant behaviors. We have adopted the mechanism of "no prior notification, top-down and cross-checking," which addressed the issue of ineffective oversight at the same level due to familiarity among parties. As a result, we have struck a heavy blow to unlawful and non-compliant behaviors, showcasing the role of flight checks as an effective tool. Additionally, we have encouraged designated medical institutions to learn from their mistakes and conduct self-examination to prevent similar illegal and non-compliant behaviors. Medical institutions that take the initiative to conduct self-examinations will be given leniency in terms of inspection frequency and punishment. This is in line with the law enforcement philosophy of balancing punishment and clemency. Since 2019, the NHSA has deployed 184 flight check teams, inspecting 384 designated medical institutions. The inspections have uncovered suspected illegal and non-compliant use of medical insurance funds totaling 4.35 billion yuan. 

Second, we have launched special campaigns to address malpractices in crucial areas. Medical insurance departments, in cooperation with health and public security authorities, have focused on key fields such as orthopedics, hemodialysis, and cardiology. They have also tackled significant issues like the use of essential drugs and medical supplies, fake medical record, and the resale of medicines covered by the national medical insurance system for profit. These targeted oversight and inspection efforts have eliminated the root causes that threaten people's "life-saving money." In 2022 alone, officials cracked 2,682 cases and arrested 7,261 suspects. A total of 1.07 billion yuan of improperly used medical funds have been retrieved.

Third, we have conducted daily oversight with the help of data-based technologies. By fully utilizing modern information technologies such as intelligent monitoring and big data, we have accelerated our efforts to establish a comprehensive, tiered, and multifaceted regulatory system. In 2022, we denied payment of and recovered 3.85 billion yuan through intelligent monitoring, accounting for about 26% of the total amount recovered. With the help of a big data model for false hospitalization, we have been able to identify crime clues precisely. As a result, nearly 500 people were arrested and 100 million yuan was investigated. 

Next, we will continue to strengthen flight checks and carry out special campaigns to crack down on medical insurance fraud. Efforts will be made to investigate a number of significant cases, knock out a number of major gangs, and publicly expose a number of typical cases. These will help to maintain a tough stance against medical insurance fraud, ensuring that no one dares to cheat. We will strengthen big data regulations and build a network for public supervision, leaving no opportunities for anyone to cheat. We will also improve policies such as global budget and allowing medical institutions to keep the surplus of allocated funds as encouragement for use of drugs centrally procured. Efforts will be made to guide designated medical institutions and designated retail pharmacies, as well as medical personnel, to regulate their behaviors, thus pushing for the establishment of a long-term mechanism that prevents the intention of committing fraud. Thank you!

Xinhua News Agency:

What's the current rate of participation in the basic medical insurance system in China? In addition, how will we achieve the two tasks outlined in the report to the 20th CPC National Congress, namely making sure the system covers the entire population and expanding the coverage of social insurance programs? Thank you.

Shi Zihai:

Thank you very much for your questions. I will answer them. Expanding medical insurance to cover the entire population is a fundamental and comprehensive task in the development of medical insurance programs. Since the establishment of the NHSA, it has always prioritized the implementation of full coverage of medical insurance. The administration has worked tirelessly to expand the coverage of medical insurance and improve its quality by optimizing policies, upgrading services, removing impediments in the system, and pressing forward with responsibilities. In recent years, the coverage of medical insurance has stabilized at above 95%. By the end of last year, the total number of people covered by the country's basic medical insurance reached 1.34592 billion, including 362.43 million people covered by the basic medical insurance system for working urban residents and 983.49 million covered by basic medical insurance system for non-working urban residents. As you mentioned, the 20th National Congress of the CPC clearly outlined the requirements of making sure the system covers the entire population and expanding the coverage of social insurance programs. To implement the tasks, we will focus on the following aspects:

First, we will enhance the precision of expanding medical insurance coverage through data comparison. We will establish and refine the data sharing mechanism in collaboration with relevant departments. Efforts will be made to strengthen data comparison and improve the medical insurance database that covers the entire population, enabling real-time and dynamic data tracking. Additionally, by leveraging the unified national medical insurance information platform built last year, we will expand data comparison efforts from a provincial level to a national scope. This will allow us to identify individuals with discontinued social security contribution or not even covered by the system. By eliminating instances of duplicate insurance, we will effectively promote the accuracy of expanded medical insurance coverage across various provinces.

Second, we will focus on expanding medical insurance coverage in a more targeted manner through inter-departmental coordination. We will establish communication and collaboration mechanisms with education departments to ensure that more college students are covered by medical insurance. Additionally, we will strengthen cooperation with health departments and utilize the mechanism of a "one-stop service for birth-related matters" to ensure that newborns are covered by medical insurance promptly. Furthermore, we will enhance our medical insurance services for the migrant population and rural migrant workers.

Third, we will grant easier access to medical insurance by upgrading services. We will strengthen cooperation with tax authorities to facilitate the public to enroll in medical insurance and pay contributions through a unified online platform or at one single office that offers integrated services. By offering a "one-stop" service, we will make it easier for people to access medical insurance services.

Fourth, we will ensure the long-term effectiveness of our efforts of expanding coverage by improving policies. We will refine the individual payment mechanism for medical insurance and encourage more working people to participate in insurance in the places where they receive medical treatment or their permanent residence. These efforts will support the orderly movement of people across provinces and cities and promote the high-quality implementation of full coverage of medical insurance. Thank you!

CNR:

The report to the 20th CPC National Congress proposed improving the population development strategy, establishing a policy system to boost birth rates, and bringing down the costs of pregnancy and childbirth, child-rearing, and schooling. What measures have we carried out in terms of reducing pregnancy and childbirth costs? What are the considerations for the next step? Thank you. 

Li Tao:

Thank you for your questions. Population development is of great importance to the Chinese nation. The report of the 20th CPC National Congress made clear requirements to optimize the population development strategy, establish a policy system to boost birth rates and bring down the costs of pregnancy and childbirth, child-rearing, and schooling. The NHSA has resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council and carried out works on improving maternity insurance and basic medical insurance. The administration has also actively conducted studies and refined supporting policies such as maternity insurance.

First, we have continued to leverage the protective function of maternity insurance. Maternity insurance covers employers and their employees, pays maternity medical expenses and provides maternity allowances. In 2022, 240 million people across the country were covered by maternity insurance, and the expenditure was 89.1 billion yuan. As a form of social insurance, maternity insurance provides mutual assistance by distributing maternity-related expenses of a single employer among all employers, thus balancing the labor costs of employers and alleviating the concerns of employers in hiring female workers. This is of great significance in eliminating gender discrimination in employment.

Second, we have strived to ensure three-child maternity insurance benefits for female employees. All localities have been guided to fully implement maternity insurance benefits for insured female employees having three children, guaranteeing the benefits to which they are entitled. All localities have been required to include the eligible maternity medical expenses and allowances of insured female employees into the maternity insurance benefits in a prompt manner and ensure full payment. At the same time, we have done a good job in providing maternity medical benefits for both urban and rural residents, implementing the policy of immediately enrolling newborns in medical insurance, and ensuring the convergence of benefits and timely settlement. All the 31 provincial-level regions and the Xinjiang Production and Construction Corps on the Chinese mainland have issued relevant documents, promulgated relevant policies, and optimized work processes, to ensure that female employees who are insured and have three children can enjoy corresponding treatment according to regulations. 

Third, we have taken multiple measures to improve and implement active childbearing support measures. In July 2022, the NHSA and 17 departments jointly issued the Guiding Opinions on Further Improving and Implementing Active Childbearing Support Measures, which makes it clear that flexible employment personnel are included in maternity insurance coverage. They guided local governments to comprehensively consider the affordability of the insurance fund, relevant technical norms, and other factors to gradually include the expenses incurred by using technological means to ease labor pains and assist reproduction under the coverage of the insurance according to procedures.

In the next step, we will continue to guide local governments to do a good job with maternity and basic medical insurance. We will consolidate and expand maternity insurance coverage and do more to ensure maternity medical benefits. At the same time, we will strengthen interdepartmental coordination and promote the dovetailing of maternity insurance policies and related economic and social policies to jointly promote the population's long-term balanced development. Thank you.

ThePaper.cn:

In recent years, commercial medical insurance such as Huiminbao that links up with basic medical insurance has appeared in many places, further reducing the burden of medical treatment for the people. It has received widespread attention from society. What considerations and measures are there for promoting commercial insurance development? Thank you.

Huang Huabo:

Thank you for your question. The report to the 20th CPC National Congress pointed out that China will promote the orderly linking up of medical insurance programs at different levels and vigorously develop commercial medical insurance. The Huiminbao program has been implemented in recent years in various localities. We believe that it can be used as a kind of inclusive commercial medical insurance. It is also a helpful exploration into improving the multi-level medical insurance system. On the basis of clarifying the liability boundary between basic and commercial medical insurance, the medical insurance department explored and adopted some measures to help the development of commercial medical insurance. It is specifically reflected in three aspects.

First, we have vigorously promoted information sharing. On the prerequisite of ensuring the security of medical insurance data, we have carried out pilot projects for authorized inquiry and use of personal medical insurance information in 12 cities across the country to tap into the full potential of medical insurance data and serve more local residents. In the pilot cities, insured persons can access personal medical insurance-related information through various online and offline channels. Upon receiving authorization from individuals, their relevant personal information is made accessible to commercial insurance companies. This streamlines the process of purchasing commercial insurance and filing claims. We are committed to providing the greatest convenience for people through information sharing. By doing so, we strive to improve the public's sense of fulfillment and satisfaction with commercial insurance products.

Second, we have vigorously supported service coordination. Convenient and quick claims settlement has always been an urgent need for insured people. We have encouraged commercial insurance companies to participate in critical illness insurance, long-term care insurance, and medical insurance fund supervision. Undertaking businesses relevant to basic medical insurance will not only help commercial insurance companies to further improve their services but also helps them optimize insurance service processes and unclog service channels. Some localities also support and guide commercial insurance companies to simplify the claims procedures to greatly increase the attractiveness of commercial insurance products. For example, Zhejiang province and some other places have implemented one-stop insurance settlement of Huiminbao insurance programs, basic medical insurance, critical illness insurance, and medical assistance, among others. This system has effectively solved or alleviated the problems relating to advance payments, errands, and long processing times, which have received the most complaints. 

Third, we are diligently working to improve the effectiveness of the fund. We have deepened the reform of bulk government purchases and medical insurance payments while continually conducting national drug catalog access negotiations. We continue to strengthen fund supervision and crack down on insurance fraud. These measures not only alleviate the burden of medical treatment for insured patients but also, to a certain extent, alleviate the bottleneck problems of commercial insurance companies. These include difficulties with hospital supervision, weak bargaining power, and high risk- control costs. These efforts have fostered a good medical service environment for commercial medical insurance companies to reasonably control fees and reduce operating pressure.

Next, we will work with relevant departments to actively explore the proper and effective methods for synergized development and mutual complementation of basic and commercial medical insurance to better meet the needs of the public's multi-level medical security. Thank you!

Cover News:

What measures has the NHSA taken in recent years to ensure that medical insurance system covers more lifesaving and emergency medicines that are newly developed and with good effect? What are the policy considerations and arrangements for the next step? Thank you.

Li Tao:

Thank you for your questions. The management of the national medical insurance drug catalog is of wide concern to society. Since its establishment, the NHSA has maintained its role of ensuring the basic needs, continuously optimized the catalog, and significantly improved drug security for the masses. It is mainly reflected in the following aspects:

First, the catalog is updated annually, ensuring new drugs benefit patients more quickly. Over 80% of new medicines are covered by medical insurance system within two years of launch. For example, among the 108 new medicines added through negotiations and bids in the 2022 catalog, 105 were new medicines launched within five years, and a significant portion of these drugs were approved and included in the catalog within the same year.

Second, the number of medicines in the catalog has significantly increased, and the scope of insurance is constantly expanding. Over the last five years, 618 medicines have been added to the catalog, covering clinical treatment fields such as COVID-19 infection, tumors, cardiovascular and cerebrovascular diseases, rare diseases, and pediatrics. A large number of drugs based on new therapeutic mechanisms and new targeted drugs have been included in the catalog. Among the top 20 categories in terms of medical institution expenses, there are now very few auxiliary drugs with uncertain efficacy and potential for abuse, as they have been replaced by therapeutic drugs for major diseases and chronic conditions. The current version of the national medical insurance drug catalog has a total of 2,967 types covering all fields of clinical treatment. The clinical medication needs of insured patients are now better addressed.

Third, great emphasis has been placed on the implementation and provision of drugs in the catalog, leading to a significant improvement in drug accessibility. We have collaborated with the National Health Commission to introduce a series of policies, including the "dual channel" (designated medical institutions and retail drug stores) for accessing medicines included in the catalog through negotiations, to support the implementation of the catalog. By the end of December 2022, 209,000 designated hospitals and pharmacies nationwide were equipped with the negotiated drugs included in the catalog.

Fourth, the national innovation-driven development strategy has been implemented, and medical technology innovation has been supported. Over the past five years, out of the 70 newly developed drugs under major programs that engaged in negotiations, 66 were successful, achieving a success rate of 94%. This has enabled the swift clinical application of these innovative drugs. Enterprises' initial investments in research and development have been duly rewarded, fostering a significant boost in innovation enthusiasm.

The adjustments made to the national medical insurance drug catalog in the past five years have greatly benefitted insured individuals. Patients now have access to innovative drugs that offer superior therapeutic effects at more affordable prices. This positive trend reinforces a robust trajectory of research and development for our country's medical sector. Moving forward, we are committed to continuing our efforts to optimize and refine the management of the medical insurance drug catalog. This will include adding more qualified medications to the catalog and further meeting the medication needs of insured residents. Thank you!

MASTV:

As the frequency of population mobility increases, people's demand for seeking medical service in different places is also increasing. What is the progress of directly settling medical expenses incurred outside a patient's home province? What other measures will be introduced to boost convenience for people in the next step? Thank you.

Hu Jinglin:

Thank you. I'll answer your questions.

The direct settlement of medical expenses incurred outside of a patient's home province is directly related to people's access to medical treatment. Since the establishment of the NHSA, we have acted in accordance with the policy decisions and plans of the CPC Central Committee and the State Council, focusing on the inconvenience of reimbursing medical expenses incurred outside the home province. We have vigorously promoted the direct settlement of such expenses. Progress has been made in the following four areas:

First, it is more convenient for people to settle inpatient expenses incurred outside their home province. At present, there are 68,800 designated medical institutions within an inter-provincial network of hospitalization expenses, an eight-fold increase over 2017. The rate of directly settling inpatient expenses incurred outside of the home province has increased from less than 5% in 2017 to about 65% in 2022, benefiting a total of 20.3876 million people.

Second, a breakthrough has been made in the direct settlement of general outpatient services across provinces. At least one designated medical institution in each county can directly reimburse outpatient expenses for cross-provincial medical treatment. There is a network of 382,100 designated medical institutions for general outpatient services settlement across provinces, benefiting a total of 69.5991 million people.

Third, progress has been made in directly settling treatment costs related to outpatient chronic and specific critical diseases across provinces. At least one designated medical institution in each area of overall planning will be able to directly reimburse the expenses of five types of outpatient chronic and specific critical diseases, namely hypertension, diabetes, outpatient radiotherapy for malignant tumors, dialysis for uremia, and anti-rejection treatment after organ transplantation. There are 24,600 designated medical institutions nationwide within inter-provincial networks for outpatient chronic and specific critical diseases settlement, benefiting 730,200 people.

Fourth, the cross-provincial registration for medical services has been continuously optimized. In recent years, we continue to expand the scope of people who can access the cross-provincial registration system and reduce the documents required for filing procedures. At the same time, relying on the national unified online filing systems such as the app of the National Medical Insurance Service platform and the WeChat official account of the NHSA, we have realized online and mobile filing for medical treatment in different places. The Beijing-Tianjin-Hebei region has also implemented the policy of "regarding drug purchasing and medical treatment as the filing" within the region. There is no need to go through the filing procedures, and patients will be able to directly use the settlement service for medical treatment in the region.

In the next step, we will further implement the cross-provincial settlement for medical treatment. First, we will increase publicity of the policy. In June, we will conduct a one-month nationwide intensive promotion for the policies of cross-provincial medical treatment so as to inform more insured people to acknowledge the methods of filing for medical treatment in other places. Second, we will continue to expand the coverage. We will promote more medical institutions to be designated for the cross-provincial settlement of medical bills so that insured people are able to access the convenient direct settlement services for medical expenses incurred outside of their home provinces. Third, we will continue to optimize the filing process and encourage more regions to conduct self-filing for cross-provincial medical services, continue to increase the proportion of direct settlement and make it easier for people seeking medical treatment in other places. Thanks!

Red Star News:

According to the report to the 20th CPC National Congress, it calls for promoting coordinated development and regulation of medical insurance, medical services, and pharmaceuticals. What work has been done in this regard? And what work should be considered in the next step? Thank you. 

Li Tao:

Thank you for your questions. Since the establishment of the NHSA, it has attached great importance to the fundamental role of medical insurance in the coordinated medical service, medical insurance, and pharmaceutical reforms. It has also promoted positive interaction and coordinated reforms between the medical security system and medical service system, as well as the drug supply system.

First, we focus on reducing the burden of seeking medical treatment for the general public. By improving the medical security system with basic medical insurance as the main body, medical assistance as the support, and with the joint development of other tools, such as supplementary medical insurance, commercial health insurance, and charitable donations, the proportion of health care expenses borne by individuals has constantly reduced.

Second, we have promoted the high-quality development of medical institutions. We have improved payment methods and incentive and constraint mechanisms for medical insurance and comprehensively promoted the diversified, compound medical insurance payment model based on disease-related payment. In 2022, 206 cities in China adopted the new payment model, which charge hospitalization fees based on DRG and DIP classification. We have guided medical institutions to change their development models, taking actions to control costs, and regulating medical behavior. 

Third, we have supported and encouraged pharmaceutical technological innovation. Through measures such as bulk government purchases, and making timely adjustments to the catalogue of medicines covered by medical insurance, we have supported the rapid entry of innovative drugs and medical devices into clinical use, and promoted the high-quality development of the pharmaceutical industry.

In the next step, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, we will continue to further promote the coordinated development and regulation of medical insurance, medical services, and pharmaceuticals.

First, we will promote both a well-functioning government and an efficient market. We will make bulk government purchase a regular and institutionalized practice, upgrade the functions of the pharmaceutical procurement platform, improve the pricing mechanism for pharmaceutical services, and deepen the supply-side reform of pharmaceutical services.

Second, we will promote better coordinated reforms of medical insurance and public hospitals. We will deepen reform of public hospitals to see that they truly serve the public interest, coordinately advance the expansion and balanced regional distribution of quality medical resources. We will also support the modes of graded diagnosis and treatment, and the healthy development of community-level healthcare institutions.

Third, we will promote medical insurance reform and pharmaceutical innovation to reinforce each other. We will make timely adjustments to the catalogue of medicines covered by medical insurance so as to ensure the new drugs and technologies be able to benefit people in a timely manner and jointly promote the high-quality development of the pharmaceutical industry. Thanks.

Xing Huina:

Due to time constraints, there will be two final questions.

Yicai:

What are the impacts of centralized procurement of medicines and high-value medical consumables on patients, hospitals, and the pharmaceutical industry? And what specific tasks will be accomplished to implement the achievements of the reform and expand the scope of the reform? Thank you.

Shi Zihai:

Thank you for your questions. For a long time, the prices of pharmaceutical drugs and high-value medical consumables in China have been inflated; especially for certain "imported old drugs," even though their patent periods have expired, they are still sold at relatively high prices in China. And the high-value medical consumables are priced at an even much higher level above the international standards. To address this situation, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, the NHSA has worked with relevant departments to actively promote centralized procurement of medicines and high-value medical consumables, reduce the prices of selected products by reducing the production and marketing costs for selected enterprises.

Over the past five years of reform, the effectiveness of centralized procurement has been demonstrated. First, the burden of pharmaceutical expenses for the general public has significantly reduced. Through centralized procurement, we started to reverse the trend of continuous rise in drug prices in China. According to relevant calculations, compared with 2018, the medicine purchase price index decreased by 19% in 2022. Many people may remember the movie "Dying to Survive," released a few years ago. In the movie, there was a medicine called imatinib, which is used in the treatment of leukemia. The original drug was priced at over 10,000 yuan per box. When the first batch of centralized procurement was launched, we included this drug in the procurement scope. With centralized procurement, the price of generic drugs winning the bid was reduced to about 600 yuan per box. Although the original drug was not selected, its price was also affected by the centralized procurement, and it dropped from over 10,000 yuan per box to just over 7,000 yuan per box, which brought real benefits to leukemia patients. At the same time, the main consumables for cardiology and orthopedics, which people are strongly concerned about, have also been included in the centralized procurement; and the prices of the selected products have decreased significantly; as a result, there was a clear reduction in the burden on patients.

Second, medicine quality has been significantly improved. We paid great attention to the quality of selected products during centralized medicine procurement. By reducing medicine prices, the accessibility of high-quality drugs and consumables has been effectively improved. For example, the proportion of patients using high-quality medicine, such as original drugs and eligible copycat drugs that passed quality consistency evaluation increased from 50% to over 90% after the centralized medicine procurement was launched. The using ratio of chrome alloy stents which have better properties and perform better raised from 60% to more than 90%, after centralized medicine procurement, while stainless-steel stents which originally occupied a larger share of market and have average properties have been generally phased out.

Third, the pharmaceutical industry has become healthier and more sustainable. The centralized medicine procurement guided pharmaceutical enterprises changed their focus from channels and sales towards quality and price. Enterprises' internal driving force – pursuing development through quality improvement – has been strengthened constantly. Since 2018, thanks to centralized medicine procurement, the number of copycat drugs that passed quality and curative effect consistency evaluation rapidly increased to more than 3,000 from less than 200. High-quality drugs are gradually occupying the mainstream of clinical drugs.

Next, we will continuously expand the scale and improve the quality of centralized medicine procurement. Central and local governments will work together to advance progress. On a state level, we have already carried out the eighth round of centralized medicine procurement this year and will work on the fourth round of centralized medicine procurement for high-value medical consumables, mainly intraocular lens and orthopedic sports medicine consumables. A new round of centralized drug procurement will also be carried out. On local level, cross-provincial cooperative procurement will be carried out for those drugs not included in national-level centralized medicine procurement, such as chemical drugs, Chinese patent medicines, interferon, neurosurgical consumables, and in-vitro diagnostic reagents. We will also work with relevant departments to strengthen quality control and supply assurance for products of centralized medicine procurement and urge medical institutions to prioritize purchasing and using selected products so as to ensure the people truly enjoy the fruits of reform. Thank you.

Southern Metropolis Daily:

It has been three years since the pilot programs on long-term care insurance were expanded. What's your consideration in establishing the long-term care insurance system? How about those pilot programs? What's your priorities for the next step? Thank you.

Hu Jinglin:

Thanks for your questions, and I will answer them.

The long-term care insurance system is a major decision and deployment made by the CPC Central Committee and the State Council to actively cope with population aging, and also an important institutional arrangement to address weak links in the country's social insurance system. By the end of 2022, with 280 million people aged 60 and over who occupy 19.8% of the total population, China will soon enter a moderate aging society. With the acceleration of population aging and the increasing number of incapacitated elderly individuals, long-term care has gradually become a social focus. In order to properly take care of persons with disabilities, we have carried out a trial program on long-term care insurance in 15 cities nationwide since 2016 in accordance with the decisions and deployments of the CPC Central Committee and the State Council. Since its establishment in 2018, the NHSA has made continuous efforts on this issue. We conducted follow-up assessments on the trail program with relevant departments and increased the number of pilot cities to 49. Till the end of last year, insured people in long-term care reached 169 million, and 1.95 million of them have already enjoyed the benefits. The accumulated fund expenditure reached 62.4 billion yuan, or 14,000 yuan per person per year.

At present, the trial program is progressing smoothly and achieved its phased targets. First, it effectively reduced the economic burden of families with persons with disabilities. Second, it promoted the development of the service system. The number of service institutions in pilot areas reached 7,600, four times the original number. Third, it created a large number of jobs. The number of nursing staff increased from more than 30,000 to 330,000, which has multiplied many times.

The 20th CPC National Congress made a strategic deployment of long-term care insurance system, and clarified the direction of reform. The NHSA will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and strive to establish a long-term care insurance system with Chinese characteristics. Next, our work will focus on the following two aspects:

First, we will make continuous and solid efforts for the existing trial program. We will continue to study and improve the multi-party co-financing mechanism, guarantee mechanism for fair and appropriate treatment and other mechanisms formed in previous trail programs. Local governments will be guided to optimize and implement the criteria for assessing disability levels that were approved at the state level. We will also conduct pilot evaluation and targeted research on problems and weak links and then give solutions. Coordinated efforts with other departments will be made to forge policy synergy.

Second, we will work at top-level design for the long-term care insurance system. On the basis of summarizing and extracting the experience of the trial program, we will study and improve the overall goals and long-term plans for institutional development. A unified and systematic orientation, frame, policy, and standard will be set to regulate management and operation so as to form a long-term care insurance system with Chinese characteristics. Thank you.

Xing Huina:

Today's briefing is hereby concluded. Thanks to all the speakers and friends from the press. Goodbye, everyone.

Translated and edited by Zhu Bochen, Wang Qian, Guo Yiming, Zhou Jing, Cui Can, Liu Sitong, Yan Bin, Yuan Fang, Liu Caiyi, Liu Sitong, Yan Xiaoqing, Huang Shan, Lin Liyao, Wang Yanfang, Li Huiru, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Cong Liang, vice chairman of the National Development and Reform Commission (NDRC) and administrator of the National Food and Strategic Reserves Administration (NFSRA)

Mr. Lu Jingbo, vice administrator of the NFSRA

Mr. Huang Wei, vice administrator of the NFSRA

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

May 11, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 15th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Cong Liang, vice chairman of the National Development and Reform Commission (NDRC) and administrator of the National Food and Strategic Reserves Administration (NFSRA), to brief you about safeguarding food security and ensuring food supply for the Chinese people, and to take your questions. Also joining us today are vice administrators of the NFSRA, Mr. Lu Jingbo, and Mr. Huang Wei.

Now, I'll give the floor to Mr. Cong for a brief introduction.

Cong Liang:

Ladies and gentlemen, friends from the media, good morning! I'm delighted to meet you here. First and foremost, on behalf of the NFSRA, I would like to thank all our friends in the media for your continued interest, attention and support for our work in food and strategic reserves. Today, we will introduce our efforts in studying and implementing the guiding principles outlined in the 20th National Congress of the Communist Party of China (CPC), as well as our strategies for safeguarding food security and ensuring a steady food supply for the Chinese people.

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has made feeding over 1 billion people a top priority in governing the country. It has introduced a new concept, guaranteeing basic self-sufficiency in cereal grains and absolute grain security. A national food security strategy has been established that focuses on domestic production and ensures production capacity, moderate imports, and scientific and technological support. Relevant departments nationwide have been diligently implementing policies and measures geared towards agriculture and grain, thereby bolstering national food security. First, grain production has achieved stable development. China has consistently kept its farmland area above the red line of 1.8 billion mu (about 120 million hectares) and cultivated 1 billion mu (about 66.7 million hectares) of high-standard farmland. It has secured a bumper harvest for the 19th year in a row, and its grain output has remained above 1.3 trillion jin (650 million tons) for eight consecutive years. The country's staple food self-sufficiency rate is above 100%, and the cereal self-sufficiency rate stands above 95%. The country's per capita share of grain stands at about 480 kilograms, higher than the internationally recognized security line of 400 kilograms. Basic self-sufficiency in grain and absolute security in staple foods has been achieved. Second, the operation of the grain market has remained smooth. Despite global fluctuations in the grain market due to factors such as the pandemic, economic downturn, extreme weather, and geopolitical conflicts, China's grain prices have remained generally stable within a reasonable range. The grain market has not experienced shortages, ensuring sufficient supply to meet the people's consumption needs. This plays a crucial role in promoting sustained and healthy economic development, as well as maintaining social harmony and stability. Third, grain circulation has proven to be efficient and seamless. Efforts have been made to modernize grain storage and logistics. Our national standard grain warehouses now possess a storage capacity of nearly 700 million tons, with storage conditions that meet the world's advanced level. The grain logistics network has become more comprehensive. The grain reserve system has been further improved with sufficient and high-quality government grain reserves. This plays a vital role in meeting basic needs, stabilizing expectations, and ensuring safety. The emergency supply system is notably comprehensive, and fully equipped to respond to major natural disasters and public emergencies.

Food security is of paramount importance in China. The 20th CPC National Congress emphasized the need to better safeguard China's new development pattern with the new security framework. It laid out key plans for food security, including reinforcing the foundations for food security on all fronts, ensuring that both Party committees and governments assume responsibility for ensuring food security and that China's total area of farmland does not fall below the redline of 120 million hectares. It also focused on refining the mechanisms to safeguard the incomes of grain growers and compensating major grain-producing areas, and ensuring that China's food supply remains firmly in its own hands. The year 2023 is the first year to fully implement the guiding principles of the 20th CPC National Congress. We will coordinate development with security, fully and faithfully apply the new development philosophy, foster a new development pattern, and promote high-quality development. We will pursue a holistic approach to national security and implement the country's food security and rural revitalization strategies. We are committed to following the path of food security with Chinese characteristics and building a higher-level, higher-quality, more efficient, and sustainable national food security system to ensure food supply for the Chinese people. First, we will firmly shoulder the crucial task of ensuring food security. Collaborating with relevant departments, we will organize and implement assessments for cultivated land protection and the food security responsibility system. We will fully ensure that Party committees and the government assume responsibility for ensuring food security. Additionally, we will conduct thorough evaluations of central grain reserve management and the implementation of central grain policies. We will urge grain storage enterprises to fulfill their responsibilities diligently. Second, we will enhance our capacity to regulate grain purchase and storage effectively. This entails reinforcing coordinated guarantees throughout production, purchase, storage, processing and sales. We will adhere to and improve the minimum purchase price policy, actively promote market-oriented purchases, and ensure the grain that farmers grow is marketable. Moreover, we will enhance the grain reserve system by scientifically determining reserve scales and optimizing the structure. We will improve the grain monitoring and early warning system, strengthen precise regulation, and ensure the overall stability of the grain market. Third, we will continuously improve food security governance in accordance with the law. We will accelerate the advancement of food safety legislation, endeavoring for the prompt enactment of the Law on Ensuring Food Security and the Regulations on the Safety Management of Grain Reserves. We will optimize the institutional environment to foster governance based on the rule of law. We will conduct special rectification efforts to combat corruption in grain purchases and sales. We will also enhance supervision systems and mechanisms related to the procurement and sale of grain reserves. We will innovate and strengthen law enforcement and supervision, speeding up the construction and application of regulatory digitalization, and resolutely safeguarding and managing our grain reserves. Fourth, we will undertake initiatives for food conservation. We will implement the Food Conservation Action Plan, focusing on strengthening management and control across the entire chain to minimize losses and waste. We will organize themed activities such as World Food Day and National Food Safety Publicity Week. These efforts will guide the public in developing scientific and rational eating habits, fostering a new trend of cherishing food, reducing waste, and promoting healthy consumption.

Friends from the media, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, we possess the foundation, conditions, capabilities and confidence to ensure that China's food supply remains firmly in the hands of our 1.4 billion people. We will firmly grasp the food security initiative, providing a solid guarantee for the successful start of building a modern socialist China in all respects.

Now, my colleagues and I are ready to communicate further and share perspectives on the questions raised by our media friends.

Shou Xiaoli:

Thank you for the introduction, Mr. Cong Liang. Now we will proceed to the question and answer session. Before asking your question, please state the name of the news organization you represent. Please raise your hand to ask your question.

China Media Group:

General Secretary Xi Jinping has emphasized the critical importance of maintaining Chinese people's food security firmly within our own hands. So, how does our country's food security look like this year? In terms of comprehensively strengthening the foundation of food security and ensuring the supply of grains and essential agricultural products, what measures will the food and reserve departments take? Thank you.

Cong Liang:

I'm glad to answer your questions. General Secretary Xi Jinping, in his report to the 20th CPC National Congress, reviewed and summarized the work of the past five years and highlighted the significant changes of the new era over the past decade. He pointed out, China "ranks first in the world in terms of grain output, and it has ensured food and energy security for its more than 1.4 billion people." During his visit to the fifth session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC), where he met with members from the agricultural, social welfare, and social security sectors, he underscored: "Through strenuous efforts, China is now capable of feeding nearly one-fifth of the global population with 9% of the world's arable land and 6% of the freshwater resources. From the time when the country had an underfed population of 400 million, to today, when its 1.4 billion people are eating well with a great range of choices, we have effectively answered the question of 'who will feed China?'" This concise summary provides the most accurate assessment of China's food security situation since the 18th CPC National Congress. To provide further evidence, we can illustrate it through "three areas of greater strength."

First, we have enhanced our capacity to guarantee production. The development of functional grain production areas and protected areas for important agricultural products is progressing steadily. Currently, cultivated areas for grain production remain stable at around 1.75 billion mu (1.17 million square kilometers). Approximately 1 billion mu of high-standard farmland has been established, and there are continuous improvements in agricultural technology and mechanization. With the comprehensive implementation of the latest round of the action plan to increase grain production capacity by 100 billion jin (50 billion kilograms), the foundation of grain production will be further strengthened.

Second, our capacity to guarantee supply has increased. The scale, structure and distribution of government grain reserves have continued to be optimized, with the inventory of grain and oil reserves exceeding 15 days' worth in main urban areas of 36 large and medium-sized cities and areas more susceptible to market fluctuations. Inventories of various grain enterprises are at a relatively high level, with noticeable increases in the commodity stockpiles of some enterprises compared to previous years. Additionally, coupled with the grain stored by rural households, our overall social grain reserves have become more diverse, providing a stronger guarantee.

Third, we have a stronger capacity for regulation and emergency support. Various enterprises have an average annual grain procurement volume of around 800 billion jin, effectively safeguarding the interests of grain-producing farmers. Targeted and orderly policy-oriented grain releases have satisfactorily met the grain demand of enterprises. Gradually, well-established grain emergency response plans and operational mechanisms have been implemented across different regions. The number of grain emergency support centers and enterprises continues to grow.

Next, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we will focus on ensuring a stable supply of grain and important agricultural products, maintaining overall market stability, and prioritizing the following three aspects of our work. First, we will carefully organize grain procurement. We will provide guidance to localities and relevant enterprises to ensure market-oriented and policy-based procurement, see responsibilities are fulfilled by all the stakeholders, and ensure that there are personnel, funds, warehouses, and transportation for grain collection, ensuring that every grain is safely stored. Second, we will strengthen the regulation and adjustment of grain reserves. We will closely monitor important periods and key areas, strengthen the organization and distribution of grain sources, accurately grasp the timing, scale, and effectiveness of policy-based grain releases, and effectively meet the market's consumption demands. Third, we will improve and perfect the grain market's monitoring and early warning system. We will continuously enhance the foresight, timeliness, and targeted nature of monitoring and early warning, promptly identifying and addressing potential issues, emerging trends and latent problems. Thank you.

ThePaper.cn:

This year's "No. 1 central document" proposes to continue increasing the minimum purchase price of wheat and to reasonably set the minimum purchase price of rice. May I ask what considerations are behind this decision? Thank you.

Lu Jingbo:

This is a question of great concern to farmers nationwide. Allow me to provide a brief answer.

Over the years, the CPC Central Committee and the State Council have introduced a series of policies and measures to support grain production and safeguard the interests of grain farmers. The minimum purchase price policy is a significant institutional arrangement. Since 2004, the government has progressively implemented the minimum purchase price policy for rice and wheat in major production areas. This policy has effectively safeguarded and stimulated farmers' enthusiasm for grain production, promoting the stable development of grain production in China.

Since the 18th CPC National Congress, relevant government departments have actively promoted the reform of the grain procurement and storage system to adapt to changes in the market situation. They have adhered to and improved the policy of minimum purchase prices for wheat and rice. The overall approach is to uphold the principles of market-oriented reform while ensuring the protection of farmers' interests. This involves setting minimum purchase price levels reasonably and fully leveraging the decisive role of the market in allocating grain resources.

In recent years, various unpredictable and unforeseen factors have intertwined and accumulated on a global scale, leading to frequent and significant fluctuations in the international food market. To stabilize grain production and strengthen the foundation of food security, China's relevant departments have considered factors such as grain production costs, market supply and demand, domestic and international prices, and industry development. They have appropriately increased the minimum purchase prices for wheat and rice. Specifically, the minimum purchase price for wheat has risen for three consecutive years, and early indica rice has seen an increase for four consecutive years. Meanwhile, the minimum purchase price for mid-season and late-season indica rice previously increased for three consecutive years. This year, the minimum purchase price for wheat is set at 1.17 yuan per jin, and for early indica rice, it is 1.26 yuan per jin, both increasing by 0.02 yuan compared to the previous year. The minimum purchase prices for mid-season and late-season indica rice are 1.29 yuan per jin, and for japonica rice, it is 1.31 yuan per jin, remaining the same as in the previous year. These arrangements fully demonstrate the high importance attached by the CPC Central Committee and the State Council to ensuring grain production, which is conducive to safeguarding the interests of grain farmers, strengthening their confidence in grain production, and promoting stable production and supply of food, especially grain, as well as ensuring the stable operation of the market.

Going forward, we will conscientiously implement the policy of minimum purchase prices. We will promptly approve the initiation of government-backed purchases in eligible regions, strengthen supervision and guidance for relevant localities and enterprises, further leverage the stabilizing role of the policy, and resolutely ensure the bottom line that grain farmers don't have to worry about the sales. Thank you.

Thecover.cn:

In recent years, China's food emergency security system has been continuously improved and has played an important role in addressing various emergencies. May I ask how we can accelerate the construction of a national food emergency security system that matches our status as a major country? Thank you.

Cong Liang:

Thank you for your question. Food security under emergency conditions directly relates to people's lives and social stability. At present, China has basically established a comprehensive emergency food security system that covers storage, transportation, processing, distribution and supply, serving as an important support to ensure national food security.

By the end of 2022, there were a total of 6,584 emergency grain processing enterprises, 4,846 emergency storage and transportation enterprises, 3,542 emergency distribution centers, and 56,495 emergency supply outlets nationwide. Our emergency processing capacity can reach 1.64 million tons per day, which can meet the needs of the entire population for two days.

The COVID-19 pandemic posed a realistic test to food security, highlighting the importance of building emergency food security capabilities. Currently, there are still weak links in China's food emergency security system, manifested by incomplete contingency plans, the imbalanced distribution of emergency supplies, and insufficient utilization of resources from existing emergency food processors and suppliers. Going forward, in accordance with the deployments made at the 20th CPC National Congress, we will strive to build a well-resourced national food emergency security system with an optimized structure, wider coverage, more efficient management, and faster transportation capabilities. We will focus on three areas of work:

First, we will improve the food emergency response system. We will push for the revision of the National Food Emergency Plan and guide local governments to improve food emergency plans at the provincial, city and county levels. We will effectively manage and utilize the resources of food emergency response enterprises and fully mobilize their participation in emergency response and supply.

Second, we will address the shortcomings in our food emergency response capacity. We will adhere to the principle of "one county, one policy" to increase the number of food supply points, optimize their distribution, and achieve comprehensive coverage of supply points to address shortcomings of food emergency response capacity at the county level. We will adopt an innovative mindset and continuously enhance emergency food security capabilities in large and medium-sized cities. We will strengthen regional cooperation in food processing capacity, develop urban food supply contingency plans, and conduct emergency drills. We will focus on addressing the weaknesses in emergency food security in special areas and accelerate the construction of a diversified food reserve system to strengthen the material foundation for emergency response and supply.

Third, we will work hard to effectively implement key tasks. We will guide localities to scientifically develop food emergency security centers at the provincial, city and county levels and accelerate the establishment of regional food emergency security centers. We will intensify efforts to optimize and integrate national and local food emergency security resources, creating a synergy for emergency food support. Thank you.

Hong Kong Bauhinia Magazine:

To ensure national food security, we need to make simultaneous efforts to increase production and reduce losses. What outcomes have been achieved in grain conservation in every aspect and process of grain circulation? What measures will be taken in the next step to achieve tangible advancements in grain conservation? Thank you.

Huang Wei:

Thank you for your questions. You just mentioned in your question that, to ensure national food security, we need to make simultaneous efforts to increase production and reduce losses. The remark was made by General Secretary Xi Jinping. It represents the most fundamental requirement for effective grain conservation work.

General Secretary Xi Jinping has consistently emphasized the importance of grain conservation, and set forth work requirements. Recently, the Central Party Literature Press published a compilation of excerpts from discourses by Xi Jinping concerning China's food security. The book, compiled by the Institute of Party History and Literature of the CPC Central Committee, is divided into eight parts, including one section dedicated to Xi's expositions on food conservation titled "Making Food Conservation a Common Practice in the Whole Society." I would like to recommend this book to friends from the media. 

In line with its work responsibilities, the NFSRA has implemented General Secretary Xi Jinping's requirements on reducing food waste and loss. Here, I will briefly summarize the progress we have achieved in our work.

First, efforts have been made to reduce losses in the procurement process, focusing on serving the people. More than 5,500 specialized post-production grain service centers have been established to provide cleaning, drying and storage services for farmers during gain harvesting. Additionally, nearly 10 million sets of scientifically designed grain storage equipment have been promoted for use. By using the equipment as required, grain storage losses for farmers have been reduced from an average of 8% to less than 2%. Second, we have grasped the application of technology to reduce losses during storage and transportation. We have implemented measures that promote applying the "four-in-one" grain storage technology, controlled atmosphere storage, temperature-controlled storage, and other innovative technologies to enhance storage conditions and maintain grain quality, thereby reducing the incidence of spoiled grain and minimizing losses. After the application of new technologies, the total loss rate of grain in the storage cycle of the State-owned grain depots was reduced to less than 1%. In addition, we have made advancements in transportation by developing and utilizing rail-water intermodal transport receiving and unloading systems, special transport vehicles, bulk grain logistics equipment and other technical equipment. These measures have reduced grain transport losses. Third, we have promoted moderate processing to reduce the loss of finished grain production. The transformation from raw grain to finished grain involves a processing phase. In recent years, issues with excessive processing in the market have resulted in a loss of nutrition for the human body. To address this problem, we have stepped up research and development efforts in moderate processing technologies and promoted their widespread adoption. We have also upgraded processing equipment to minimize unnecessary losses and consumption of grain and oil. In such a way, we have improved the yield of finished grain and the comprehensive utilization rate of by-products. Furthermore, we have focused on standardizing grain processing. Efforts have been made to formulate standards on adequate processing to ensure food security and food safety, and in particular, people's health. We have been guiding the whole society to save food and reduce food losses through standardized practices. Fourth, we have strengthened publicity and education to reduce losses in consumption. In combination with some thematic and comprehensive activities, such as World Food Day and National Food Security Publicity Week, we consistently carry out publicity and education to promote grain conservation, nutrition and health. We strive to create a social atmosphere that encourages conservation and opposes wasteful practices, thereby enhancing people's awareness and behavioral habits regarding food conservation. In this regard, our media friends have done a lot of work. On behalf of the NFSRA, I would like to thank you.

To effectively promote grain conservation, we need the joint efforts of practitioners, consumers and all sectors of society throughout the whole process from the field to the table. Going forward, as the competent authority, we will continue to work hard in this regard. At the same time, I hope our friends from the media can help us publicize and guide these initiatives. Together, we can reduce food loss and improve food production for the benefit of all. Thank you.

Economic Daily:

Soybean is the largest variety of grain imports in China, and it is also mentioned many times in the "No.1 central document" this year. What China's current soybean market situation? What measures will the government take to enhance the stability and resilience of the soybean supply chain? Thanks.

Lu Jingbo:

Thanks for your question. Let me introduce the relevant situation. The CPC Central Committee and the State Council attach great importance to the security of soybean supply and have introduced a series of policy measures in production, processing, reserves, trade, import, and export in recent years. This year, the "No.1 central document" has made special arrangements for expanding soybean oilseeds and revitalizing the seed industry, providing a fundamental basis for further improving China's comprehensive guarantee capacity of soybean supply.

China's soybean market has two sources of supply: domestic and import, and there are certain differences between the two in function, market price, market demand and etc. Domestic soybeans are mainly used for food, like bean products, soybean milk, tofu, etc., with an annual consumption of 13 million to 15 million metric tons, and the domestic output can fully meet the demand in this regard; Imported soybeans serve chiefly as oil extraction and feeding, and the soymeal after oil extraction is used as raw material for feed production. Overall, the current situation of China's soybean market can be summarized as "two-sided sufficiency and overall stability," which means that there is a sufficient supply of domestic soybeans, a sufficient supply of imported soybeans, and overall stable market purchase and sales. From a domestic perspective, China's soybean production reached a historic high in 2022, exceeding 20 million metric tons. After fulfilling food consumption needs, there was still approximately 5 million metric tons of surplus, ensuring full market supply. From the perspective of imports, the global soybean supply-demand relationship is relatively loose. International agencies predicted that the global soybean production in 2022/23 would be approximately 370 million tons, reaching a historic high; the consumption volume would be 366 million tons, resulting in a surplus of over 3 million tons. This provides a solid foundation for China to effectively utilize both the international and domestic markets to meet its domestic consumption needs. From the perspective of market purchase and sales, the acquisition work of new soybean has maintained a stable and rapid momentum since it came into season. At the end of March, the peak season of soybean procurement was over, and companies in main soybean-producing areas had accumulated a total procurement of 4.18 million metric tons of new soybeans, an increase of 1.71 million metric tons year on year. At the same time, relevant departments in the early stage launched the new domestic soybean procurement work in the main soybean production areas of Heilongjiang and Inner Mongolia, which effectively stabilized market expectations.

To enhance the stability and resilience of the soybean supply chain, relevant departments of the state have taken a series of measures. The first is to increase production capacity, continue to promote the project of increasing soybean and oil production capacity and improve the production level and supply capacity of domestic soybeans. Meanwhile, we have improved policies on subsidies for soybean producers to make farmers benefit from planting soybeans. The second is to facilitate processing, implement actions of promoting agricultural product processing, optimize industrial layout, guide large enterprises to develop deep processing, enhance their competitiveness, and create well-known domestic soybean brands. The third is to promote reasonable consumption. We have promoted conservation and loss reduction in all links of the soybean industry chain, encouraged feed breeding enterprises to optimize, and adjust feed protein content as well as advocated for residents to adopt a healthy diet, reduce oil consumption, increase greenery, and encourage healthy consumption of vegetable oils. The fourth is to stabilize imports, strengthen international cooperation, and explore emerging soybean source markets while stabilizing the traditional soybean source market, promoting the diversification of import sources. Thank you.

China Discipline Inspection and Supervision Newspaper:

Recently, we have noticed that the website of the Central Commission for Discipline Inspection (CCDI) has successively reported several cases of violating laws and Party discipline in the field of grain purchase and sales. As the authority in the grain sector, what measures will the CCDI take to effectively manage and supervise the national grain storage? Thank you.

Lu Jingbo:

In order to earnestly implement the important instructions and directives of General Secretary Xi Jinping on ensuring national food security and strengthening the supervision of grain circulation, after the implementation of the revised Regulations on the Administration of Grain Circulation in April 2021, the NFSRA organized a nationwide special law enforcement campaign for grain circulation. A series of measures have been taken to severely crack down on illegal activities in the grain circulation field, effectively safeguarding the order of grain circulation and the legitimate rights and interests of the people. In order to further consolidate and expand upon these achievements and fully cooperate in the special rectification of corruption issues in the field of grain purchase and sales, we have organized the "Year of Intensified Supervision, Stringent Law Enforcement, and Harsh Penalties" campaign this year. This campaign aligns with the directives of the CCDI and the National Supervisory Commission, aiming to propel grain supervision to new heights.

First, we will intensify efforts to strengthen the supervision of the entire chain of grain circulation, focusing on key links in grain circulation and key nodes such as peak procurement. We will severely crack down on illegal activities such as "issuing IOUs," "round-tripping grain," and "challenges in stock release." We will focus on safeguarding the order of grain circulation and the legitimate rights and interests of grain operators. We will conduct cross-provincial law enforcement inspections, implement video spot checks, and conduct annual inventory checks as routine measures to maintain the minimum standards for accurate quantity, superior quality, and secure storage of grain in stock.

Second, we will innovate methods to improve the efficiency of supervision. We will increase the promotion of the 12325 hotline, ensuring smooth channels for reporting information regarding grain-related concerns and effectively leveraging social supervision. We will comprehensively use various means such as "unannounced inspection," "quarterly assessments," "cross inspections," and digitalized supervision to continuously improve the efficiency of supervision. We will continue to promote credit-based supervision, pay further attention and increase spot checks in areas and enterprises with poor credit records and high-risk levels.

Thirdly, we will execute thorough investigations and expedite the enforcement of punishments, upholding a high-pressure environment of stringent management and severe penalties. We will establish a prompt response mechanism to handle leads pertaining to grain-related issues, enhancing the efficiency of lead processing through direct investigations, expedited processing, and escalating for higher-level handling. We will strictly regulate law enforcement actions, strengthen case management, and increase administrative penalties in accordance with laws and regulations. The administrative penalties issued by local grain and reserve authorities will be incorporated into the evaluation of the accountability system of provincial Party committees and governments for farmland protection and food security . We are fully committed to addressing the prominent problems of non-compliance with laws, lax law enforcement, and failure to prosecute law violations.

Farmers' Daily, farmer.com.cn:

The Central Rural Work Conference proposed to advance rural revitalization on all fronts and accelerate agricultural and rural modernization. How can the high-quality grain project help rural revitalization? Thank you.

Cong Liang:

Rural and industrial revitalization are the top priorities, and the high-quality development of the grain industry is especially important. In recent years, the NFSRA has fully implemented the high-quality grain project, insisting on effectively dovetailing the high-quality development of the grain industry with rural revitalization, taking the revitalization of the grain industry as the key and focal point, promoting the building of a modern grain industry system, and lending strong impetus to rural revitalization. The focus of our work is on two aspects.

On the one hand, we will actively expand the development space of the grain industry by building, supplementing, and strengthening the chain. We will step up efforts to do a good job in grain production and sales, and the integration of primary and secondary industries, actively explore the upstream and downstream extension driven by the advantages of the grain industry chain, adapt measures according to local conditions through remedying deficiencies and strengthening weak links, and tap the potential of the entire industry chain – from the field to the dining table – to add value. For example, Funan county in Anhui province has taken the development of the high-quality wheat industry as a focal point, has promoted contract farming from 350,000 mu to 600,000 mu, and has helped farmers increase their income by more than 200 yuan per mu. At present, the "Funan Model" has been promoted and copied in 323 counties across the country, and the development of high-quality grain orders has exceeded 10 million mu, helping nearly 1.9 million small agricultural households and more than 3,400 farmer cooperatives effectively increase their income.

On the other hand, we will promote growth in rural incomes and make farmers become rich based on the improvement of the interest linkage mechanism. By making sure quality grain enjoying relatively higher prices, and building a mechanism for linking the interests of small agricultural households and leading enterprises, we fundamentally improve the ability of small agricultural households to deal with risks, allow farmers to share more of the value-added benefits of the grain industry, and promote the integrated development of the primary, secondary and tertiary industries in rural areas. For example, Huzhou city in Zhejiang province has improved the interest linkage mechanism featuring "processing enterprises + national grain warehouses + farmers" to realize cooperative grain harvesting and shared grain storage based on grain reserve resources. This scheme has added 650,000 mu to the planting area of high-quality grain , brought more than 260,000 metric tons of purchase orders, increased farmers' income by 200 million yuan, reduced costs for grain processing enterprises by 130 million yuan, and cut financial losses by 170 million yuan.

In the next step, we will further motivate local governments to develop the modern grain industry, stimulate the vitality of the entire chain of market entities, and explore new paths and new models for the development of the grain industry to boost rural revitalization. We will delve into typical cases and demonstration models and intensify publicity, promotion, and replication to promote the high-quality development of the grain industry to promote rural revitalization. Thank you.

Science and Technology Daily:

Grain storage and preservation in a scientific manner are important protections to ensure grain quantity and safety and are also the inherent requirements of effectively managing the granary of a big country. At present, what is the developing status of China's grain storage technology? What breakthroughs have been made in green grain storage and technological grain preservation? Thank you.

Huang Wei:

Thank you for your question. Using scientific and technological means to store and manage stable grain is the key to food security. Since the 18th CPC National Congress, China's modernization in grain storage facilities has been continuously improved, and our country's grain storage technology is globally advanced. Grain storage is leaping from "safe grain storage" to the stage of "green and high-quality storage." In response to your question, I would like to introduce China's technological progress in grain storage in recent years.

The first is the "four-in-one" grain storage technology. The "four-in-one" grain storage technology refers to grain situation monitoring, mechanical ventilation, circulation fumigation, and cereal cooling, which are the standard protocol for grain storage in state-owned grain warehouses.

The second is temperature-controlled grain storage. The application of technologies such as shallow geothermal energy low-temperature grain storage and internal circulation temperature control can realize low-temperature and quasi-low-temperature grain storage that will prevent the grain from going bad and can also effectively reduce grain loss, especially ensure grain quality. At present, the nationwide capacity of temperature-controlled grain storage has exceeded 100 million metric tons.

The third is the controlled atmosphere grain storage. By filling nitrogen or carbon dioxide into well-airtight confined granaries or film-covered grain piles, a low-oxygen environment is created to delay grain deterioration. At present, there are storage units with 35 million metric tons of capacity in China that have adopted the controlled atmosphere technology.

The fourth is horizontal ventilation. The ventilation channel is installed on the walls of grain warehouses so that the airflow can pass through the grain pile horizontally, reducing drops in quality caused by water loss because of ventilation. The grain moisture loss varies according to ventilation conditions, so this kind of technology is used to solve the problem.

The fifth is information technology. Through the application of information technology such as radio frequency, new sensors, and remote monitoring, the real-time monitoring of the grain situation in the granary is realized. Sometimes the temperature of the grain rises, and worms will surface. If there is a failure to find them in time, the grain cannot be processed in a timely manner. The application of electronic technology is also conducive to the storage of grain.

The sixth is insect and mildew control. In addition to the traditional light trapping equipment for grain pests, there are now many inert powders and biological agents that can effectively reduce stored grain pests. Some new technologies have not yet been put into use. We will upgrade the press on the latest development. Thank you.

People's Daily:

In recent years, the requirement for both Party and government leaders to take responsibility for food security has become more apparent. This year, the "No. 1 central document" of the CPC Central Committee outlined that a more rigorous appraisal of farmland protection and food security accountability should be applied among provincial-level Party committees and governments. How do you ensure that all local Party committees and governments fulfill the responsibility of food security through appraisals? Thank you.

Lu Jingbo:

Your question is very important. General Secretary Xi Jinping has repeatedly stressed that local Party committees and governments at all levels should shoulder the political responsibility for food security, both Party and government leaders should bear responsibility for food security, and both provincial governors and secretaries should assume responsibility for the "rice bag." Strict measures should be taken to ensure that all local Party committees and governments bear responsibility for farmland conservation. Local governments should sign written pledges to the Party Central Committee on protecting farmland, and a strict appraising system and life-long accountability should be put in place to ensure the area of farmland remains above the redline of 120 million hectares. This year, the "No. 1 central document" of the CPC Central Committee has made further arrangements and plans for accountability-based appraisal on farmland conservation and food security among provincial-level Party committees and governments.

General Secretary Xi Jinping's important instructions and the strategic deployment of the CPC Central Committee have elevated the importance of agriculture and grain production to a record high. To ensure that both Party and government leaders assume responsibility for food security, relevant departments have studied and formulated institutional documents, while improving policy systems. They have specified that the NDRC, Ministry of Natural Resources, Ministry of Agriculture and Rural Affairs, and the NFSRA and other relevant departments should enhance the system of provincial governors assuming responsibility for food security. Additionally, these departments are required to conduct annual appraisals to assess the implementation of such responsibilities by provincial-level Party committees and governments.

At present, measures on the appraisal of farmland protection and food security accountability among provincial-level Party committees and governments have been released, focusing on the following four aspects:

First, we should emphasize responsibilities in more detail. In addition to assessing the specific responsibility for food security among governments, more specific political and leadership responsibilities will be taken among Party committees. This fully demonstrates the idea that "both Party and government leaders should take responsibility for coordination and cooperation."

Second, we should reinforce a systems-based approach. We will establish a connection between the appraisal of farmland protection and accountability for food security. This will facilitate coordinated support for multi-faceted links, ensuring a better integration and more effective linking for the productive factor combinations.

Third, we should emphasize the key areas of evaluation. In accordance with the general requirements of problem orientation and stringent appraisal, we will set well-conceived assessing indicators and weight the scores, set a one-vote veto on key issues such as farmland protection, grain production and planting structure adjustment, clarify the appraising "red line," and maintain the bottom line of safety.

Fourth, we should emphasize the importance of both incentives and constraints. Provinces and equivalent administrative units that have achieved remarkable results by implementing major innovative measures to protect farmland and ensure food security will receive appropriate rewards.

This year marks the first year of tests for provincial-level Party committees and governments on their work in farmland protection and food safety. For the next step, to ensure the effective implementation of decisions and deployments made by the CPC Central Committee and the State Council and the firm food supply for 1.4 billion Chinese people, we will adhere to the strategic deployments made at the 20th CPC National Congress, accelerate the arrangements of performance assessment, conduct performance evaluation in a strict manner, and consolidate the responsibilities of local Party committees and governments to protect farmland and ensure food safety in accordance with relevant regulations, and from a comprehensive perspective, to enhance the foundation of food safety. Thank you.

Shou Xiaoli:

Due to time constraints, the last two questions please.

Sannongfabu:

Food safety has always been a major concern to all. In recent years, cadmium-contaminated rice and fungi-contaminated wheat have attracted massive attention. I would like to ask, what measures will you take to safeguard food safety? Thank you. 

Huang Wei:

The quality of grain is highly relevant to each household, remaining a major concern to all. Hereby, I would like to share an overall conclusion with you all. Our government has conducted risk monitoring work on grain quality during the process of purchasing and storing on a yearly basis since 2006. According to our information, the overall situation of China's grain quality remains good. Therefore, please rest assured that the overall situation is good in both the links of purchasing and storing. The concerns raised by the journalist are attributed to many other factors, such as soil and water pollution and climate change. The key is how we deal with it. Therefore, regarding this area of work, the government has attached great significance. In accordance with the "four strictest requirements": the strictest standards, the strictest supervision, the strictest punishment, and the strictest accountability, raised by General Secretary Xi Jinping, our work is mainly focused on monitoring and inspection. Once we find contaminated food of such kind, we will take measures in a timely and effective manner. Our only goal is to ensure that no contaminated food shall be allowed to enter the staple food market. This is our ultimate goal, as well as a "redline." 

First, we will conduct monitoring work at an earlier stage, carrying out quality and food safety index monitoring during the process of purchasing. We have collected over 70,000 samples each year to timely grasp the quality and safety situation of newly acquired grain, actively understand the situation of contaminated grain in advance, and earn time to deal with those issues immediately.

Second, we will take strict measures to ensure quality inspection. Under the multi-tiered national-, provincial-, municipal-, and county-level inspection and monitoring systems for food quality and safety, we have expanded investment in inspection technology and equipment and comprehensively upgraded the functions of more than 1,500 food quality and safety inspection institutions and laboratories nationwide, adding 29,000 inspection parameters and 26,000 samples a month on average. We have created favorable conditions for the warehouse entry and exit of grain.

Third, we will resolutely adhere to the classification of treatment. In the process of purchasing, contaminated grain should be purchased at designated points, stored exclusively, and supervised throughout the whole process. It should not be allowed to mix with other grains in general circulation and should be managed in a closed loop. In the process of storing, we should take the purpose of use into consideration. For example, for the grains in industrial use, we should conduct regular or occasional sampling inspections on the quality of stored grain in order to accurately understand the quality of grain and resolutely ensure none of the substandard grains be allowed to enter the staple food market or food production enterprises.

Fourth, we will strengthen the responsibilities of local Party committees and governments. The responsibilities of Party committees and governments at all levels should be fully consolidated through the shared accountability system of the Party and government. Regarding the issue of food safety, China has established a synergistic mechanism among ministries and commissions and a systematic supervision system in government at all levels, in accordance with the requirements of the Food Safety Law. Relevant work has been included in the assessment of the shared accountability system of the Party and government, working as an important indicator. If there appears to be one problem, we will activate a one-vote-down system. Please rest assured that the government's attitude remains resolute in dealing with the issues of food safety. We will never allow any contaminated food to enter the staple food market or the tables of thousands of households. Thank you.

MASTV:

As the summer grain purchase of this year is about to start, I would like to ask, what measures will be taken to bring every grain to the granary? Relevant reports showed that the future price of international wheat has hit a two-year low. What are your expectations about the price of China's summer wheat after purchasing? Thank you.

Cong Liang:

Summer grain purchase is the first task of China's annual grain purchase, playing a key role throughout the whole year. We are going to see the harvests of rapeseed and wheat from south to north. The NFSRA will work with relevant departments to concretely implement food safety requirements under the shared accountability system of the Party and government, faithfully put summer grain purchase high on the agenda, meticulously organize and carry out market-oriented and policy-based purchasing work, continue to provide services for farmers and enterprises, strictly enforce law enforcement and supervision on grain circulation, refine tasks, consolidate responsibilities, and take multiple measures at the same time so as to ensure the smooth development of summer grain purchase from all aspects.

Since last year, the international market of wheat has witnessed continuous fluctuations due to multiple factors such as regional conflicts, extreme weather, and capital speculation. However, China's wheat has achieved successive years of bumper harvests, maintaining a good balance between production and demand. The country's wheat inventory is at a high level and achieves absolute security of staple food. The market has operated in a stable manner on the whole. Regarding the dispatching situation, the sown area of wheat this year has expanded more than that of last year. The wheat is growing well, and looks forward to another good harvest again. It is expected that the price of new wheat will maintain stable. At present, the market prices of wheat and early indica rice are obviously higher than the minimum purchase prices, so it seems unlikely to start a consignment purchase plan. We will strengthen market monitoring, work with relevant parties to launch a minimum purchase plan in eligible places, give full play to the supporting role of policies, and ensure the bottom line that all farmers' grain can be sold. Thank you.

Shou Xiaoli:

Thank you to all speakers and friends from the media. Today's briefing concludes now. Goodbye.

Translated and edited by Wang Yiming, Wang Qian, Zhang Rui, Liu Sitong, Liu Caiyi, Zhang Junmian, Wang Yanfang, Yan Bin, He Shan, Zhang Tingting, Li Huiru, Qin Qi, Ma Yujia, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speaker:

Ms. Wang Chunying, deputy administrator and spokesperson of the State Administration of Foreign Exchange

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 21, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. At today's press conference held by the State Council Information Office (SCIO), we are joined by Ms. Wang Chunying, deputy administrator and spokesperson of the State Administration of Foreign Exchange (SAFE). Ms. Wang will present the data on China's foreign exchange receipts and payments for the first quarter of 2023, and also take your questions.

Now, I will give the floor to Ms. Wang Chunying for a brief introduction.

Wang Chunying:

Good morning, everyone. Welcome to today's press conference. Now, I would like to brief you on China's foreign exchange receipts and payments situations for the first quarter of 2023 and then take your questions.

In the first quarter of 2023, there were still uncertainties in the international financial market, with an increasing downward pressure on the global economy and a slowdown in the tightening of monetary policy in major developed economies. Facing a complex external environment, China has followed the general principle of pursuing progress while ensuring stability, and has made concrete efforts to promote high-quality development under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core. Major macroeconomic indicators have stabilized, and the economy has maintained a momentum of recovery and development. China's foreign exchange market got off to a stable start, the exchange rate of the yuan against the US dollar increased slightly, and the cross-border capital flow became more balanced.

According to the data on foreign exchange settlement and sales by banks in the first quarter of this year, in US dollar terms, banks settled $546 billion and sold $561.3 billion, representing a deficit of $15.3 billion; or in yuan terms, banks settled 3.74 trillion yuan and sold 3.84 trillion yuan, recording a deficit of 105.5 billion yuan. For cross-border receipts and payments by non-banking sectors, in US dollar terms, banks registered $1.4850 trillion in foreign-related receipts and $1.4508 trillion in foreign-related payments for customers, representing a surplus of $34.2 billion; or in yuan terms, banks handled foreign-related receipts of 10.17 trillion yuan and payments of 9.93 trillion yuan for customers, recording a surplus of 232.9 billion yuan.

China's foreign exchange receipts and payments for the first quarter of 2023 show the following characteristics:

First, China's cross-border capital flows are generally stable. In the first quarter of 2023, the cross-border receipts and payments by non-banking sectors recorded a surplus of $34.2 billion, while the foreign exchange settlement and sales by banks posted a deficit of $15.3 billion. Specifically, the surplus reached a seasonal high before the Spring Festival in terms of cross-border receipts and payments by non-banking sectors, but it tended to reach a basic equilibrium in February and March. The balance in foreign exchange settlement and sales by banks fluctuated in a narrow range in January and February and was represented by a small deficit in March. To sum up, the supply and demand of domestic foreign exchange were basically in balance.

Second, the cross-border capital flows under the current account were stable, while that under the capital account ran smoothly and orderly. In the first quarter of 2023, the net inflow of capital under trade in goods continued to be relatively high, while the net outflow of capital under trade in services increased year on year, which was mainly attributed to the fact that the resident travelling abroad has increased but was still lower than its pre-pandemic level. The net inflow of foreign direct investment (FDI) in China remained, and the foreign investment in China's securities market showed a net increase. Meanwhile, China's outward direct investment and its holdings of foreign securities maintained a reasonable and orderly development trend.

Third, the foreign exchange sales rate was kept at a stable level for nearly one year, while the foreign exchange financing by enterprises remained stable. In the first quarter of 2023, the sales rate, a measure of customers' willingness to buy foreign exchange, which is the ratio of foreign exchange purchased by customers from banks to foreign-related foreign exchange payments made by customers, stood at 68%, basically the same as that in the fourth quarter of 2022. The sales rate for each quarter has remained at around 68% since the second quarter of 2022. In terms of financing, the outstanding domestic foreign exchange loans of market participants, such as Chinese enterprises, reached $281 billion by the end of February 2023, an increase of $9.7 billion from the end of 2022. By the end of March, the balance of foreign currency financing under international trade, such as import refinancing and forward letter of credit, stood at $73.1 billion, a slight decline of $3.7 billion from the end of 2022.

Fourth, the foreign exchange settlement ratio increased steadily, and the balance of enterprises' foreign exchange deposits remained basically stable. In the first quarter of 2023, the foreign exchange settlement ratio, a measure of customers' willingness to settle foreign exchange, or the ratio of foreign exchange sold by customers to banks to customers' foreign-related foreign exchange receipts, reached 64%, up by one percentage point from the fourth quarter of 2022. By the end of February 2023, domestic foreign exchange deposits held by Chinese enterprises and other market participants totaled $640.6 billion, an increase of $6.5 billion from the end of 2022.

Fifth, the volume of China's foreign exchange reserves remained basically stable. China's foreign exchange reserves increased by $56.2 billion from the end of 2022 to $3.1839 trillion at the end of March this year, mainly due to the combined effects of currency translation, asset price changes, and other factors.

Looking ahead, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the SAFE will fully implement the guiding principles of the 20th CPC National Congress. We will work holistically to ensure both development and security, and continuously deepen the reform and opening up in the foreign exchange sector. More efforts will be made to advance the high-standard opening up under capital account steadily and orderly to facilitate cross-border trade, investment and financing, and to optimize the foreign exchange reserve operation and management system with Chinese characteristics. We will constantly improve the two-pronged "macro-prudential management and micro regulation" framework to guard against the risks and shocks from the external financial market, and maintain the stable operation of the foreign exchange market and national economic and financial security, in a bid to serve the high-quality development of the real economy.

The facts mentioned above are what I want to share with you on the main data of China's foreign exchange receipts and payments for the first quarter of 2023. Now, I'd like to take your questions. Thank you.

Chen Wenjun:

Now the floor is open for questions. Please identify the media organization you work for before posing your questions.

CCTV:

Since the beginning of this year, there have been some changes in the domestic and international economic and financial environment. What will you say about the performance of the foreign exchange market in the first quarter of this year? What are the new changes and features? Thank you.

Wang Chunying:

Overall, China's foreign exchange market has achieved a good start in the first quarter of this year. It can be observed that the main features are more stable performance in the exchange rate of the yuan, reasonable market expectations, and an autonomous balance of the supply and demand in the domestic foreign exchange market.

First, the yuan exchange rate was generally stable from a global perspective, with a slight appreciation despite two-way fluctuations. As of yesterday, the onshore exchange rates of the yuan rose by 1% against the US dollar from the end of 2022. In terms of multilateral exchange rate, the yuan exchange rate index rose by 1.3% according to China Foreign Exchange Trade System, while the emerging market currency index (EMCI) increased by 1.1% during the same period. Turning to the market movement: the trend of the yuan exchange rate has become more stable lately. Due to the effects of foreign economic and financial shocks, as well as seasonal factors, the yuan exchange rate fluctuated in the market throughout the first two months of this year, particularly around the Spring Festival. Since the mid-March, the yuan exchange rate has been steadily rising, as major economic indicators in China were improving, and the monetary tightening policy in major developed economies was narrowing in scope and slowing down in pace. As a result, the first finding we came to is that, from a global perspective, the yuan exchange rate has seen two-way fluctuations within a reasonable range and a slight appreciation since the beginning of the year.

Second, the exchange rate expectation of the market participants was stable, and the way they made foreign exchange transactions became more reasonable. We noticed that the indicators such as foreign exchange forwards and options have shown no apparent signs of one-way appreciation or strong expectation of depreciation in the yuan exchange rate. The market participants maintained a rational transaction behavior of "settling foreign exchange when the rate is high and buying foreign exchange when the rate is low". In February, the yuan depreciated because customers such as businesses and individuals exchanged foreign currency for yuan, which was why the settlement ratio rose by nearly nine percentage points this month from January. According to our analysis, customers had reasonable needs to sell foreign exchange when the yuan depreciated. It is observed that with the appreciation of the yuan in mid-to-late March, the willingness to buy foreign exchange was strong among business participants, and the foreign exchange settlement and sales by banks posted a deficit in March. Thus, in the first quarter, the exchange rate expectation of the market participants was stable, and their foreign exchange trading became more rational, showing an obvious sign of the rational trading mode mentioned above.

Third, the autonomous balance of the supply and demand in the domestic foreign exchange market was further consolidated. From the perspective of foreign exchange settlement and sales by banks, the foreign exchange market achieved an autonomous clearance in the first quarter of this year. As the foreign exchange market was supplied with foreign exchanges by banks reducing their holdings, overseas entities buying and selling of foreign exchanges in the interbank market, etc., it balanced the small deficit of foreign exchange settlement and sales by customers. From the point of view of the balance of payments (BOP) in recent years, China's current account surplus, foreign investment, and other sources of funds have been mainly balanced by outward investments by domestic market participants, thereby enabling some sort of automatic matching of the sources with using of foreign funds. According to the preliminary data, in January and February, the current account surplus and the FDI in China were still the primary source of foreign exchange funds for China. Foreign funds were mainly used as the outward direct investments and investments in overseas securities. This also explains some of the discussions about where our surplus has gone. In recent years, the People's Bank of China (PBC) has almost withdrawn its "regular" intervention in the foreign exchange market, so the source and using of foreign funds are mainly among market participants.

To sum up, the steady recovery of China's economy from the beginning of this year has laid a consolidated foundation for a good start for the foreign exchange market. Meanwhile, the role of yuan exchange rate as an automatic stabilizer for adjusting BOP has been more obvious, and the market participants have become more mature and rational and can better adapt to changes in the external environment. All of these ensured the stable operation of the foreign exchange market.

This is my answer to your question, thank you.

China News Service:

What's the situation about the inflow of FDI in recent years? What do you think about the prospect of FDI in China? Thanks.

Wang Chunying:

Direct investment reflects medium- and long-term investment intentions, and investors are more interested in the long-term development prospects of a country's economy and some of its fundamental advantages.

From a global perspective, China has always been a major destination for FDI. The COVID-19 pandemic has increased the volatility of the world economy and finance, which exerted huge impacts on the global FDI. In 2020, the outbreak of the pandemic constrained economic activity, so the global FDI plummeted. In 2021, the recovery of the world economy drove the rapid growth of FDI as it rebounded from a low position. In 2022, the global economic recovery slowed down, so did the growth of FDI, which gradually returned to its pre-pandemic level. The net FDI in BOP is calculated according to the unified international standard, which includes capital investment and earnings reinvestment. Many foreign-funded enterprises profit from their operations and may not remit all the money abroad. Many of them are optimistic about a country's economy, so the profits stay within the country and are reinvested. There are also shareholder loans, which fall into the category of direct investment. Overall, China has excelled globally in absorbing FDI, and the net inflow of FDI in China in the past decade was among the world's highest.

Speaking of prospects, what can foreign investors gain by investing in China? Foreign investors can share the investment, transformation, and market dividends of China's high-quality economic development by investing in China.

First, China's overall situation is stable, and the Chinese economy has maintained a medium-high growth in the past decade. The return on FDI in China is stable and at a relatively high level globally. Our calculations show that, over the previous five years, the return on FDI in China has been around 9.1%, while in Europe and the US around 3%. The return on FDI in emerging economies such as Brazil, South Africa, and India has been around 4% - 8%. It can be clearly seen that the return on FDI in China is among the highest.

Second, China has the world's best manufacturing capability. Its infrastructure is well-developed, and its industrial and supply chain systems are complete and stable. At the same time, the quality of the Chinese labor force is relatively high, with 240 million people having received higher education. All these continue to provide a good foundation for the innovation and development of multinational companies. Additionally, the Chinese economy is on the course of transformation into high-quality development, with new growth points springing up, such as the development of science and technology innovation and the expansion of opening up in the service sector, which will continue to attract the inflow of FDI.

Third, China has a large population, with the largest middle-income population in the world and a highly potential domestic consumer market, which provides more opportunities for foreign investors in production, sales, and services in China. Surveys by some foreign chambers of commerce and global management consulting firms, we have seen lately, show that as China's economy recovers, foreign investors are more confident in investing in China and more optimistic about its economic development prospects. We believe that foreign investors will continue to invest in the Chinese market steadily in the future.

On the policy front, China will adhere to a high-standard opening up, improve the business environment, and reduce market access to foreign investment to better serve the foreign-invested enterprises. The SAFE will continue to facilitate cross-border investment and financing and help stabilize and expand the scale of FDI. Thanks.

Economic Daily:

What is the current situation of foreign investors investing in yuan assets? What changes do you see in the future? Thank you.

Wang Chunying:

Thank you for your question. I am going to answer your question from the following aspects.

In recent years, the overall scale of foreign investment in yuan assets has risen, and China has gradually become the leading force in absorbing portfolio investment among emerging economies. Last year, under high inflationary pressure, the Fed rapidly tightened monetary policy, and as a result, both the exchange rate and interest rates of the US dollar rose significantly. The scale of cross-border bond investments absorbed by countries worldwide decreased greatly, and the stock markets of major emerging economies saw a retraction of funds. Under such circumstances, China's foreign exchange market and securities market remained stable, although China also faced the impact of Sino-US interest rate differentials on the yuan exchange rate and investment adjustments of foreign funds in the Chinese securities market. The investments of foreign central banks and banking institutions in China's bond market were relatively stable, and foreign capital in the China's securities market showed a net inflow overall. The changes in the scale of cross-border capital inflows and outflows under securities investment did not change the overall equilibrium of BOP in China.

With the improvement of the internal and external environment in recent months, foreign investment in Chinese securities was on an upward trend. First, China's economy has steadily recovered, and market expectations have been boosted. Foreign investors have become increasingly enthusiastic about investing in yuan assets. Second, due to multiple factors, the exchange rate and interest rates of the US dollar have recently fallen from their high levels, and the spread inversion of 10-year treasury bonds between China and the US has tended to converge, having narrowed by half from a peak of 1.5 percentage points to the current level of about 0.7 percentage points. In January 2023, the net increase in China's domestic shares held by foreign investors hit a record high; in March, the balance of China's domestic bonds held by foreign investors rebounded from February.

In the future, foreign investors will continue to invest in China's securities market, as they are attracted by several advantages of the renminbi assets: steady profitability, high investment value and strong appeal for investors seeking to diversify portfolio. I'll touch on each of these briefly.

First, the yuan's value is stable, which keeps foreign investors from big exchange losses. The yuan exchange rate has remained generally stable at an appropriate and balanced level in recent years. Even in 2022, when the external environment is complex and volatile, the fluctuation of the yuan exchange rate was significantly lower than that of the Japanese yen, the British pound, the euro, and major emerging market currencies. Thus, foreign investors will not suffer significant exchange losses in holding yuan assets.

Second, the yuan-denominated assets have strong appeal for investors seeking to diversify portfolio. China's economic cycle is not synchronized with that of major developed economies. The macroeconomic policy, the interest rate, exchange rate and asset prices in China are relatively independent, which endows yuan assets with a better diversification effect in global asset allocation. People who make investments understand this point, and appreciate it. At the same time, China's bond market is the second largest in the world in terms of size, which means we have good liquidity. With the characteristics of safety and liquidity, the yuan assets have gradually become quasi-safe assets.

Third, the yuan bond price is less volatile with stable returns. From a global perspective, volatility in yuan bond returns is low. In most cases, the higher the volatility, the riskier the security, so it means that the investment return of yuan bonds is more stable. According to the calculation, last year, the volatility of annualized monthly return of the yuan treasury bond index was 2.4%, and that of the US dollar bond was 6.6%. Through such a comparison, we can find out that the yuan bond price is less volatile with stable returns.

Fourth, China's securities market is undervalued and has good investment prospects. No matter the price-to-earning (P/E) ratio or price-to-book (P/B) ratio or other indicators, the current valuation of A shares is relatively low, so the investment value is comparatively high, and the potential risk is relatively low.

Overall, China's economy will progressively improve, its financial market will steadily open up, and there is still potential for foreign investment to enter the country. At present, foreign investors' current holdings of both onshore stock and bond portfolios are at low levels, so there is ample room for them to invest in China's securities market.

This is my response to your question. Thank you.

ThePaper.cn:

Recently, some developed economies kept on raising interest rates. Have there been any changes to China's external debt, and how does the SAFE evaluate China's current external debt level? Thanks.

Wang Chunying:

We can observe and evaluate changes in China's external debt from macro and micro perspectives.

At the micro level, market participants were more rational and cross-border financing adjustment was moderate. In recent years, market participants have been able to view the changes in interest rates and foreign exchange rates in a more rational way, and their expectations have become more stable. In line with the actual needs of trade and investment, we utilized and adjusted domestic and foreign financing reasonably, thus observing more smooth changes in the external debt. Fed's adoption of quantitative easing (QE) has lowered the financing costs in US dollars from 2020 to 2021. Therefore, the external financing demand of market participants expanded moderately, and the outstanding external debt of traditional financing types, such as cross-border deposits, loans, and trade credit, grew at an average annual rate of 8%, which was significantly lower than the 21% annual growth rate during the last round of Fed's QE from 2009 to 2013. In 2022, the Fed began to tighten monetary policy. The balance of financing external debt fell by 10%, which was markedly lower than the 34% decline in 2015. In the first quarter of this year, the outstanding financing external debt further stabilized. These changes show that if there is no excessive leveraging in the early stage, there will not be substantial deleveraging in the later stage, which is my explanation of the rise and fall of the external debt scale from the perspective of micro perspective.

From a macro perspective, the total amount of China's external debt is reasonable, with its structure being constantly optimized and risks controllable. First, the scale of external debt is compatible with China's economic development. It is a relatively desirable and benign pattern of external debt development for a country if it can fully absorb external funds to support its domestic economic development within a moderate range. In recent years, China's external debt has generally grown steadily, and the ratio of outstanding external debt to GDP has always remained within the range of 14%-16%. Second, the structure of China's external debt has been constantly optimized. At the end of last year, the proportion of the outstanding external debt in domestic currency and the outstanding medium- and long-term external debt reached 45%, up by 7 percentage points and 11 percentage points respectively from the end of 2016. About 30% of China's external debt is the domestic yuan bond held by overseas investors, of which most are medium- and long-term investments. Therefore, the overall risk of external debt servicing is relatively low. Third, the main external debt indicators are within the safety line, and the synergy between external assets and liabilities is enhanced. As of the end of last year, the ratio of external debt to GDP, ratio of external debt to exports, debt service ratio, and ratio of short-term external debt to foreign exchange reserves of China were all within the international safety line and far lower than the overall level of developed countries and emerging markets. At the same time, according to the statement of BOP, China presents itself as a country with net foreign assets. At present, the overseas assets held by foreign exchange market participants, excluding foreign exchange reserves, are close to $6 trillion, of which $3.5 trillion is in securities, deposits, loans, and other assets with good liquidity. Under the regulation of market mechanism, external assets and liabilities can be reallocated among different market participants, which provides sufficient financial support for them to undertake external debt repayment obligations.

According to our observation from micro and macro perspectives, we believe that the scale of China's external debt is reasonable, and it is expected to maintain a stable development trend in the future. SAFE will continue to improve cross-border investment and financing facilitation in the upcoming phase and work holistically to meet market participants' needs for cross-border financing while maintaining stable development and security. Meanwhile, we will also continue to keep a close eye on the security of external debt. Thanks.

Hong Kong Bauhinia Magazine:

According to the data just released, China's foreign exchange market has started well this year. In your opinion, will this good start last? What would you say about the future trend of China's foreign exchange market? Thank you.

Wang Chunying:

My answer to your question is yes, and China's foreign exchange market's strong start will continue. According to the economic trend at home and abroad and the characteristics of China's foreign exchange market, it has a better foundation to maintain stable operations under the dual support of sound macroeconomic fundamentals and its inherent resilience.

On the one hand, major economic indicators are improving, further consolidating the internal foundation for the smooth operation of the foreign exchange market. With the stabilizing and recovery of China's economy, the GDP in the first quarter increased by 4.5% year on year, which shows the resilience, potential and vitality of the Chinese economy. The market expectation has also improved significantly. The IMF estimates that China's GDP will grow 5.2% this year, 2.2 percentage points higher than that of last year. Besides, many world-renowned investment banks have also raised their expectations for China's economic growth, and most of them estimate that China's GDP growth will exceed 6%. While on the contrary, the major developed economies are facing increasing downward pressure. The global economy is forecast to grow 2.8% in 2023, down 0.6 percentage points from that of last year. A series of data shows an obvious gap between domestic and foreign economic growth, and the foundation for the stable operation of the foreign exchange market is very good. At the same time, China will unswervingly deepen reform and expand high-standard opening up to the outside world. The SAFE will continue implementing policies to stabilize foreign trade and investment. These will further enhance the smooth operation and healthy development of the foreign exchange market. Since the beginning of this year, with the slowing down of the Fed's tightening monetary policy, the market generally expects that the Fed's interest rate hike may end. Because the dollar may lose momentum for sustained appreciation and given the interest rate gap between China and the US has been closing, there will likely be less of an external influence on China's foreign exchange market.

On the other hand, the resilience of China's foreign exchange market has been enhanced, enabling it to better adapt to changes in the external environment. More elasticity has been seen in the yuan. The market participants have developed a better understanding of the two-way fluctuation of the exchange rate, so their expectation of the exchange rate has become more stable. Besides, the role of the yuan exchange rate as an "automatic stabilizer" of macroeconomic adjustments and international payments has increased. The yuan has been more widely used in cross-border transactions, and its share in cross-border payments was close to 50% in 2022 and increased further in the first quarter of this year, which helps reduce the risk of currency mismatch in cross-border transactions. With the promotion of foreign exchange risk neutrality, more enterprises came to understand how to manage risks in foreign exchange through various publicity and learning and became more adapted to exchange rate fluctuations.

The fact that China's foreign exchange market has been more mature and the market participants have become more rational is an internal positive factor for the stability of the foreign exchange market. Therefore, China's foreign exchange market is better positioned for stability. At the same time, there are still unstable and uncertain factors in the external environment, so we will continue to strengthen statistical monitoring and deepen analyzing various influencing factors. Besides, the SAFE will continue to sum up the experience of preventing and dealing with external risks and improve macro-prudential management and micro regulation to safeguard the stability of China's foreign exchange market and national economic and financial security. Thanks.

21st Century Business Herald:

Just now, you mentioned that SAFE has been promoting risk neutrality awareness in Chinese enterprises. What other measures will SAFE take this year to guide Chinese enterprises, particularly micro, small and medium-sized enterprises (MSMEs), to avoid exchange rate risks? Thanks.

Wang Chunying:

Before answering this question, I once again ask you to continue to help us carry out publicity. In recent years, we have intensified our efforts to raise the awareness of risk neutrality of Chinese enterprises and have achieved remarkable results. We will continue to proceed with the work this year. SAFE always encourages enterprises to adopt appropriate strategies to manage exchange rate risk exposure according to their actual situation. There are many ways for enterprises to control exchange rate risks. In addition to hedging through derivatives, the use of yuan settlement is also a good way. And trade financing, whether late payment or early payment, late collection or early collection, is also a great method to hedge risks. According to the survey of SAFE, in the first quarter of this year, a considerable number of enterprises have adopted methods, including yuan settlement, hedging operations, adjusting settlement methods, and changing the speed of reimbursement of goods to manage the exchange rate risk. These are all excellent methods.

Efforts will be made to promote enterprises to establish a sense of risk neutrality, especially among MSMEs, and to make them do better in exchange rate hedging. To this end, we will work on the following aspects and strive to enhance enterprises' ability to improve the quality and efficiency in risk management of foreign exchange.

First, we will continue to offer guidance on raising their awareness of exchange rate risk neutrality. For example, we will expand the coverage of publicity in this aspect. Especially, we will offer targeted guidance to those enterprises with potential demands that have not carried out or rarely used hedging operations. Besides, we will provide more detailed and targeted exchange rate risk management guidelines. We plan to work with the State-owned Assets Supervision and Administration Commission (SASAC) to compile cases of hedging guidelines for state-owned enterprises and prepare a set of cases of enterprise exchange rate risk management. We count on media friends to help us publicize.

Second, we will support financial institutions to enhance service capacity building. We will improve the special assessment of exchange rate risk management of financial institutions on serving enterprises and guide and encourage banks to optimize the credit margin system, especially for MSMEs. At the same time, we will enhance the business capacity of bank branches to provide better services to more market participants, particularly MSMEs. Doing so will form a long-term mechanism for banks to serve enterprises in the area of exchange rate risk management. We will continue to make steady and concrete efforts in this regard.

Third, we will provide more support for MSMEs in exchange rate hedging. We continue to pool efforts to optimize the cost-sharing mechanism among the government, banks, and enterprises so as to reduce the hedging costs of MSMEs. At the same time, we need to ensure that the existing policies continue to be effective. Government departments have taken numerous actions over the last two years to lower the hedging expenses for MSMEs. At the same time, we encourage the development of new forms of trade and support the integrated foreign trade service platform in providing foreign exchange hedging services for MSMEs.

Finally, I would like to stress again that enterprises must establish awareness of exchange rate risk neutrality. We encourage enterprises to base themselves on the main business, adhere to financial stability and sustainable development, and keep exchange rate risk exposure within a controllable range. Besides, they should prudently arrange the currency structure and maturity of assets and liabilities and choose appropriate exchange rate hedging strategies. Thanks.

Yicai.com:

This year, the external situation is still severe and complicated, and our foreign trade faces challenges. What has the SAFE done to stabilize foreign trade recently? What new measures will be taken? Thank you.

Wang Chunying:

In terms of stabilizing foreign trade, SAFE has further advanced the reform and opening up in the foreign exchange sector and promoted foreign trade growth with high-quality facilitation policies. What we have done is as follows: First, we expanded the scope and improved the quality of policies to facilitate foreign exchange receipt and payment in trade for high-quality enterprises. Last year, with broadened service scope, these policies benefited more SMEs nationwide. By the end of March this year, an amount of $1.4 trillion has been granted to facilitate foreign exchange receipt and payment in trade for high-quality enterprises. Next, we will continue to improve the coverage, quality, and efficacy of these facilitation policies and encourage banks' enthusiasm, initiative, and creativity in implementing such policies, so that more enterprises operating with integrity can enjoy policy convenience. We will strive to foster a market environment where "the more honest the enterprise is, the more convenient the procedure will be" and "the more compliant the bank is, the more independent the audit will be".

Second, we step up the high-level opening up for cross-border trade and investment. We encourage more high-tech companies and specialized and sophisticated enterprises to borrow external debts independently within a certain quota and expand their financing channels. By the end of last year, enterprises in 17 provinces or municipalities directly under the central government had borrowed external debts under the facilitation quota, with an average interest rate of 2.4%. It has significantly reduced the financing cost of enterprises, which is conducive to business operations and trade. At the same time, SAFE implemented the pilot program of external debt registration in which the pilot enterprises are not required to register each specific case in the utilization of external debts. It effectively facilitates market participants' use of external debts and decreases their "foot-cost". Optimizing the integrated cash-pooling of both domestic and foreign currencies for multinational companies, we have greatly saved their costs, improved the efficiency of bank-enterprise business handling, and promoted the facilitation of investment and financing. In the future, we will continue to push ahead with pilot projects on a higher level of opening up in foreign trade and investment and instruct the implementation of policy measures in the four free trade zones (FTZs) in China, such as the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone. We will evaluate and improve relevant pilot policies promptly, and constantly optimize such policies through pilot projects. We aim to promote the facilitation policies further so that more businesses can enjoy the convenience.

Third, we will urge enterprises to improve their exchange rate risk management capacity. More efforts will be made to promote the awareness of exchange rate risk neutrality among enterprises and to reduce the hedging costs for MSMEs.

Fourth, we will expand the application scenarios of cross-border financial service platforms. At present, seven financing scenarios and three foreign exchange facilitation scenarios have been successfully launched at the cross-border financial service platform, which has more than 500 participating banks and serves more than 80,000 participants, with a total financing amount of $250 billion, and facilitating foreign exchange payments of over $880 billion. The cross-border financial service platform is very useful. We have publicized it in detail in the past, and you can learn more about it. In the future, we will continue to expand the application scenarios at the platform, and facilitate cross-border trade, investment, and financing of SMEs to ensure the steady and sound development of the foreign-related economy. The more enterprises and banks use the platform, the more SMEs will enjoy the benefits of policies to facilitate foreign trade, investment, and financing.

In terms of stabilizing foreign trade, what the SAFE has done and will do is to promote foreign trade growth through high-quality facilitation policies. Thanks.

Phoenix TV:

The current account surplus for 2022 was high, creating favorable conditions for stabilizing the foreign exchange market. The growth of the global economy is expected to decline this year. What's your opinion on the performance of the current account this year? Thanks.

Wang Chunying:

Your observation is correct. In recent years, China's current account has shown strong stability, and the current account surplus has continued to grow steadily, which has played a positive role in stabilizing the BOP and the foreign exchange market. This year, people are concerned about the impact of changes in external demand and the resumption of cross-border flows of people. I will give my response and analysis from these two aspects. Overall, China's trade in goods and services has been more effective and efficient in recent years, which has helped the country maintain a reasonable current account surplus and given the foreign exchange market considerable support.

The trade surplus in goods will remain relatively high, as structural changes have gradually taken place in foreign trade in recent years, which have provided more support to exports. First, new drivers of trade growth are emerging as China's manufacturing sector continues to transform and upgrade, its industrial chain and supply chain become more stable, and its products become more competitive. The total value of exports of electric vehicles, lithium batteries, and solar cells rose by 67% in yuan terms in the first quarter of this year, driving exports by 2 percentage points. Compared to last year, this pulling effect is even stronger. Second, China continued to enhance regional trade cooperation and made positive progress in diversifying trade partners. In the first quarter of this year, China's exports to ASEAN and countries along the Belt and Road Initiative increased by 28% and 25%, respectively. Third, digital trade, represented by cross-border e-commerce, is booming. Cross-border e-commerce exports grew rapidly in the first quarter, significantly driving the export growth. What about imports? Currently, we have agreed on further boosting domestic investment and consumption. Under this consensus, the import volume will keep growing, and commodity prices may fall from high levels. Overall, imports are expected to remain stable.

As for trade in services, high-quality development of trade in services is gradually producing results, which will contribute to the balanced development of China's import and export of trade in services. In recent years, China's manufacturing and service industries have integrated and developed. The rapid development of trade in productive services, especially computer information services, business services, and other emerging services, will drive the income growth from exports of services. For example, China is speeding up the construction of "digital China". From 2020 to 2022, the average annual growth rate of trade in digitally deliverable services exceeded 10%, much higher than the overall 3% growth rate of trade in services. For the first time ever in 2022, China's trade in services that can be delivered over information and communication technologies (ICT) networks recorded a surplus of more than $10 billion, showing the country's growing international competitiveness in digital products and services. On the other hand, cross-border travel consumption, which you are concerned about, has been the main form of China's import of trade in services. We can see from the experience of the steady recovery of cross-border travel in major Asian countries that it will take some time to restore the Chinese cross-border travel consumption.

Based on the situation of trade in goods and services, China's current account will post a reasonable surplus this year, and it will remain within an equilibrium range. Thanks.

Chen Wenjun:

Thank you, Ms. Wang. Thanks to friends from the media. Today's press conference is hereby concluded. Goodbye.

In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Zhao Zhiguo, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT) and director general of the Information and Communications Management Bureau of the MIIT

Ms. Tao Qing, director general of the Bureau of Operation Monitoring and Coordination of the MIIT

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 20, 2023

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are joined by Mr. Zhao Zhiguo, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT). He will brief you on the development of industry and information technology in the first quarter of 2023, and take your questions. We're also joined by Ms. Tao Qing, director general of the Bureau of Operation Monitoring and Coordination of the MIIT.

Now, I'll give the floor to Mr. Zhao for a brief introduction.

Zhao Zhiguo:

Ladies and gentlemen, friends from the media, good afternoon. Thank you for your consistent interest in and support for the industry and information technology sector. Next, I'll brief you on the sector's development in the first quarter of this year.

Since the beginning of this year, in the face of a complex and fast-changing external environment and various difficulties, risks and challenges, the MIIT, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, has thoroughly implemented the guiding principles of the 20th CPC National Congress and earnestly put into practice the decisions and deployments made at the Central Economic Work Conference and the annual "two sessions." The MIIT has prioritized ensuring stable growth and proactively collaborated with all localities and government departments in implementing related policies to accelerate the resumption of work and production, enhance efforts to ease businesses' difficulties, and maintain stable performance of industrial sector. In general, the industry and information technology sector has started off stably this year, with a positive trend to follow.

First, the industrial sector has maintained stable operation, evidenced by three key factors. For starters, industrial production has rebounded steadily. In the first quarter of this year, the added value of China's industrial enterprises above the designated size rose by 3% year on year, a 0.3 percentage point increase from the fourth quarter of 2022, reversing the continuous downward trend in growth since last October. According to statistics from the China Association of Automobile Manufacturers (CAAM), the production and sales of automobiles in March increased by 15.3% and 9.7% year on year, respectively, and that of new energy vehicles (NEVs) in the same period surged by 44.8% and 34.8% year on year, respectively. The second aspect is that manufacturing investment kept growing steadily. In the first quarter of this year, manufacturing investment grew by 7% year on year, 1.9 percentage points higher than fixed-asset investment in the country, maintaining a comparatively fast growth rate despite the high comparison bases over the past two consecutive years. The third aspect is that the leading role of major industrial provinces has become more prominent. The industrial growth rate of major industrial provinces, including Hebei, Shandong and Jiangsu, is significantly higher than the national average. The industrial sectors of Guangdong, Zhejiang and other provinces have also seen an upturn since March.

Second, advanced manufacturing demonstrated a sound growth momentum. General Secretary Xi Jinping stressed that we must firmly pursue high-quality development as our primary task. Premier Li Qiang's first research trip outside Beijing also focused on the development of advanced manufacturing, which sent a clear message of China's resolve to vigorously develop the sector. We have made every effort to boost advanced manufacturing and ensure that manufacturing becomes higher-end, more intelligent and more eco-friendly. We have carried out industrial foundation reengineering projects and research projects on major technologies and equipment. Major progress has been made in some sectors. For example, the ARJ21 aircraft have transported over 6.55 million passengers and have recently been put into commercial operations overseas. The world's largest container vessel, with a capacity of 24,188 TEUs, has been deployed for service in China. The country also successfully developed its first homegrown extracorporeal membrane oxygenation (ECMO) device and granted approval for it. We also implemented projects for intelligent manufacturing and promoted the digital transformation of industry. The three major functional systems of the industrial internet, namely those concerning networks, platforms and security, have been established, and the scale of the core industry has surpassed 1.2 trillion yuan ($170 billion). We also expedited our efforts to guide the transformation of industry toward eco-friendly and low-carbon development. We accelerated efforts to develop emerging industries such as the NEV and photovoltaic sectors. In the first quarter of this year, fixed-asset investment in the high-tech manufacturing industry increased by 15.2% year on year, and the production of emerging products such as NEVs and solar cells surged by 22.5% and 53.2% year on year, respectively.

Third, the empowering role of the information and telecommunications sector has continued to grow. We have spared no effort to develop new types of infrastructure and ensure it effectively supports high-quality socioeconomic development. In the first quarter of this year, the business revenue of China's telecom industry increased by 7.7% year on year. We worked to promote the construction of the "dual gigabit" internet in a steady manner. Over 2.64 million 5G base stations have been built, and the number of gigabit internet users has exceeded the 100 million mark. We continued to promote the integration of internet applications into industrial sectors, with 5G technology fully applied in 52 major sectors of the national economy. We improved the capacity of applications and services and further enhanced the supply of mobile internet applications and services. We accelerated the promotion of demonstration cases for elderly-friendly and barrier-free internet applications across the country. We also coordinated development and security by rolling out policies that bolster the development of industries concerning data security, strengthening the protection of key information infrastructure, and ensuring the safe and stable operation of basic telecommunications networks.

Fourth, the environment for industrial development was further improved. We adhere to an approach characterized by an efficient market and a well-functioning government, aiming to create an ecosystem conducive to industrial development. We thoroughly implemented the development plan for the industrial and information technology sector during the 14th Five-Year Plan period, and organized efforts to formulate work plans for stabilizing growth in major sectors such as automobiles and electronics. Regarding the pressing difficulties and problems facing small- and medium-sized enterprises (SMEs), the MIIT worked with related government departments and rolled out a series of policy measures to help businesses stabilize growth, adjust their structures, and strengthen their capacities. The MIIT also launched the fifth round of work to develop "little giant" enterprises with high growth potential, advanced technology and strong market competitive edge. It also convened this year's working session for the State Council's inter-ministerial joint meeting on reducing business burdens. The MIIT made efforts to precisely align industries with financial resources, and the national platform in this regard has helped enterprises raise more than 500 billion yuan in total.

Of course, we need to be aware of the current difficulties and challenges facing the development of the industrial sector. However, the fundamentals underpinning the long-term robust growth of China's industrial sector remain unchanged, and we maintain our confidence in it. Looking forward, the MIIT will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and earnestly implement the decisions and deployments made by the CPC Central Committee and the State Council. The MIIT will act with firm confidence, push for innovation, stabilize the development of major sectors, and support the growth of leading enterprises and enterprises with high growth potential, advanced technology and strong market competitive edge. The MIIT will work to boost existing strengths, develop new advantages, and shore up weak links in a bid to ensure the sustained upturn of the industrial sector and accelerated growth of the information and telecom industry in the second quarter. This will lay a solid foundation for the accomplishment of the annual targets and tasks.

That concludes my introduction. Next, my colleague and I will take your questions.

Shou Xiaoli:

Thank you, Mr. Zhao. The floor is now open for questions. Please identify the media organization you work for before asking your questions.

China Media Group:

Since the beginning of this year, the industrial economy has rebounded at a faster pace and the PMI has stayed in expansionary territory for three consecutive months. How would you evaluate the performance of the industrial economy at present? Moreover, what measures will be taken to promote the steady growth of the industrial economy? Thank you.

Zhao Zhiguo:

Thank you for your questions. In the first quarter, China's value added of industrial enterprises above the designated size grew by 3% year on year, up a 0.3 percentage point from the fourth quarter of 2022. Overall, it has stabilized and rallied. In terms of industries, the outputs of the general equipment, automobile, and chemical fiber industries have increased year on year after declining year on year in the previous two months. Meanwhile, the outputs of the non-ferrous metals, building materials, electrical machinery, and special equipment industries grew more rapidly over the last two months. In terms of regions, the production in the eastern and northeastern regions has continued to recover. Among the top 10 provinces regarding value added, six provinces posted higher growth than the national level in the first quarter. Guangdong and Zhejiang have demonstrated sound recovery momentum, with positive growth in the first quarter. In terms of key products, the production of crude steel, generator sets, and refrigerators increased by 6.1%, 7.5%, and 8.4% year on year, respectively. Moreover, plastic products, bags and suitcases, general-purpose machinery, and automobiles still have advantages in exporting, with a double-digit increase year on year.

Next, we will focus on the following work.

First, we will foster a sound development environment for industries. We will fully implement policies and measures to keep growth stable, formulate and implement work plans to ensure steady growth in key sectors and continue to provide stronger policy support. We will coordinate between the MIIT and governments at provincial levels and foster collaboration among departments solidly and meticulously. We will support major industrial provinces to serve as the strong pillar of the industrial economy. We will give full play to the principal role of enterprises and provide strong support for developing leading enterprises and specialized and sophisticated enterprises that produce new and unique products to foster synergy in maintaining the steady growth of the industrial economy.

Second, we will work to steadily increase both the volume and quality of exports. The momentum in the export of advantageous products will be consolidated. We will offer more support to foreign trade firms in the manufacturing sector and provide good services for key foreign-invested enterprises and projects in the manufacturing sector. We will cooperate with relevant departments to implement policies and measures to ensure steady growth in foreign trade and make efforts to stabilize the export of industrial products.

Third, we will promote the recovery of domestic demand at a faster pace. We will act to increase the variety, raise the quality, and build brands of consumer goods and raw materials. Campaigns will be launched to promote new energy vehicles, smart appliances, and green building materials in rural areas. We will foster the local specialty food industry. With all these efforts, we will promote consumption through high-quality supply. We will make extensive efforts to advance major projects in the industry and information sector set out in the 14th Five-Year Plan. The plan to guide technology transformation and upgrading of industrial enterprises will be implemented. We will guide financial institutions to increase the supply of medium- and long-term loans to the manufacturing industry and actively expand effective investment.

Fourth, we will continue to create a strong impetus for growth. We will accelerate the innovative development of strategic emerging industries such as 5G, artificial intelligence, biological manufacturing, and intelligent connected vehicles and make a big push to develop advanced manufacturing to create new engines of growth. We will promote the development of the digital economy to foster new growth drivers for the economy. We will fully and meticulously implement measures to support stable growth, structural adjustments and capacity enhancement in SMEs. We will continue to improve services for enterprises, boost their confidence, and nurture a batch of SMEs into specialized and sophisticated enterprises that produce new and unique products.

We believe that advancing key projects under the 14th Five-Year Plan, implementing the strategic plan for boosting domestic demand, and introducing policies and initiatives to keep foreign trade stable will provide strong support for the sustained recovery of the industrial economy. With the effective release of the vitality of market entities, the potential of consumer consumption, and the impetus for industrial upgrading, China's industrial economy in the second quarter will further improve and lay a sound foundation for fulfilling our tasks and goals for the year. Thank you.

Yicai:

At the Central Economic Work Conference at the end of last year, it was proposed that China would work on boosting domestic demand. In the government work report delivered during the two sessions this year, it is emphasized again that we will take solid steps to implement the strategy of expanding domestic demand. What measures will the MIIT take to further promote automobile consumption and boost domestic demand? Thank you.

Tao Qing:

Thank you for your question. In accordance with the decisions and plans of the CPC Central Committee and the State Council, the MIIT has actively worked with relevant departments to analyze the development of the automobile industry and develop policies and measures to further promote automobile consumption. We have continued to unlock the consumption potential and create multiple application scenarios to advance the high-quality development of the automobile industry. In 2022, we worked with relevant departments to launch preferential policies such as reducing the purchase tax of eligible passenger vehicles, promoting spending on new energy vehicles in rural areas, and guiding local governments to adopt measures to promote consumption, including increasing the quota of vehicle license plates for cities that have restrictions on car purchases and offering subsidies for purchasing vehicles. By taking all these measures, we have advanced steady growth in China's automobile industry, with production volume and sales up 3.4% and 2.1%, respectively, significantly contributing to the recovery of the macroeconomy. Since the beginning of 2023, new energy vehicles still maintain relatively rapid growth despite the current sluggish automobile market. From January to March, China produced 1.65 million and sold 1.586 million new energy vehicles, with a year-on-year increase of 27.7% and 26.2%, respectively.

Next, acting upon the decisions and plans of the CPC Central Committee and the State Council, the MIIT will further unleash the potential of consumer demand, energize the consumer market, and stabilize spending on automobiles and other big-ticket items. We will work with relevant departments to introduce policies and initiatives to maintain stable automobile consumption and expand domestic demand and ensure the implementation of current policies and initiatives. We will improve the "double credits" management provision for corporate average fuel consumption and new-energy vehicles. We will also launch pilot programs in establishing pioneering zones for comprehensive electrification of vehicles in public areas in cities. At the same time, we will guide local governments to uphold the principle of fairness and justice when making pro-consumption policies, as well as safeguard the market order for fair competition to continue improving the overall competitiveness and development quality of China's automobile industry. Thank you!

Zhonghongwang.com:

The high-quality development of the ICT industry has effectively generated vigor for the development of the digital economy. We have seen that the ICT industry achieved relatively rapid growth in the first quarter. What are the specific highlights and achievements? Thank you.

Zhao Zhiguo:

Thank you for your question. In the first quarter, we thoroughly implemented the decisions and plans of the CPC Central Committee and the State Council, adhered to the general principle of pursuing progress while ensuring stability, and pushed the high-quality development of the ICT industry to new heights.

First, the momentum is strong and steady progress has been made in the development of the industry. Emerging businesses have developed rapidly, with the revenue of businesses such as internet data centers, cloud computing, and the Internet of Things increasing by 24.5% year on year, driving the growth of telecommunications services revenue by 4.8 percentage points and gradually becoming a new growth driver for the ICT industry. Telecommunications services revenue grew steadily, with total revenue reaching 425.2 billion yuan in the first quarter, up 7.7% year on year. Furthermore, the total business volume of telecommunications services increased by 18% year on year. The overall performance of the ICT industry has demonstrated sound momentum.

Second, the foundation is more solid and cyber capacity continues to be enhanced. Network infrastructure has been improved. As of the end of March, more than 2.64 million 5G base stations have been built and over 17.93 million network ports can provide gigabit network services, meaning that "the gigabit optical network covers every city" and "every county can access 5G services." A supply system of computing power with gradient optimization has been primarily established. The total computing power has developed rapidly. China's total computing power scale now ranks second globally, with an annual growth rate of nearly 30%. The development of IPv6 has been advanced. IPv6 has developed from being usable to being able to provide good services. The data traffic of IPv6 surpassed IPv4 for the first time, accounting for over 50% of mobile network traffic, bringing in an era of the internet predominated by IPv6-based networks.

Third, the application is wider and access to high-speed businesses has been accelerated. The scale of connection has continued to increase. As of the end of March, the number of 5G mobile phone users has reached 620 million and the number of gigabit optical networks users has surpassed 100 million. The number of mobile Internet of Things users totals 1.984 billion, with 53.8% of "things" connected to the mobile internet. The foundation for the development of a world where all things are connected has been consolidated. Integrated applications have been advanced and 5G has been applied in 52 national economic categories. There have been over 50,000 cases of applying "dual-gigabit" infrastructure nationwide, featuring a 5G network and a gigabit optical network. And the mobile Internet of Things has been applied on a large scale in the construction of digital cities, smart transportation, mobile payments, and other areas.

Fourth, the experience and accessibility of convenient user services have been improved. Universal telecommunications services have been further promoted. Internet coverage in rural and remote areas has continued to be improved. The application of the 5G network in rural areas has been advanced. All these have provided strong support for the rural revitalization strategy. The sense of gains for users has been improved. In the first quarter, the download rates of mobile and fixed broadband networks have increased by 59.9% and 15.1% year on year, respectively. Rates for mobile internet services have dropped. Capacities for information accessibility have been enhanced. Progress has been made in improving internet applications for the convenience of senior citizens. We have also guided the promotion of a variety of excellent cases of improvements to mainstream websites and mobile phone apps nationwide.

Going forward, we will prioritize working in the following three areas to promote the development of the ICT sector and provide solid support for advancing high-quality economic and social development.

First, we will consolidate the development of digital infrastructure. We will introduce policies and initiatives to advance the coordinated development of the building of new information infrastructure, advance the infrastructure construction of broadband access services in border regions, expand the coverage of gigabit optical networks, promote cloud-network integration to strengthen information infrastructure in small- and medium-sized cities and advance the high-quality development of the mobile IoT. With all these efforts, we will advance the construction of new information infrastructure in an integrated way. 

Second, we will accelerate technological and industrial innovation. We will promote breakthroughs in core technologies in key fields, including 6G, optical communications, and quantum communications, and research frontier technologies such as artificial intelligence, blockchain and digital twins. We will break through the bottleneck of core technologies in key fields to enhance resilience and security in industrial and supply chains.

Third, we will promote integrated applications across sectors. We will advance integrated applications of new-generation ICT such as 5G and gigabit optical networks in vertical industries, information consumption and areas that are important to people's lives and promote the large-scale application of the industrial internet. We will develop a demonstration model for innovative applications in key areas. By doing so, we will contribute to the digitalization of industries. Thank you.

People's Posts and Telecommunications News:

This year is the last year to implement the three-year action plan (2021-2023) for the innovative development of the industrial internet. According to the plan, leapfrog progress will be made in the overall development of the industrial internet during the three years. What will you focus on this year to achieve this goal? Thank you.

Zhao Zhiguo:

Thank you for your question. The industrial internet is the strategic infrastructure for a new type of industrialization. It also serves as a crucial base for the in-depth integration of the digital and real economy. Since implementing the action plan over two years ago, we have adopted a moderately proactive approach and completed the infrastructure building. The analysis system for industrial internet identification has covered 31 provinces (autonomous regions, municipalities) and 40 sectors, providing services for over 250,000 enterprises. A multi-layered system consisting of comprehensive, featured, and professional industrial internet platforms has been developed. The amount of equipment connected to key platforms now exceeds 81 million. We have adopted a demand-oriented approach and further promoted integrated applications. The industrial internet has been applied to 45 national economic categories and 166 subcategories, covering over 85% of industrial categories. In the first quarter, we launched 218 industrial internet demonstration projects, including 5G factories, industrial internet parks, and public service platforms. We also created a batch of application models for factories and industrial parks in understanding and applying the industrial internet and enabling them to carry out the transformation with guts and knowledge so as to speed up digital transformation. Currently, the total output value of the core industry has surpassed 1.2 trillion yuan, increasing by 15.5% year on year.

Next, we will focus on large-scale application and high-quality development and prioritize three aspects: policies, technologies and applications. We will guide all regions and sectors to make greater efforts towards leapfrog development of the industrial internet, thus providing stronger support for advancing a new type of industrialization.

First, we will fully play the leading role of policies and strengthen institutional guarantees. We will formulate guidelines on the high-quality development of the industrial internet and advance the application of the "5G Plus Industrial Internet" in terms of industrial supply, in-depth application, and industrial cluster development to improve the top-level design. We will deepen the cooperation between industry and finance and the integration between industry and education, direct more investment from different types of capital, and cultivate high-level, versatile, and skilled talents to further create a sound development environment.

Second, we will pursue innovation-driven development and strive to make technological breakthroughs. We will launch a new round of innovative projects for industrial internet development, promote breakthroughs in core technologies in key fields of the industrial internet and their industrialization, break the bottleneck in technologies for large-scale application, and enhance the security capacity of the industrial internet. We will make and implement a batch of standards for emergency use and promote large-scale application with standardization. We will foster more diversified, high-quality and professional solutions to further enhance the supply capabilities of the industrial internet.

Third, we will advance coordination between industrial and supply chains and the industrial internet and move faster to promote large-scale use of industrial internet applications. We will actively promote close coordination between industrial and supply chains and the industrial internet. Focusing on key sectors, we will formulate guidelines on the integrated application of the industrial internet in key sectors such as electronic information and engineering machinery; moreover, we will advance the action to promote the application of the industrial internet identification to promote the wide application of the industrial internet in key industrial chains. By concentrating on key enterprises, we will give full play to the principal role of leading enterprises in bringing upstream and downstream enterprises, especially SMEs, to be integrated into the industrial internet. Focusing on key regions, we will launch the campaign to promote the application of the industrial internet in 1,000 industrial parks in 100 cities to advance the application of industrial internet in industrial parks and clusters of industries at a faster pace and bring about the emergence of more good cases for the large-scale application of the industrial internet. Thank you!

21st Century Business Herald:

In the first quarter of this year, the MIIT issued the list of SME industrial clusters with local features in 2022, drawing wide attention from all sectors of society. Can you talk about the progress related to this work? What follow-up measures will be taken to advance the recognition and cultivation of SME industrial clusters with local features? Thank you.

Tao Qing:

Thank you for your questions. SME industrial clusters with local features are located within counties. These clusters, characterized by their focus on leading industries with SMEs playing a dominant role, have distinctive advantages and features and core competitiveness. The MIIT has focused on six aspects, including improving the advantages of leading industries, advancing digital transformation, accelerating green and low-carbon development, deepening openness and cooperation, and enhancing governance and services, to foster clusters of industries. We have made clusters a fertile ground for developing SMEs into specialized and sophisticated enterprises that produce new and unique products, a carrier for promoting the regional economy, and a focal point for ensuring security and stability in industrial and supply chains. 

The first batch of 100 SME industrial clusters with local features has remarkable effects in the following four aspects. First, the clusters bring together a significant number of quality SMEs. Hosting more than 280,000 SMEs, the clusters register a total output of over 1.8 trillion yuan. Among them, there are 55 manufacturing individual champions, 294 specialized and sophisticated "little giant" companies, 1,487 specialized and sophisticated SMEs that produce new and unique products, and around 5,000 innovative SMEs. Over 20% of the enterprises in the clusters are quality SMEs. Second, the clusters have significantly strengthened and upgraded weak links in industrial and supply chains. The clusters have developed high-level and professional supporting capacity in key links in industrial and supply chains of major industries, such as high-performance materials, smart chips, precision instruments, propulsion systems for new energy vehicles, and industrial robots. Third, we have seen their initial effects on propelling local economic growth. The leading industries in these clusters, which are all local pillar industries, contribute 87% of the clusters' output and play a crucial role in advancing the high-quality development of county economies. Fourth, the governance and service system for these clusters continues to improve. Over 70% of the clusters have enjoyed services provided by national public service demonstration platforms for SMEs. Nearly 90% of the clusters have established mechanisms for promoting the development of industries. Over 90% of the clusters have built mechanisms for protecting SMEs' legitimate rights and interests. A cluster governance model featuring extensive consultation, shared benefits, joint construction, and joint governance has emerged.

We plan to foster another 100 SME clusters for distinctive local businesses nationwide this year. We will fully implement the guiding principles of the 20th CPC National Congress and the plans made at the Central Economic Work Conference and the Two Sessions, and further advance the work on SME clusters for distinctive local businesses. First, we will guide the clusters to develop leading industries and strengthen the core competitiveness of SMEs. We will enhance the vitality of county economies and improve the resilience of industrial and supply chains and the supporting capacity at key links. Second, we will provide guidance and evaluation for the development of clusters. We will carry out publicity for cases of excellent clusters, promote typical experiences, and step up quality management of clusters that have been recognized to ensure that solid progress will be made in the development of clusters. Third, we will launch research and introduce policies and measures to promote the development of clusters. We will enhance policy guidance and resource coordination, build a hierarchical system for cultivating clusters, and guide and support local governments in cultivating a batch of clusters at the provincial level. Thank you.

China Electronics News:

Recently, the MIIT hosted the first National Industry and Finance Cooperation Conference, building a bridge of communication and collaboration between the industrial and financial sectors. Could you please elaborate on that? Going forward, what measures will the MIIT take to advance new industrialization and boost China's strength in manufacturing and cyberspace at a faster pace? Thank you!

Zhao Zhiguo:

Thank you for your questions. The CPC Central Committee and the State Council have attached great importance to giving full play to the role of finance in supporting the real economy, especially the manufacturing industry. The MIIT, together with finance, financial regulation, and other departments, has actively implemented the decisions and plans of the CPC Central Committee and the State Council, taken innovative steps to advance industry and finance cooperation, and introduced a series of policies and measures to give financial support to the real economy.

We have carried out innovative practices of industry-finance cooperation in 51 pilot cities nationwide and continue to optimize the environment for financing and industry-finance cooperation. We have established strategic cooperation with 21 financial institutions, focusing on supporting the advanced manufacturing industry and serving the real economy. We have set up the national industry-finance cooperation platform, hosting nearly 190,000 quality enterprises in the industry and information sector and over 1,500 financial and investment institutions, and helping enterprises obtain 513.62 billion yuan in financing. As a major channel, the platform supports the application of re-lending facilities to support technological innovation. It has supported over 4,100 national demonstration enterprises for technological innovation, manufacturing individual champions, and specialized and sophisticated SMEs that produce new and unique products, with financing of over 270 billion yuan. Meanwhile, to promote the virtuous cycle of science and technology, industry, and finance, we have worked with financial and investment institutions to launch special pilot projects for the integration of science and technology, industry, and finance, and jointly explore the whole-chain service system for the commercialization and application of scientific and technological advances.

According to the report to the 20th CPC National Congress, by 2035, we will basically achieve new industrialization. The report emphasizes that we must continue to focus on the real economy in pursuing economic growth and that we will advance new industrialization and move faster to boost China's strength in manufacturing and cyberspace. The new industrialization is the industrialization of high-end, smart, and green production. It is the industrialization of collaborative innovation among small, medium, and large enterprises and the simultaneous development of the "four modernizations." It is also the industrialization of in-depth integration of digital and real economy, creating huge development opportunities for industry-finance cooperation.

Next, together with relevant departments, the MIIT will continue to deepen industry-finance cooperation and jointly advance new industrialization through consistent efforts. First, we will summarize experiences and take practical actions to put the outcomes of the first National Industry and Finance Cooperation Conference into practice and advance industry-finance cooperation to deliver more solid outcomes. Second, we will explore possibilities for combining new technologies, new industries, and new business forms with finance to promote synergy between industrial development, scientific and technological innovation, and modern finance. Third, we will give full play to the role of the national industry-finance cooperation platform, shore up weak links, build up strengths, and reinforce the foundation of industrial and supply chains. We will focus on major projects, key programs, and major enterprises, advance innovation in financial products and services, and pool together financial resources to transform and upgrade traditional industries, reinforce and extend competitive industries, cultivate and develop emerging industries, and make plans for future industries in advance. Thank you.

People.com.cn:

Recently, the MIIT and other 10 departments jointly issued guidelines on fostering traditional robust food production areas and the local specialty food industry. What measures will be taken according to the guidelines to advance the high-quality development of the food industry? Thank you.

Tao Qing:

Thank you for your question.

The food industry brings profits to those who work on the land and happiness to those who eat the food. It concerns people's livelihoods and is also one of China's key industrial sectors. 

In the first quarter of this year, the food manufacturing industry has maintained steady growth, with a strong momentum for recovery. Traditional robust food production areas and local specialty foods have become crucial carriers and critical drivers for the development of the food industry. With the improvement in people's living standards, people have a stronger demand for quality, nutritious, delicious and healthy food with a unique history and culture. Fostering traditional robust food production areas and the local specialty food industry will not only better meet people's ever-growing needs for a better life but also play a significant role in promoting local economic and social development, rural revitalization, and the realization of common prosperity. 

This year, the MIIT, together with other 10 departments, has issued guidelines on fostering traditional robust food production areas and the local specialty food industry, guiding localities to make full use of their resource endowment and actively unleash the potential for industrial development to create growth drivers for the food industry. The guidelines set out development goals for traditional robust food production areas and the local specialty food industry. It plans to initially create a development pattern for local specialty food by 2025, comprising leading enterprises whose revenues surpass 10 billion yuan, clusters whose revenues exceed 100 billion yuan, and industries whose revenues are above 1 trillion yuan. Specifically, we will foster more than five traditional robust food production areas with revenues over 100 billion yuan, 25 leading enterprises with revenues above 10 billion yuan, and a group of famous local specialty food brands nationwide and typical cases of industrialization of local specialty food.

Going forward, the MIIT will work with relevant departments to make concerted efforts throughout the industrial chains of the food industry to advance the high-quality development of the local specialty food industry. First, we will speed up the construction of large-scale crop and livestock bases for quality agricultural products to ensure a stable and reliable supply of production materials for local specialty foods. Second, we will improve techniques, technologies, and equipment to ensure product quality while raising production and processing efficiency. Third, we will promote the development of clusters of specialty industries and enhance coordination throughout industrial chains to promote small, medium, and large enterprises to pursue development through greater synergy. Fourth, we will improve the inheritance of local traditional food culture and processing techniques to improve product brand awareness and influence while maintaining local specialty food's original taste and flavor. Thank you.

Bauhinia Magazine:

In recent years, the integrated application of ICT has deepened and injected new impetus into high-quality economic and social development. What specific roles has it played? And what are the considerations for follow-up work? Thank you.

Zhao Zhiguo:

Thanks for your questions. The ICT sector is the strategic, fundamental, and pioneering sector to support economic and social development. Over the years, with the full implementation of the national cyber development strategy and the Digital China strategy, we have seen a significant improvement in the quality of ICT services. The integration of ICT into areas related to the national economy and social development has continued to be advanced. It mainly has three features.  

First, the integrated application of ICT has empowered the real economy at a deeper level. The new generation of information technology, such as 5G, has been deeply integrated into key areas of the real economy, including manufacturing, transportation, and tourism. Recently, the MIIT has worked with the Ministry of Culture and Tourism to introduce policies and documents concerning 5G smart tourism, actively expanding the new space for tourism development. 5G technology and artificial intelligence have been quickly applied to core production links. Construction of 5G-connected factories has been accelerated, bringing about profound changes in the production mode and pattern in the manufacturing sector.

Second, the integrated application of ICT has contributed to the construction of a digital society at a higher level. The application of smart medical care has been promoted at a faster pace. Over 80% of the pilot programs for 5G enabled healthcare services have been covered by 5G networks. Initial results were delivered in the development of smart education. The application of 5G technology in scenarios such as interactive online teaching and vocational training has continued to be deepened. Steady progress has been made in the construction of digital villages. Recently, we have worked with multiple departments to issue policies and documents, quickly advancing rural construction, governance and industrial development through digitalization. The digital government governance service efficacy has been significantly improved. 

Third, the integrated application of ICT has improved people's lives in more areas. Mobile internet applications have thrived, reaching 2.61 million. That is to say, we use such apps in study, work, and life and their number has amounted to 2.61 million, greatly facilitating people's lives. We have launched campaigns to promote information consumption in districts and counties to contribute to rural revitalization, built platforms for exchanges and interaction between urban and rural areas, and helped farmers to increase their income. Digital technologies have been adapted for the convenience of senior citizens and have met the most prominent and pressing needs of senior groups aged 60 and above for digital life. The online retail sales in the first quarter nationwide stood at 3.3 trillion yuan, up 8.6% year on year. 

This year marks the last year for carrying out several three-year action plans, such as the coordinated development of "Double Gigabit" networks, the comprehensive and coordinated development of 5G technologies, and the development of new types of data centers. Next, after completing the missions, we will make good use of integrated applications to continue to create growth divers for industries.

First, we will improve the supply of new technologies and products to create a strong engine for empowerment through integrated applications. We will carry out the action of empowering through enhanced computing infrastructure and promote the cloud-edge-terminal collaboration and integration of computing, storage, and operation. We will focus on 5G, integrated circuits and other key areas, and improve the supply of basic software, hardware, and core electronic components. We will strengthen the generic technology R&D and industrialized and coordinated development of artificial intelligence. 

Second, we will strengthen application guidance in key sectors and areas to set up the primary platform for empowerment through integrated applications. We will carry out the projects for the large-scale application of 5G technologies and guide the release of the guidelines for developing the 5G sector to push forward its application in industries. We will guide national pilot zones for innovative AI applications to offer open access to typical application scenarios to promote the upgrading of technologies and products.

Third, we will promote small, medium, and large enterprises to pursue development through greater synergy to forge the principal force for empowerment through integrated applications. We will cultivate a group of leading enterprises in industrial chains, specialized enterprises that use sophisticated technologies to produce new and unique products as well as champion companies in the manufacturing industry segments, and develop a hierarchical development pattern. We will encourage large enterprises to build digital platforms and share data resources and capacities with SMEs to lower the thresholds for the transformation of SMEs. Thank you!

Shou Xiaoli:

The last two questions, please.

CCTV.com:

Recently, China and France signed a cooperation agreement, setting the record for the largest single order by value that Chinese shipbuilders have ever received. How did the shipbuilding industry perform in the first quarter of this year? Thank you.

Tao Qing:

Thank you for your question. In the first quarter of 2023, the shipbuilding industry has rebounded. While registering stable performance, the industry also has demonstrated good momentum for growth, made steady progress and improved quality. According to statistics, in the first three months, the completed volume of shipbuilding in China reached 9.17 million deadweight tons (DWT). New shipbuilding orders amounted to 15.18 million DWT, increasing by 53% year on year. At the end of March, the volume of holding orders stood at 11.452 billion DWT, up 15.6% year on year.

First, the industry registered stable performance with good momentum for growth. From January to March, China's completed volume and new and holding orders of shipbuilding in deadweight tonnage accounted for 43.5%, 62.9% and 50.8% of the global market share, ranking first in the world. China's shipbuilding industry led the world in terms of orders for 10 out of 18 mainstream ship types in 2021.

Second, the industry has made steady progress while ensuring stability. Breakthroughs have been made in high-end ships. As of the end of March, all six container ships with a TEU (20-foot equivalent unit) capacity of 24,000 delivered globally were built at Chinese shipyards. China's shipbuilding companies seized the favorable opportunity when the car carrier market rebounded, and took all 24 orders globally for building car carriers in the first quarter of this year. Additionally, smooth progress has been made in building China's first self-developed large cruise ship, with over 91% of construction completed. Its equipment tuning work is well underway and interior installations are nearing completion. The cruise ship is expected to be delivered at the end of 2023.

Third, the industry has improved quality while ensuring stability. The quality of shipbuilding orders has been significantly enhanced and green development has been accelerated. From January to March, the structure of new shipbuilding orders received has been optimized, with CGT/DWT ratio standing at 0.485, marking the best level in history. Since the beginning of 2022, the orders of green-energy-powered ships have taken up 50% of new shipbuilding orders. As you mentioned, a series of deals concerning the construction of green and low-carbon large container ships were inked between China State Shipbuilding Corp and French shipping group CMA CGM, comprising 12 dual-fuel methanol-powered container ships with a capacity of 15,000 TEUs and four 23,000 TEUs dual-fuel liquefied natural gas (LNG) powered ones, worth more than 21 billion yuan in total.

On the whole, playing an increasingly greater and more influential role in global industrial and supply chains, China's shipbuilding industry will also be advanced from a new and higher starting point. Thank you.

Voice of China, China Media Group:

We noticed that the MIIT recently issued a notice on further improving the service capacity of mobile internet applications, aiming to optimize the services and enhance user experience. What progress has the MIIT made in promoting ICT for people's livelihoods this year? What's the next plan? Thank you.

Zhao Zhiguo:

Thank you for your questions. ICT services concern the vital interests and personal experiences of the public. The MIIT has embraced a people-centered development philosophy and taken practical measures to enhance people's livelihoods. In the first quarter of this year, we have improved institutions and regulations. We issued notices about further improving the service capacity of mobile internet applications and introduced a range of standards, including evaluation standards, to protect the rights and interests of app users. We have set up a complaint-handling center for radio frequency interference and further improved our service systems. We have also expanded the range of service applications available to users. The average speed of mobile networks has been on the rise. Applications such as livestreaming and online tourism have thrived. The number of active apps reached 2.61 million. The mobile internet has been deeply integrated into people's production, life, studies and work, providing quality services with quick accessibility. We have improved digital services to bring more benefits to people. We have continued to carry out activities with themes such as "Do Practical Things for the People," "Heartfelt and Dedicated Services," and "Service Hubs." We selected and promoted a batch of excellent cases of improving services in frequently encountered scenarios for the convenience of senior citizens to provide more considerate and heartwarming digital services. We have addressed key issues and conducted tests on the technologies of 50,000 apps. Moreover, we have brought attention to the violations of regulations committed by 101 apps and SDKs, with a specific emphasis on addressing concerns related to unwanted redirection or "shake-to-open" advertisements, in order to purify the service environment.

Next, we will give priority to the work in the following aspects.

First, we will improve the service system to create a sound environment. We will prioritize the improvement of the sector's conduct, rectify any misconduct, and expedite the development of a comprehensive modern service system. We will work to ensure that documents already issued are fully implemented, refine policies and measures, and make detailed standards and regulations to guide mobile internet applications to improve service quality throughout the process. We will accelerate the development of the public services platform for mobile internet applications and enhance technological capacities for monitoring and testing, risk warning, origin-tracing and authentication. We will improve mechanisms for industry self-regulation, coordinated services, evaluation and oversight to create a sound environment encouraging the pursuit of excellence and mutual reinforcement.

Second, we will provide enhanced services to improve user experience. We will accelerate the development of 5G and 1000M fiber optic networks, advance universal telecom services, and further expand internet coverage in both breadth and depth. We will promote the application of technologies and innovation in models and continue to expand service areas and scenarios. We will upgrade the functions of internet applications specially designed for the convenience of senior citizens, ensuring that services are more convenient and accessible to them. We will advance online and cross-regional handling of telecom services, improve customer services via video communication, and simplify the variety and quantity of plans to enable people to have easy access to and worry-free use of services and continue to improve their sense of gain and satisfaction.  

Third, we will strengthen comprehensive governance to protect users' rights and interests. We will focus on the pressing difficulties and issues that concern the public most and work to resolve acute problems. We will strengthen app governance throughout all stages and regulate service behavior such as software installation and uninstallation, automatic renewals, and pop-up windows. Spamming activities will be curbed on a regular basis. We will collaborate with relevant departments to strengthen prevention at the source and promote call blocking anti-harassment services. We will strengthen the integrated technical prevention of telecom and internet fraud. The "card cutting campaign" targeting fraudulent schemes involving SIM cards and IOT cards will be advanced. We will step up efforts to advance the application of the 12381 SMS platform for early warning of fraud and promote a service that enables citizens to inquire about all mobile phone cards registered under their own ID numbers. With all these efforts, we will take practical steps to safeguard property security and the legitimate rights and interests of the people. Thank you!

Shou Xiaoli:

Thanks to all the speakers and the media participants for your valuable contributions. Today's briefing is now concluded. Goodbye!

Translated and edited by Zhu Bochen, Xu Kailin, Yuan Fang, Yang Xi, Zhang Junmian, Zhou Jing, Wang Wei, Wang Yiming, Liu Sitong, He Shan, Li Huiru, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Wang Jiayi, vice minister of education and vice president of the Organising Committee of the Chengdu 2021 FISU World University Games

Mr. Zhou Jinqiang, vice minister of the General Administration of Sport of China and vice president of the Organising Committee of the Chengdu 2021 FISU World University Games

Ms. Zheng Bei, vice governor of the People's Government of Sichuan Province and vice president of the Organising Committee of the Chengdu 2021 FISU World University Games

Mr. Wang Fengchao, mayor of Chengdu Municipal People's Government, and vice president and secretary-general of the Organising Committee of the Chengdu 2021 FISU World University Games

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 19, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. In 100 days, the 31st International University Sports Federation (FISU) Summer World University Games will be held in Chengdu, Sichuan province. For today's press conference, we have invited four vice presidents of its organizing committee to meet with you, introduce preparations for the games, and answer your questions. The four vice presidents are Mr. Wang Jiayi, vice minister of education; Mr. Zhou Jinqiang, vice minister of the General Administration of Sport of China; Ms. Zheng Bei, vice governor of Sichuan province; and Mr. Wang Fengchao, mayor of Chengdu city.

Now, I will give the floor to Mr. Wang Jiayi.

Wang Jiayi:

Good morning, friends from the media. It's a pleasure to meet with all of you today, 100 days before the opening of the 31st FISU Summer World University Games. On behalf of its organizing committee and the Ministry of Education, I would like to express our sincere gratitude for your long-term care, support and help.

The Chengdu 2021 FISU World University Games (Universiade) will be the first large-scale international sporting event held in an open manner in China since the outbreak of the COVID-19 pandemic. It bears the concern and trust of the Central Committee of the Communist Party of China (CPC) and the State Council and has garnered high attention from both domestic and international communities. The event serves as an important international sports competition and cultural celebration, as well as an important platform for promoting exchanges and integration among young university students around the world. I would now like to briefly introduce the three main reasons why this Universiade is of such significance.

First, this is a hard-earned Universiade. Since winning the bid to host the event in December 2018, Sichuan province and Chengdu city have put in a huge amount of hard work. Particularly over the past three years, the COVID-19 pandemic has had a profound impact on the global economy and society, forcing the Chengdu Universiade to be postponed twice. Nevertheless, we have remained steadfast in our solemn commitment to the FISU and the world's young university students. We have invested significant manpower, as well as material and financial resources, adapted to the changing circumstances, overcome challenges and obstacles, and made every effort to prepare for the Universiade.

Second, this is a Universiade of great significance. Sport embodies the aspirations of nations and peoples for strength and prosperity, and young people are the hope for the future of nations and peoples. The Chengdu Universiade will create a platform for fair competition, communication and exchanges, enhancing understanding and developing friendship among young university students and sports professionals from all over the world. It will undoubtedly contribute to promoting cultural exchanges and mutual learning between civilizations, advancing the building of a global community with a shared future, and creating a better future for the world.

Third, this is a Universiade destined to be truly spectacular. After four years of preparations, Chengdu has built exceptional venues and facilities, cultivated a rigorous and professional team to organize the games, and planned a variety of educational, cultural and sporting exchange activities. I believe that young university students from all over the world will not only have the opportunity to realize their personal sporting dreams here, but also have the opportunity to experience the international flair of charming Chengdu, the unique glamor of Sichuan, and Chinese culture. They will have a distinct and wonderful experience there, taking Chengdu as a window to get closer to China, understand China and comprehend China.

At the just-concluded spring meeting of delegation heads for the Chengdu Universiade, the FISU, as well as delegation heads from various countries, highly praised the preparations for the Chengdu Universiade. Let us all look forward to Chengdu delivering a "simple, safe and splendid" Universiade to the world.

Finally, we welcome friends from the media to continue to follow and participate in promoting the Chengdu Universiade.

Not long ago, I visited the news center of the Universiade, and it has been beautifully built. It is world-class and among the best of its kind globally. I welcome everyone to visit and cover the games from there. Thank you, everyone.

Chen Wenjun:

Thank you, Mr. Wang. Now, let's welcome Mr. Zhou Jinqiang for his brief introduction.

Zhou Jinqiang:

Friends from the media, good morning. We are now just 100 days away from the opening of the Chengdu Universiade, and preparations have entered the final stage. Competition organization is key to the success of the event, and is currently the primary focus of our preparations. Thanks to the efforts made in the early stages, phased tasks for the competition organization work for the Chengdu Universiade have been smoothly completed. Now, I would like to update you on the competition organization work.

First, the competition organization team has been assembled and established.

The Ministry of Education and the General Administration of Sport have jointly put together a team of core personnel to carry out the competition organization work for the Chengdu Universiade. They are responsible for providing professional guidance and technical supervision in terms of venue equipment, facilities, registration and scheduling. This March, we convened a special meeting on the competition organization work in Beijing. At the end of this month, we will hold another meeting to clarify the competition organization team's work requirements, review the competition organization's progress and the coordination with venue teams for each project, and ensure that the universal competition policy is implemented at the venue level. Furthermore, we have selected 1,077 domestic technical officials to work alongside international counterparts to complete the competition refereeing and organizational management tasks, among others.

Second, the in-competition organization system has been established.

The in-competition organizational system has been established, with the teams responsible for the venues serving as the backbone and the organizing committee, committees for each division, and venue teams collaborating closely and efficiently. The operation and emergency response plans for the command and coordination center have been finalized, and the center has been undergoing trial operations since March 3. Prior to the opening ceremony, we will conduct a series of test contests to get prepared for real games and improve our organizational work and command system so as to ensure smooth and efficient operation.

Third, test events are progressing in an orderly manner.

The Chengdu Universiade underwent a lengthy preparation period due to postponement. As early as 2021, we organized 17 single national games as test events to evaluate the organization and operation of the games as well as the logistical services. During these events, we identified a list of problems and continued to optimize our work. In early June, we will conduct comprehensive rehearsals and tests for the entire games' progress to ensure that the goals, standards, and needs of the games will be met during the event. We will test and check out the operation of venues, equipment, and command centers to further enhance our operational capabilities.

Fourth, registration for the games is underway.

Registration for the Chengdu Universiade is divided into four stages: intentional registration, pre-registration, group registration, and individual registration. Currently, we are in the group registration stage, and we are committed to providing excellent services to welcome young athletes from around the world to Chengdu. At the same time, we are actively working on logistical services for the delegations that have already registered for the games, providing detailed information about procedures for arrival and departure, accommodations, dining, training, and competition to ensure that those procedures proceed smoothly and on schedule.

That concludes my update on the preparations for the Chengdu Universiade. We invite the media to provide coverage and support for the event. Thank you for your attention.

Chen Wenjun:

Thank you, Mr. Zhou. We now give the floor to Ms. Zheng.

Zheng Bei:

Dear friends from the media, good morning. First of all, I'd like to express my sincere gratitude to friends from the media for attending today's press conference, as well as other people from all walks of life who are interested in Sichuan's socioeconomic development.

Since Chengdu successfully bid for the 31st FISU World University Games in 2018, we have been preparing for the event under the strong leadership from the CPC Central Committee and the State Council, as well as comprehensive guidance and support from the Ministry of Education, the General Administration of Sports, and relevant departments. In accordance with the requirements of "simplicity, safety, and excellence," we have mobilized all of Sichuan province's resources to prepare for the games. At present, all preparations for the games are almost complete. Now, I'd like to brief you on our progress.

First, we have established a highly efficient collaborative work mechanism. Members of the organizing committee, including the Ministry of Education and the General Administration of Sport, have designated personnel to form a special task force working on-site in Chengdu. At the provincial level, a coordination group was established with the provincial Party secretary and governor serving as co-leaders and 47 provincial-level departments fully participating in strengthening overall coordination throughout the province. The Chengdu executive committee has been adhering to a flat management structure to promote high-quality and efficient progress in all aspects of the preparation work.

Second, we have built state-of-the-art competition venues. A total of 49 venues for the games were already put into operation in 2021. This year, these stadiums have once again undergone multiple tests to ensure they meet international competition standards. In May and June, a series of test events will be held to further optimize the functionality of these venues.

Third, we have planned diversified exchange programs for the upcoming event. During the games, we will host the Chengdu FISU World Conference , the 2023 Chengdu Biennale , and activities showcasing the Chinese intangible cultural heritage. Our goal is to provide a relaxing and delightful atmosphere for young people from all over the world to deepen mutual understanding and enhance friendships. In addition, we will offer various travel routes to visitors, including visits to world heritage sites, allowing them to experience the rich history, diverse culture, and beautiful landscapes of Sichuan.

Fourth, we have been improving our services that are meticulous and professional. We have engaged with all participating delegations to improve our services at the athletes' village. We have improved the entire service system, including those related to guests' arrival, accommodation, transportation, and other services. Our aim is to ensure that all participating delegations from around the world can have a comfortable stay, enjoy delicious food, and participate in the games with peace of mind. At the same time, we have recruited 20,000 volunteers for the games and received over 1.3 million applications for city volunteer services. We have also improved training for our service teams to ensure that they will provide warm and hospitable services throughout the games.

Recently, the spring meeting of the delegation heads for the World University Games was held in Chengdu. The FISU and delegations attending the meeting visited the competition venues and the athletes' village. They have reached a consensus on issues related to registration, visas, arrival, transportation, medical services, and more, and highly recognized our preparation work. The Chengdu Universiade will open in 100 days. We welcome friends from all over the world to Sichuan. We will be waiting for you in the hometown of the panda. Thank you!

Chen Wenjun:

Thanks to Ms. Zheng Bei. I will give the floor to Mr. Wang Fengchao.

Wang Fengchao:

Ladies and gentlemen, and friends from the media, good morning! There are 100 days to go before the grand opening of the 31st FISU World University Games in Chengdu. This will be the first comprehensive international sports event held in western China. Since Chengdu won the bid to host the event, we have thoroughly acted upon General Secretary Xi Jinping's major expositions on sports and fully implemented the requirement of holding a "simple, safe, and splendid" event. In pursuit of excellence through constant improvement, we have spared no effort to push forward the preparation work and strived to present to the world a grand event for youth with unique charms and splendors.

First, we have made every effort to improve the facilities. We have been committed to the idea of whole-process organization of the games and promoted efficient and intensive use of resources and sustainable development. A total of 36 venues were reconstructed from existing venues, which will all be open to citizens when they are not occupied by matches. We will widely apply the environmentally-friendly, energy-efficient, smart, and intelligent technologies in catering, accommodation, transportation, training, and competitions and make an overall plan to manage the Universiade heritage so as to continue to deliver the comprehensive benefits of the games.

Second, we have comprehensively strengthened the organization of the games and ensured cultural exchanges. The general schedule and regulations concerning 18 major events and 269 minor events have been revised and issued. The selection and dispatch of technical committee chairs, and competition directors and managers have been completed. We are working on identifying gaps, improving weaknesses, and optimizing the organization of the games by means of table-top exercises and actual practices. We have made preparations for major events such as the opening and closing ceremony and the torch relay and will organize a city experience tour to visit the Jinsha Ruins site and the Dujiangyan irrigation system to create platforms for university students to enhance friendship and build bridges for mutual learning and exchanges between different cultures.

Third, we have upheld the principle of hosting the games, managing the city, and benefiting the people throughout the whole process. We have made extensive efforts to carry out cultural, sports, entertaining and sightseeing activities to present a dynamic and vibrant Chengdu, and advanced development of various areas and organic renovation and upgrading to improve the function, quality, and image of the city on all fronts. People have widely participated in public fitness programs, with 9.4 million people regularly exercising throughout the city. The Universiade has brought more vitality and meaning to Chengdu, "a park city at the foot of snow mountains and a prosperous city full of happiness."

Hello, friends from the media. Chengdu is one of the first national historical and cultural cities in China. It is an open, pluralistic city with vitality and vigor. It is constructing a park city demonstration zone that embodies the new development concept. At present, over 21 million citizens in Chengdu are enthusiastically anticipating this great event. We sincerely invite friends from all over the world to meet in Chengdu and make their dreams come true. They can enjoy the games, make friends, and personally experience the charm of the city. Whoever visits Chengdu will not want to leave and will want to come back again to visit. Thank you.

Chen Wenjun:

Thanks to Mr. Wang Fengchao. Now the floor is open for questions. Please identify your media outlet before raising your questions.

The Poster News APP:

The Universiade is a comprehensive world games second only to the Olympic Games in scale and is a sports event representing the highest level of competition among university students from around the world. How will the Chengdu Universiade promote the competition of athletic skills, exchanges, and interactions among the global youth?

Wang Jiayi:

Thank you to this reporter for your question. The mission of the Universiade is to improve the level of global university sport, promote exchanges and cooperation among university students of all countries, and enhance understanding and friendship. It is not only a sports stage for global youth to compete with each other in terms of athletic skills and improve their level of competition but also an educational platform for youth to communicate and interact with each other and broaden their international horizons. Given that the Chengdu Universiade arrives following three years defined by the COVID-19 pandemic, university students from around the world have stronger aspirations for such kind of exchanges.

The Chengdu Universiade will make full arrangements for carrying out global youth exchanges and interactions. Currently, we are formulating and improving a special plan for cultural exchanges. Based on the guiding principle of organizing diverse activities that are fashionable and cater to the taste of young people, provide them with enough cultural experience, and promote shared prosperity of all civilizations, we have come up with the arrangements for a series of activities to facilitate the exchanges of global university students in terms of sports, science and technology, culture, and innovation. During the Universiade, we will hold an art exhibition featuring the park city of Chengdu in the Universiade Village, as well as intangible cultural heritage exhibitions and experience activities, Chinese and international youth interaction activities themed on music, dance, and Sichuan Opera, and exchange activities, including getting close to watch giant pandas and visiting city museums to experience the culture of the city. Chengdu also has Sanxingdui Ruins site and Chengdu delicacies, which are quite popular among university students. All these can demonstrate the unique culture of the host country and host city and better promote in-depth exchanges and interactions among the global youth.

At the same time, as an important part of the events during the Universiade, the FISU World Conference and other academic exchange events will also be held. Themed "University Sports: Embracing a Colorful World," sports-centered academic exchange and discussion events will be organized in various forms, including oral reports on specific subjects, expert forums, round-table discussions, and group discussions. 

We will take the Universiade as an opportunity, and leverage the Universiade website as a platform to launch a column for young reporters. Focusing on topics of concern among contemporary university students, we will widely mobilize global university students to carry out exchanges and interaction and encourage them to contribute to the organization of the Universiade, the spread of diverse cultures, and friendly exchanges between China and other countries to jointly advance the building of a community with a shared future for global youth. Thank you.

CRNTT:

I have two questions. First, the 31st FISU World University Games is the first world-class multi-sport event to be held in western China. As a western province; does Sichuan meet the requirements for convenient arrivals of athletes and related staff? Second, how can hosting the Universiade further enhance the level of opening-up and cooperation?

Zheng Bei:

Thanks for your questions. They are of great significance. Since the 18th CPC National Congress, under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, the CPC Sichuan Provincial Committee and the provincial government have committed to deepening opening up and cooperation and actively served and integrated this goal into the country's new pattern of development. Leveraging the Chengdu Universiade as an opportunity, we have accelerated the building of a comprehensive transport network and have been moving to the forefront of opening-up from an inland province. 

First, we have accelerated the construction of corridors for opening-up. With the opening of the Chengdu Tianfu International Airport, Chengdu has become the third city in the Chinese mainland to have two international airports, providing access to 131 international and regional air routes. In addition, Sichuan province now has 42 high-speed railways and expressways. The once-difficult road to Shu is now a thing of the past in Sichuan. The connected transportation has been fully realized, and we are striving to advance building a smooth transportation network. We have also opened green channels for the Chengdu Universiade to ensure athletes and friends from around the world can arrive and depart quickly and conveniently. 

Second, we have enhanced international exchanges and cooperation. There are 23 approved consular organizations established in Sichuan province. Chengdu now boasts the third-most consulates after Shanghai and Guangzhou. It has established economic and trade ties with over 220 countries and regions. There are more than 5,300 foreign companies in Sichuan province, 337 of which are among the world's top 500. The circle of friends with whom Sichuan can communicate and cooperate has continued to grow. 

Third, we have created new strengths for opening-up. Seizing the opportunities presented by the convergence and superposition of national strategies in Sichuan, including the Belt and Road initiative, the development of new land-sea transit routes for the western region, and the development of the Chengdu-Chongqing economic zone, we have vigorously promoted opening-up to the west and south. The number of China-Europe freight trains from Chengdu and Chongqing has accounted for more than 30% of the country's total. The number of rail-sea intermodal trains from Sichuan to the Beibu Gulf Port in south China's Guangxi Zhuang Autonomous Region has increased by more than 30% for two consecutive years. We will take the Chengdu Universiade as an opportunity to enhance exchanges and cooperation with other countries in the world and share development opportunities with them to pursue opening-up and cooperation on a larger scale, in broader areas, and at a deeper level. Thank you. 

21st Century Business Herald:

The Chengdu Universiade is the first major international event to take place after China adjusted its COVID-19 response measures. Tens of thousands of athletes and spectators from various countries and regions are expected to gather in Chengdu. What facilitation arrangements will be provided to them? How can tickets be purchased for the games? What advice do you have for watching the games? Thank you. 

Wang Fengchao:

Thank you for your questions. In order to ensure a smooth and enjoyable experience for everyone involved, the organizing committee has meticulously organized and prepared the following the open approach. All events in the venues that have suitable watching conditions will be fully open for ticket sales, allowing the public to watch the event on site. 

Based on ticket operation plans and communication and coordination with the FISU, we plan to fully launch ticket sales in early June. Related ticketing information will be published on the games' official channels. Close attention from the public and the media are welcome. 

For on-site viewing, we will set up audience service information desks, baby stroller storage areas, wheelchair rental services, medical care stations, nursing rooms, accessible entrances, and restrooms to effectively meet the various needs of the audience. Meanwhile, a bilingual guide for watching events in both Chinese and English will be provided. The section on "About Chengdu Universiade Tickets" introduces ticket knowledge, holder instructions, and common ticketing problems; the "Must-Read for Audience" section highlights transportation services, venue facilities, services, special tips, and rules for viewing events; the "How to Get to the Venues" section emphasizes the venue index, Universiade venues, and the supporting facilities around the venues, and the "Experience Chengdu Culture" section focuses on Chengdu's scenic spots and attractions rated 4A or above, famous cultural sites and museums, and new urban economic development landmarks. All these aim to bring audiences a safe, efficient, convenient, and comfortable viewing experience. Thank you.  

Science and Technology Daily:

The Chengdu Universiade is the first university games supported by 5G technology. We know that a satellite called Dayun was sent into space last year. Can you brief us on other smart elements and high-tech means related to the Universiade? How will they make the preparation for the games smarter and make the games fairer and more just? Thank you. 

Wang Fengchao:

Thank you for your questions. Taking the Universiade venues as an example, there are three venues at Dong'an Lake Sports Park, including a multi-purpose gymnasium, an aquatics center, and a comprehensive ball games gymnasium. The "BIM technology + smart construction site" cockpit system was adopted throughout their construction in order to realize the smart construction of these large-scale venues, resulting in intensive and compact space structure, improved efficiency, and reduced energy. The multifunctional use of venues has been realized, which means that we can convert an ice hockey rink to a basketball court in 4 to 6 hours. Fenghuangshan Sports Park has been equipped with an intelligent navigation system and an intelligent security assistance service system to provide indoor positioning navigation, real-time positioning guidance navigation, and one-click rescue services.

At the same time, we will install smart robots at key venues, such as the special waiter Rongbao, named after the Games' mascot, which is the first robot in the world to feature emergency handling functions. It's equipped with a first-aid kit, defibrillator, and other medical tools and offers services like face identification, temperature measurement, and multi-language translation. 

We also developed an app entitled "Chengdu FISU Games" to offer three kinds of services, namely, competition participation, competition watching, and life services. The competition participation sector can provide a VR guide to the Universiade Village, realize activity appointments, and publish catering, transportation, and weather information. The competition watching sector includes the history of the Universiade as well as an introduction to competition items and the schedule, ticket purchases, competition schedule and results consultation, and live broadcasts of key events. The life service sector includes an online tour of Chengdu city, financial services, online shopping, and departure tax refund services. Thank you.

CCTV:

What's the current progress of the formation of China's delegation? What can we expect regarding the competition's results? Thank you.

Wang Jiayi:

Thank you for your question. This is a question of common concern among college students.

China has always placed great emphasis on exchanges and cooperation with the FISU and has actively taken part in various competitions it has held around the world. As the host country of this session of the Universiade, we have received a lot of attention and high expectations. Under the support of the General Administration of Sport, the formation of the delegation has made smooth progress. I will share with you in three aspects:

First, we will strive to take part in all the competition items. The Chengdu Universiade features 18 sports, all of which we will attend. In addition, we will try to participate in all the events. Currently, there are over 800 delegates, among whom there are some 500 athletes.

Second, the athlete selection is well underway. Following the principle of openness, fairness, and impartiality, we select competitors via competitions and take into account character, willpower, and overall strength.

Third, preparations are proceeding at full steam. Intensified training will be organized in a planned way, targeting 18 sports so as to fulfill high-level preparations and achieve great results during the competition. At the same time, we will conduct zero-tolerance anti-doping work. As China is the host country, we should perform well and in a clean manner.

One thing that I should point out is that the Chengdu Universiade is not only a stage for sports competitions but also a communication platform and an opportunity to showcase the comprehensive quality and spirit among Chinese college students. The Chinese delegation will enhance competition and communication with athletes from other countries at the stadium. We expect to realize a harvest of both competition results and morality and showcase an appealing, amiable, and respectable Chinese image. Thank you.

Zhejiang Daily:

Anti-doping is an important part of holding top-level international competitions. Could you please brief us on the anti-doping work of the Chengdu Universiade?

Zhou Jinqiang:

The Organising Committee of the Chengdu 2021 FISU World University Games has placed great emphasis on anti-doping work, made testing plans in accordance with technical standards and requirements of the FISU. With accreditation from the World Anti-Doping Agency, the testing will be conducted by a Beijing anti-doping laboratory . By now, the work plans of the control guidelines, publicity, and education, as well as sample transfers, have been formulated. The doping test, anti-doping education, and risk control of food-borne doping are all well underway. The FISU has expressed satisfaction and given a good appraisal of our country's capacity and experience of anti-doping work in comprehensive sports events. 

Here are some specific highlights.

First, regarding doping testing, the Chengdu Universiade will conduct doping tests throughout all sports categories. By now, we have completed three rounds of doping control station acceptance tests, which have all met the requirements. During the competition, we will dispatch 78 doping control inspectors to conduct the work. The Chengdu Universiade has introduced some trials on doping tests. It will conduct paperless tests through the China Doping Intelligent Management Platform following the frugality principle; it will, for the first time in the history of the Universiade, conduct dried blood spot tests through advanced scientific techniques and stringent procedure control measures to create a fair and clean competition environment for athletes.

Second, so as to promote anti-doping education, the Chengdu Universiade will establish anti-doping education stations at the Universiade Village to provide Q&A sessions, video studies, and cultural demonstrations to guide athletes, trainers, and service team members to proactively increase their anti-doping knowledge and awareness. At the same time, we will also create a clean, pure, and positive atmosphere during intense competitions through the stations and related education and publicity activities.

Third, concerning the prevention and control of foodborne doping risks, the organizing committee adheres to the principle of "prioritizing prevention, risk management and controlling processes." The committee will strictly implement food safety requirements for large-scale sports events, strengthen oversight over the entire food chain, strictly control the processes, and eliminate food safety and foodborne doping incidents. This approach will ensure the cleanliness and purity of the Universiade. Thank you.

CETV:

Major international events cannot be held without the efforts of volunteers. The public is paying close attention to the recruitment of volunteers for Chengdu Universiade. How is the recruitment of volunteers progressing, including the number and proportion of college students involved and the scope of schools participating? What special training programs have been arranged for the event's needs? Thank you.

Wang Fengchao:

Thanks for your questions. The Universiade has recruited more than 20,000 volunteers, including professional volunteers providing services in areas such as language, competitions, award ceremonies, and flag-raising ceremonies. Recruitment was completed in March, and the volunteers are from 34 different universities.

They are currently undergoing general knowledge training, including 60 courses such as foreign affairs, international etiquette, oral communication skills, and civilized etiquette. The training is mainly conducted online, including testing. Volunteers who pass the tests will undergo an eight-day offline intensive training program to further improve their abilities. They will provide services in a series of test events in May and June and those who meet the requirements will thereafter begin their work. 

During the recently concluded Heads of Delegation Meeting (HoD Meeting), over 200 volunteers from 10 universities in Chengdu impressed the FISU officials and delegation members with their warm service, friendly attitude, professionalism, and fluency in multiple languages.

At the same time, we have launched the "Partnership Plan" for urban volunteer services, striving to create a strong atmosphere where "everyone is a volunteer." Over 1 million urban volunteers are expected to participate in publicizing the host city and the sports events, and providing other volunteer services. Volunteers of Chengdu Universiade are affectionately nicknamed "little green peppers." As the "image spokesperson" of the city, these volunteers will present Chengdu to the world with warm-hearted and thoughtful services, spreading the Tianfu culture that boasts amity and charity. Thank you.

Cover News:

Sports are an important way for young people to grow up healthily and improve their overall quality of life. How will Sichuan province use the Universiade as an opportunity to promote the healthy development of young people and sports in the province? Thank you.

Zheng Bei: 

This is a very good question. The upcoming 31st FISU World University Games will be the first large-scale international sports event to be held in western China. Perhaps most importantly, it presents a significant opportunity to encourage Sichuan youth to participate in sports and promote their all-round and healthy growth. With this objective in mind, we have prioritized the following tasks:

First, we have actively created a strong sports atmosphere. We have extensively organized a series of sports activities such as basketball, volleyball, table tennis and sports exchange activities among the youth in Sichuan province and Chongqing municipality, aiming to create a unique event IP so that more young people can enjoy the fun of physical exercise, improve their health and exercise their willpower. We have also organized college volunteers to travel to different parts of the province to conduct sports training activities and encourage more young people to love sports. This is an important task we have undertaken.

Second, we have comprehensively deepened the integration of sports and education. We have organized professional athletes to participate in sports classes in various schools, encouraged more outstanding retired athletes to serve as school sports coaches, and promote Universiade sports on campuses to enhance young people's enthusiasm for participating in sports. The "Gongga Cup" Youth Campus Sports League has been held in our province for three consecutive years. We aim to promote "frequent training" through "regular competition," which will enhance students' interest in improving their sports skills.

Third, we have steadily moved forward with opening the venues of the Universiade to the public and have taken actions to benefit the people. Just now, Mr. Wang said in his introduction that the venues and facilities of the Universiade have been open to the public for free or at a low cost. By doing so, we have brought more campus-based sporting events, PE classes, and daily training to these venues, enabling young people to appreciate the charm of Universiade culture and inspiring their vitality and enthusiasm for sports. Thank you. 

Hong Kong Bauhinia Magazine:

The post-game operations, maintenance, and utilization of large sports venues is a world-level challenge for event organizers. Will these venues later be open to citizens? The Universiade has improved national fitness. How will Chengdu increase people's sense of fulfillment and happiness by hosting the Games? Thank you.

Wang Fengchao:

Thank you for your questions. Since the beginning of preparation, we have stayed committed to the vision that the Chengdu Universiade will be inclusive and a benefit to the people. We have comprehensively implemented public-interest initiatives in terms of venue utilization, sports promotion, cultural activities, and environmental improvement to make the Universiade "a project of the heart" that improve people's well-being.

In terms of venue utilization, we have taken measures to ensure that all qualified venues will be open to the public and undertake sporting events. The list of venues with tailored policy support has been dynamically updated to benefit the people, and various experience-based day activities, such as Fitness Day and Sharing Day, have been held there. In 2022, the venues were open to the public for nearly 80,000 hours free of charge or at a low price. More than 5.09 million people visited these venues, and 727 sporting events were held there. All these have promoted extensive public fitness activities in Chengdu. 

In terms of sports promotion, we have changed spare spaces in urban parks and communities into high-quality sporting spaces to increase urban vitality. We have also built neighborhood fitness facilities and communities that feature various sports, finished training of over 1,000 community fitness instructors, and held more than 6,400 events, including community sports festivals, to let more citizens enjoy fitness and happiness brought by sports.

In terms of cultural activities, we have planned and launched various public events and cultural exchange events to ensure all citizens can participate in and enjoy the Universiade. We have held music weeks and art exhibitions and carried out more than 5,000 Universiade-themed exhibitions, performances, and publicity events in communities and campuses. Amid a campaign to build role models for nationally civilized cities, Chengdu has encouraged its citizens to study foreign languages and etiquette. Under such circumstances, we have promoted an app called "U-translate" to help facilitate citizen's communication with the world.

In terms of environmental improvement, we have given prominence to the nature of Chengdu as a "park city" and have been prepared to host a green and low-carbon Games. We have added a special zone called "Low-carbon Universiade" to the Tanhuitianfu app and encouraged market entities and citizens to contribute to the achievement of carbon neutrality targets during the Games. We have also improved the sports and leisure facilities in Chengdu's municipal parks and enhanced the service capacity of the Dong'an Lake Sports Park. Camping in parks and watching the sunrise on the top of Longquan Mountain have already become new leisure trends in Chengdu.

We sincerely welcome friends from around the world to visit Chengdu, where a strong atmosphere of fitness and fashion has been formed. Together with Chengdu residents, they will enjoy a healthy and happy life brought about by the World University Games. Thank you.

Chen Wenjun:

The last question.

Red Star News:

A successful sporting event will help promote the vision and spirit of the sports. What are the visions laid out by the organizers of the Chengdu Universiade? What are your considerations for improving national fitness by hosting the Universiade and integrating sports with city development? Thank you.

Wang Fengchao:

Thank you for your questions. The organizers of the Chengdu Universiade have followed a principle of presenting a streamlined, safe, and splendid Games, which is demonstrated throughout the whole preparation process. While focusing on the Universiade's preparation, we have strengthened national fitness campaigns through various activities. We have launched an action to "Meet the Most Beautiful Sport," introduced several themed routes for outdoor recreational sports, created 100 sports consumption demonstration scenarios, and provided free or low-price tickets and 10,000 sports coupons for the public's benefit. By doing so, we have encouraged citizens to visit urban parks and the Tianfu Greenway, inspired their enthusiasm for national fitness campaigns, and fostered an atmosphere of leisure and sports in the city. When the Universiade come to Chengdu, its sport spirit will integrate into the city's Tianfu culture, which features amiability, optimism, openness, and inclusiveness, and together they will forge the city's spirit of greater strength and resilience. Thank you.

Chen Wenjun:

Thank you to all the speakers and friends from the media. Today's press conference concludes here. Goodbye.

Translated and edited by Zhang Rui, Wang Wei, Guo Yiming, Ma Yujia, Xu Kailin, Liu Sitong, Yang Xi, Li Huiru, Mi Xingang, Yuan Fang, Xiang Bin, Huang Shan, Li Xiao, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Luo Wen, minister of the State Administration for Market Regulation (SAMR)

Ms. Gan Lin, vice minister of the SAMR

Mr. Tian Shihong, vice minister of the SAMR

Mr. Pu Chun, vice minister of the SAMR

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 13, 2023

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 14th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Luo Wen, minister of the State Administration for Market Regulation (SAMR), to brief you on energizing the market and solidifying the foundation for high-quality development, and to take your questions. Also joining us today are three vice ministers of the SAMR: Ms. Gan Lin, Mr. Tian Shihong and Mr. Pu Chun.

Now, I'll give the floor to Mr. Luo for a brief introduction.

Luo Wen:

Friends from the media, good afternoon. To begin with, I'd like to thank you for your long-standing interest in, support and help for the market regulation work. It is also my pleasure to have the opportunity to speak with you today and brief you all on market regulators' ideas, measures and progress concerning implementation of major decisions made by the 20th National Congress of the Communist Party of China (CPC).

At the 20th CPC National Congress, General Secretary Xi Jinping stressed that high-quality development is the primary task for building a modern socialist country in all respects, and called for efforts to expedite the establishment of a new development pattern and promote high-quality development. Practical efforts over the years have taught us that high-quality socioeconomic development would not have been possible without hundreds of millions of vibrant and resilient businesses. Since the 18th CPC National Congress, the Chinese market has seen a significant expansion in size, a continued optimization in structure, and a gradual improvement in environment. Various thriving businesses have provided a strong support for stable economic growth and comprehensive elevation of the nation's overall strength.

This year marks the start of fully implementing the guiding principles of the 20th CPC National Congress, and it is particularly important to ramp up efforts on the economic side. Market regulators will resolutely implement the decisions and plans made by the CPC Central Committee and the State Council. We will give full play to our close connections with both the market and businesses, further optimize our regulatory ideas, improve institutional arrangements, develop new measures, and make greater efforts to energize all market entities, in a bid to consolidate the foundation for effectively upgrading the quality of the country's economy and achieving reasonable growth.

First, we will energize market entities by deepening reform. We will improve the market entry and exit system and establish a set of regulatory rules that are unified, standardized, impartial and transparent. We will further reduce government-imposed transaction costs for market entities, and provide greater convenience for business production and operation. In addition, we will keep optimizing regulatory measures, improve the effectiveness of regulation, and make ongoing and ex post regulation more precise and scientific using methods such as credit rating-based regulation and smart regulation.

Second, we will further spur market vitality by pursuing fair competition. Protecting and promoting fair competition and creating an inclusive and fair market environment is conducive to giving full play to businesses' initiative and creativity, and continuously boosting their growth momentum and innovation vitality. Market regulators have always laid equal emphasis on regulating their own work and promoting development, so as to become a builder of a fair competition system, a protector of a fair competition market, a defender of consumers' interests, and a guardian of a unified domestic market. Market regulators will investigate and deal with various cases of monopoly and unfair competition in accordance with the law, fully implement an examination system for fair competition, and provide enormous market space for all sorts of businesses to thrive.

Third, we will implement law-based governance to revitalize the market. The rule of law should play a more important role in consolidating the foundations of governance, meeting people's expectations, and maintaining long-term development. Market supervision authorities need to further apply law-based thinking and approaches to ensure that their work is carried out in line with the rule of law and constantly improve the stability of market supervision and stabilize enterprises' expectations. To boost market confidence, we will ensure continuity and consistency in law enforcement that is fair and equitable. We will also balance the principles of "law, reason, and emotion," improve the effectiveness and efficiency of our work, and ensure that our law enforcement is both firm and compassionate.

Fourth, we will provide greater support and assistance to enterprises and small business owners, recognizing their crucial role as the mainstay of the market economy and the driving force behind its vitality. Market supervision authorities will intensify efforts to improve and implement measures that will help enterprises overcome challenges and obstacles. We will step up targeted cultivation and precise assistance, implementing initiatives aimed at enhancing high-quality development and boosting competitiveness. Additionally, we will crack down on illegal fee collection to ease the burden on enterprises.

Fifth, we will promote order and vitality through regulation. Creating a favorable "soft environment" to stimulate market vitality will be impossible without "hard measures" to regulate market order. Market supervision authorities will take resolute actions and not be lenient toward behaviors that violate market rules and disrupt market order, such as price fraud, infringement, counterfeiting, and false advertising. In particular, for key areas directly related to people's health and safety, such as food, drugs, industrial products, and special equipment, we will always stick to strict law enforcement, strengthen regulation, and severely punish illegal behaviors to promote a healthy market order and unleash market vitality.

This concludes my introduction. Next, my colleagues and I are happy to answer your questions. Thank you.

Shou Xiaoli:

Thank you, Mr. Luo, for your introduction. The floor is now open to questions. Please identify the news outlet you represent before raising questions.

Southern Metropolis Daily:

Self-employed individuals, represented by street vendors, play a vital role in China's economic development and are essential to the country's economic recovery. What specific measures will be taken this year to promote the growth of these businesses? Thank you.

Luo Wen:

Thank you for your question. Self-employed individuals play a crucial role in China's socialist market economy, serving as important components of the industrial, supply, and consumption chains while also functioning as vital components in the market. They are the direct providers of services in people's daily lives. Since the 18th National Congress of the Communist Party of China, self-employed businesses have experienced significant growth due to the encouragement, support, and guidance of the Party and the government. The total number of self-employed businesses has increased from over 40 million in 2013 to 116 million today. They have played a key role in creating jobs, stabilizing employment, improving people's lives, and promoting market vitality.

We must also acknowledge that individual and family-based businesses are generally small in scale and lack the ability to withstand risks when competing in the market. Given the challenges posed by the economic downturn and the COVID-19 pandemic, these businesses continue to face numerous difficulties and require our special protection and care. Going forward, in accordance with the guiding principles of the 20th CPC National Congress, the SAMR will provide stronger assistance and support to ensure the healthy development of these businesses.

First, we will fully implement the guidelines for promoting the development of self-employed businesses. We will leverage the inter-departmental joint meeting mechanism and work together with relevant departments to actively research and formulate support policies in social security, taxes, and fees. We will also continue to organize events such as the "National Month of Service for Individual Business Owners" to provide strong and helpful support for their development.

Second, we will implement pilot projects according to self-employed individuals' types and categories. We will focus on three different types of self-employed individuals: subsistence-based, growth-focused and development-oriented types, as well as four different categories, including local specialties, high-quality new products, and those associated with famous brands. We will provide targeted cultivation and support and help them in a scientific and targeted manner. Meanwhile, we will also strengthen investigation, research, monitoring, and analysis to continuously improve our service standards.

Third, we will give full play to service platforms for self-employed individuals. We will adhere to the government's guidance, allow the market to play its part, and share the benefits with all of society. By integrating resources from all aspects, we will offer information services such as entrepreneurship training, recruitment and employment, laws and policies to self-employed individuals. We will assist more self-employed individuals in understanding policies and reaping greater benefits, supporting them to better leverage their advantages and integrate into the market.

Fourth, we will focus on Party building efforts for micro and small enterprises, self-employed individuals, and professional markets. We will explore and strengthen Party building within new business forms and employment groups, integrating Party building work into the whole process of supervision and services. In particular, we will advance the establishment of Party building work guidance stations under market regulation offices, ensuring that all required stations are built. Through such efforts, we will promote the high-quality development of self-employed individuals with high-quality Party building. Thank you.

Zhonghongwang.com:

High standards are an important indicator of a country's high-quality development and its participation in high-quality competition. What role does China's standardization work play in the process of promoting high-quality development? What are your plans for the next steps? Thanks.

Luo Wen:

Thank you for your important questions. Competition among enterprises involves not only products but also standards, which hold even higher importance. I would like to invite Mr. Tian to answer your questions.

Tian Shihong:

As a crucial element of a fundamental system, standards, along with measurement, certification, recognition, inspection and testing, make up a nation's quality infrastructure. As such, they also serve as an essential technical force to support high-quality development.

General Secretary Xi Jinping pointed out that standards determine quality, and high quality can only be achieved with high standards. Standardization plays a foundational and leading role in promoting the national governance system and the modernization of governance ability. The CPC Central Committee and the State Council have attached high importance to standardization-related work and specifically issued an outline to promote standardized development at the national level, forming a comprehensive plan for the medium- and long-term development of our standardization. The SAMR has consistently treated standardization-related work as a key task for promoting high-quality growth. We have actively collaborated with relevant departments and local authorities to continuously improve standardization management systems and mechanisms that are unified, authoritative and highly effective. We have also accelerated the building of a system of standards that is structurally optimized, advanced, reasonable, and compatible with international rules, providing support to high technology innovation, high-level opening-up and high-quality development. We have mainly carried out our work in the following aspects.

First, we have strengthened the top-level design of the standards system. The Standardization Administration, along with 15 other departments, has released an action plan for implementing the outline to promote standardized development at the national level. We have advanced the implementation of various major projects, including those focused on high-end equipment manufacturing standardization to strengthen China's infrastructure, leading projects for new industry standardization, initiatives for upgrading carbon peaking and neutrality standardization, and projects aimed at advancing standardization to align with global standards. We have also issued a series of documents on guiding standardization-related work in green development, digital villages, intelligent manufacturing and other fields, providing policy support for building and promoting the system of standards for high-quality development.

Second, we have accelerated our efforts to improve the supply structure of standards. We have promoted a shift from government-led supply standards to a balanced emphasis on both government and market-driven supplies. We have adhered to the fact that standards are set for public welfare and thus strengthened the government's guidance and management. At the same time, we have also encouraged enterprises and society to actively participate in setting standards, leaving development room for the market to formulate standards independently. So far, China has issued 43,000 national-level standards, 78,000 registered industrial standards, 62,000 local standards, 53,000 open self-declaration group standards, and over 2.7 million enterprise standards. Among these, more than 3,200 are leading enterprise standards with first-class technologies, advanced management and remarkable benefits. Thanks to such efforts, we have essentially established a standardization work pattern that is market-driven, government-guided, participated in by society, enterprise-centered, and characterized by openness and integration.

Third, we have accelerated standardization in all sectors. We have taken extensive action to implement the "Standardization Plus" program. As a result, nearly 10,000 agricultural standards have been set, and standardized production accounts for over 30% of agricultural production. Industrial standards have also been constantly upgraded. The international standard conversion rate in many fields, including key equipment manufacturing and next-generation information technology, now exceeds 90%. The consistency of standards on major consumer goods with international standards has reached 95%. The service sector's standards system has improved steadily, with newly released national standards on this sector increasing by 12% year on year. We have also effectively standardized social development in 37 key areas, including administrative management, basic public services, public security, social governance, and other social programs. Standardization is playing an increasingly prominent role in promoting industries' transformation and upgrading, meeting people's desire for a better life, and serving China's opening-up.

Fourth, we have consolidated the foundation for the development of standardization. We have strengthened the entire life cycle management of various standards. Scientific research capacities and management systems for standardization have been steadily improved. We have vigorously advanced the standardization of basic research and application services. Currently, there are more than 1,300 national professional technical organizations for standardization in China, with over 50,000 domestically registered experts and 12,000 experts registered to international organizations. More than 7,300 national pilot demonstration programs for standardization have been established, and nearly 30 national technical standard innovation centers have been built, greatly boosting our basic capacity to support standardization.

Next, the SAMR will fully study and implement the guiding principles of the 20th CPC National Congress and focus our efforts on key targets and tasks to build China into a manufacturer of quality. We will fully implement the outline to promote standardized development at the national level and the outline to improve the overall quality of China's economy. We will strive to change from a pattern in which the government leads the standards-making process to a pattern in which both the government and market contribute to the standards-making process, from a pattern in which standards are mainly applied in industry and trade sectors to a pattern in which standards are applied in all economic and social sectors, and from a pattern in which standardization work is conducted domestically to a pattern in which standardization work is conducted through international cooperation. In addition, standardized development will transform from a quantity-and-scale model to that of quality and efficiency. By doing so, we will work faster to create a system of standards for promoting high-quality development and serve high-quality economic and social development with standardization work. Thank you.

Kyodo News:

In 2021, the SAMR imposed an administrative penalty on Alibaba Group according to China's anti-monopoly law for the company's abusing its dominant position in the country's online platform market. What's the current situation of China's anti-monopoly work in the online platform market? Thank you.

Luo Wen:

Thank you for your question. Recently it has been a question of common concern. Ms. Gan Lin will answer your question.

Gan Lin:

Thank you for your interest regarding China's anti-monopoly work. Just now, Mr. Luo Wen stressed in his remarks that we have always laid equal emphasis on regulating supervision and promoting development. Also, we have continued to optimize the order of market competition through law enforcement in the field of the platform economy, and further stimulated the innovation vitality and development momentum of platform enterprises and small- and medium-sized enterprises on these platforms.

Let me illustrate this for you. Our law enforcement methods consist of tiered supervisory measures, which include not only administrative penalties but also cautionary talks, administrative guidance, and regulatory guidance. These measures combine to form our regular anti-monopoly supervision. By comprehensively applying these measures according to specific problems, the level of competition within the platform economy has been enhanced. Our work mainly focuses on the following three aspects.

First, we have optimized regulations and rules. We have revised the Anti-Monopoly Law, introduced the Law Enforcement Rules and Regulations for Anti-monopoly Supervision over Internet Platforms, and amended supporting regulations such as the Regulations on Prohibiting Monopolistic Agreements and the Regulations on Prohibiting Abuse of Dominant Market Positions. By specifying provisions on the anti-monopoly supervision of internet platforms, the rules and regulations provide clearer and more definitive guidelines for business entities. 

Second, we have strengthened compliant competition guidance. Besides investigating and punishing all forms of monopoly in accordance with the law, we have also urged platform enterprises to completely end monopolistic practices such as requiring businesses to pick sides, to earnestly implement rectification measures, and to improve compliance. Meanwhile, we have given full play to the warning and demonstration effects of typical cases to improve competition order in the market.

Third, we have constantly strengthened regular supervision. We have proposed to enhance the effectiveness of supervision throughout the entire process, from before, during, and after the event, with a full-chain approach. We have strengthened the assessment, monitoring and warning over market competition and optimized preventative supervisory measures to effectively prevent and defuse monopoly risks among internet platforms. This approach ensures fair competition and provides a favorable environment for the well-regulated, sound and sustainable development of platform enterprises. Thank you. 

CCTV:

The CPC Central Committee and the State Council recently issued an outline to improve the overall quality of China's economy, which provides a guide to action on coordinating efforts in this regard. What's the SAMR's plan to implement the outline this year? Thank you.

Luo Wen:

Thanks for your question. Quality is an important guarantee for human production and life. Boosting the overall quality of the country's economy is a critical pathway to better meet people's desire for a better life and improve their well-being. Since the 18th CPC National Congress, the Chinese people's awareness of quality has increased significantly, the overall quality of products and services has improved steadily, and quality safety has been continuously optimized. The outline issued by the CPC Central Committee and the State Council provides a guide to action on boosting the overall quality of China's economy. This year, we will make efforts to implement the outline mainly in the following three areas.

First, we will consolidate one foundation, which refers to quality infrastructure, encompassing measurement, standards, certification and accreditation, inspection and testing, and other sectors. Quality infrastructure is the fundamental support for boosting the overall quality of China's economy. We will accelerate the building of a modern, advanced measurement system, improve the supply structure of government and market standards, optimize the quality certification system, and increase the capability of comprehensive inspection and testing. We will build a batch of national quality standard laboratories and promote one-stop national quality infrastructure services to make our service more efficient.

Second, we will carry out two campaigns, which refer to quality-improving campaigns both in the product and service sectors. In terms of product quality, we will focus on key categories like food and drugs, as well as key groups, including the elderly, students, children, and people with disabilities. We will conduct regulations covering all groups, all categories and all stages to improve quality safety. In terms of service quality, we will strengthen quality supervision of life-related services and target prominent problems from one industry to another to enhance the consumption experience and guarantee a high-quality life for people.

The third is to launch "three projects." Regarding regions, we will launch a demonstration project on regional quality development, explore the building of role model cities that contribute to boosting China's strength in manufacturing, and develop a demonstration zone for quality brand promotion. Regarding industries, we will launch a project to improve the quality of the industrial chain and jointly advance breakthroughs in quality-related generic technologies. We will accelerate the quality upgrading of the industrial system, steer the industrial chain toward the medium- and high-end, and strengthen industrial competitiveness. Regarding enterprises, we will launch a project to develop Chinese brands and improve the mechanism to foster and grow brands. We will conduct evaluations for the fifth China Quality Award and honor its winners to help develop more quality Chinese products and time-honored brands. Thank you. 

Red Star News:

The report to the 20th CPC National Congress made arrangements for the social credit system as one of the systems underpinning the market economy. What achievements have been made in establishing the credit system and strengthening credit oversight in recent years? Thank you. 

Luo Wen: 

Thanks for your question. We know that credit is a pass in the market economy and plays an essential role in improving the market economy system. I will invite Mr. Pu to answer this question. 

Pu Chun:

General Secretary Xi Jinping pointed out that the socialist market economy is a credit economy. Since the 18th CPC National Congress, the market regulation authorities have firmly implemented the decisions and arrangements of the CPC Central Committee and the State Council and established and improved the new-type oversight mechanism, which is centered on the random selection of both inspectors and inspection targets and the prompt release of results, supplemented by oversight of major areas, and based on oversight of credibility . This has reshaped the daily supervision process and realized targeted supervision of enterprises. The oversight efficiency has been constantly improved through coordinated promotion, strongly serving high-quality socio-economic development.

First, a credit information collection and sharing system has been established. A national enterprise credit information disclosure system has been created to legally collect and make public the information of all registered business entities, including their registration, annual reports, administrative licenses, administrative penalties, and random inspections. This has made corporate information more transparent, which is conducive to addressing information asymmetry issues and helps reduce market transaction costs. In addition, the disclosure system has also played a role in encouraging social oversight and guiding society-wide co-governance. Since its launch, the system has collected 5.47 billion pieces of enterprise information, attracting a total of 300 billion visits, with the daily visits exceeding 100 million, and has achieved good social results.

Second, credit constraints and penalties on acts of bad faith have been applied. A management system for abnormal operation list and list of serious legal violations and acts of bad faith has been established and joint punitive actions against bad faith have been conducted so that one dishonest behavior of both individuals and enterprises will result in restrictions at every turn. Meanwhile, the mechanism for protecting the rights and interests of for business entities has been improved, good credit has been restored for some who were once dishonest, and self-correction to reshape the credit has been encouraged. As of the end of February this year, a total of 436,000 pieces of information on administrative penalties were stopped from being made public in advance, 2.87 million records of abnormal operations have been removed from the abnormal operation list, and 9.847 million self-employed individuals have been restored to normal records.

Third, random inspections and supervision have been fully advanced. The random selection of both inspectors and inspection targets and the prompt release of results have realized full coverage on a regular basis, replacing the original inspection system and arbitrary checks involved in daily supervision. The establishment of a supervision system featuring clearly defined rights and obligations, equity and justice, and precision and high efficiency has been accelerated. The supervision actions have been further standardized, and methods have been innovated. Random joint interdepartmental inspections have been actively carried out, checking multiple items during a single inspection. This has not only reduced undue interference from government departments on the independent operation of enterprises but also improved supervision efficiency, saved resources, and cut costs.

Fourth, credit risk classification management has been implemented. Differentiated supervision measures have been adopted according to the credit statuses of business entities. For those with good credit and lower risk, the proportion and frequency of inspections have been reasonably set. For those who have violated the law or have high risks, we have intensified random inspections and enforced strict regulatory measures in accordance with laws and regulations, making the supervision more targeted and precise. As a result, we have not disturbed the honest who abide by the law, yet maintained rigorous warning and deterrence for the dishonest who violate the law and breach trust.

Fifth, we have strengthened credit supervision in key areas. In key sectors such as food, medicine, essential industrial products, and special equipment that affect public safety and the safety of people's lives and property, we have intensified efforts to disclose credit information, restrict dishonest behaviors, and jointly implement punishments. We have accurately identified and rigorously combated illegal and dishonest behaviors, effectively preventing and mitigating risks while ensuring safety measures are in place. Thank you.

The Beijing News:

Maintaining price stability is essential for boosting consumer confidence. In recent years, issues related to prices have attracted a lot of attention. What measures have been implemented to maintain price stability? Thank you!

Luo Wen: 

Thank you. The issue of price is always a concern for the entire society. This question goes to Ms. Gan.

Gan Lin:

Thank you for your question. Price acts as the “barometer” of the market economy and plays a vital role in all aspects of economic activity. It is closely related to every consumer.

As you may be aware, since last year, inflation rates in major economies worldwide have repeatedly hit new highs. Despite this situation, China has maintained generally stable prices, which is a significant achievement. In its efforts to maintain price stability, the SAMR has concentrated on its core functions and undertaken the following initiatives:

First, in terms of epidemic-related materials, we have strengthened supervision efforts to effectively respond to the rapid rise in prices of epidemic-related drugs, protective equipment and medical supplies. Since the outbreak of the pandemic, the price of epidemic-related materials has been a focus of concern for the CPC Central Committee, the State Council, and the general public. In particular, from the end of last year to the beginning of this year, some unscrupulous operators hoarded and even sold epidemic-related drugs and medical supplies at inflated prices. To address this issue, the SAMR quickly took action and issued a “Reminder and Warning Letter on Prices and Competitive Order of Epidemic-related Materials,” which clarified the “Nine Prohibitions” requirement. In addition, a nationwide special campaign was launched to stabilize prices and ensure the quality of epidemic-related drugs and medical supplies. This campaign has been ongoing for half a year and is still in progress. As of now, 6,253 cases have been filed nationwide, with a penalty amount of 39.39 million yuan. These efforts have effectively maintained price stability in epidemic-related drugs and medical supply markets across the country.

Second, we have implemented targeted measures for major commodity categories and critical links to promote stable and healthy socio-economic development. Commodity prices are prone to be heavily impacted by the international markets and have a notable transmission effect. The SAMR has focused on three key areas: key types of commodities, critical periods and major links. We have also continued to intensify our supervision and law enforcement efforts. To address issues related to electricity supply caused by rising coal prices, we have conducted price inspections in major coal-producing areas and severely punished 21 companies that violated the law. To address issues related to spring farming preparations impacted by price spikes in chemical fertilizer, we have punished three fertilizer companies for driving up potash fertilizer prices. To combat instability in industrial chains caused by rising iron ore prices, we have actively provided administrative guidance, issued warnings and reminders, and conducted research and inspections. By guiding market expectations appropriately, we have effectively curbed irrational price increases.

Third, we have focused on key areas and specialty products related to people's livelihoods to resolutely protect the legitimate rights and interests of consumers. Since consumers are mostly concerned about prices in their daily lives, the SAMR has consistently adopted a people-centered approach to overseeing prices in sectors relevant to people's livelihoods, especially in areas such as education, medical care and health. We have launched special crackdown campaigns to address price-related wrongdoings in the abovementioned key sectors, with particular efforts to curb arbitrary price increases and charges. In response to problems with off-campus training, such as “fabrication, exaggeration, and inducement,” we have imposed maximum penalties on 15 agencies based on the Price Law and the Anti-unfair Competition Law. Regarding the issue of overpriced mooncakes, we organized an intensive operation regarding food security, pricing, packaging, and advertising. We conducted inspections in over 80,000 hotels, shops, and supermarkets. As many of you may have noticed, during the Mid-Autumn Festival last year, the average price of mooncakes across the country dropped significantly compared to previous years. Also, we swiftly conducted inspections on “ice cream assassins” (ice creams with unclear or hidden prices that turn out to be excessively high when it's time to pay), actively responded to public concerns, and guided businesses to strengthen self-discipline in pricing and operate in accordance with laws and regulations.

In the next step, the SAMR will diligently implement the decisions and arrangements of the CPC Central Committee and the State Council and continuously enhance the forward-looking, targeted, and effective supervision of prices, better serve the stable operation of the macroeconomy, and better safeguard the interests of the people. Thank you!

Voice of China, China Media Group: 

We understand the importance of preventing catering waste to ensure national food security and promoting a conservation-oriented society. We are also aware that the SAMR has recently launched a special campaign against food waste. Could you please provide us with an update on the latest progress and achievements of this campaign? Thank you!

Luo Wen:

Thank you for your question. My colleague Mr. Pu Chun will answer this question.

Pu Chun:

Thank you for your question. This is a very important issue. As the saying goes, "Every grain of rice and every drop of congee should be cherished." Thrift and frugality are traditional virtues of the Chinese nation and an unshakable tradition of our Party. The SAMR has consistently prioritized the rectification of catering waste, with a persistent focus on setting standards, establishing systems, enhancing supervision, enforcing strict laws, conducting extensive publicity, and providing guidance to promote widespread efforts across society to prevent catering waste.

In March of this year, the SAMR launched a special three-month campaign to combat catering waste within the national market supervision system. The aim is to address outstanding issues, uncover illegal cases, develop group standards, and promote exemplary models in order to foster a positive social culture of frugality and anti-waste. The national market regulatory authorities have mainly focused on the following areas of work.

First, we have intensified regulatory oversight to establish effective constraints. By integrating the prevention of catering waste into the "two responsibilities " framework for food safety, which involved the primary responsibility of food production and operation entities and the responsibility of local government management for food safety, we ensured its implementation and supervision. We have also organized actions such as "random inspections of restaurants" and enforced swift and strict investigation and punishment for illegal cases of catering waste. By the end of March, a total of 2.595 million catering service operators had been urged to conduct self-inspections, resulting in the investigation and resolution of 2,423 cases of illegal behavior, with 229 typical cases publicly announced and exposed.

Second, we have strengthened guidance and leveraged the benefits of role model demonstration. We have studied and formulated the Guiding Opinions on Implementing the Responsibility of the Main Entities of Online Catering Platforms to Effectively Prevent the Waste of Takeaway Food, urging the leading takeaway platforms to play a demonstrating and leading role. We have guided the formulation of comprehensive prompts throughout the entire process, refined the portion descriptions, adjusted the discount for meeting the minimum order requirement, promoted specific measures such as "small portion, small dishes," and established a reward mechanism, which has all helped to promote a standardized and healthy takeaway food ordering industry.

Third, we led by setting standards and establishing long-term mechanisms. We have included food conservation, waste reduction, and prevention of catering waste in the 2023 Guideline on National Standard Establishment , providing strong support for these key areas. We are also promoting the formulation of national standards, such as the Guidelines for Assessing the Effectiveness of Anti-Food Waste Measures in Canteens of Government Organs, and have approved the release of the Credit Rating Evaluation Criteria for the Hospitality Industry to link corporate credit with anti-waste efforts. Furthermore, we are facilitating industry organizations to jointly develop six group standards for preventing catering waste.

Fourth, we are focusing on publicity and guidance and fostering a joint-governance atmosphere. We have organized industry associations to issue joint initiatives, advocating for an increased awareness of food conservation and resistance to wasteful behaviors among enterprises and consumers. We have conducted activities on campuses to promote anti-food-waste knowledge, with anti-food-waste knowledge promotion videos simultaneously played in 371 universities and colleges, reaching over 1 million views. We have also provided guidance to local governments to carry out activities promoting relevant standards and legal knowledge on preventing catering waste, with 5,914 events held and 2.253 million catering industry practitioners trained, receiving positive feedback from society.

Stopping food waste requires the collective participation of the entire society, and it should be a sustained and persistent effort. We have taken the opportunity at this press conference to urge the media to pay more attention to efforts in combating food waste. Let us all become practitioners, advocates, and watchdogs of the "Clear Your Plate" campaign, working together to promote a civilized, healthy, and sustainable dining consumption philosophy. Thank you!

21st Century Business Herald:

Food safety is a major issue concerning people's well-being, and implementing food safety responsibilities is fundamental to food safety. What work has the SAMR done to promote the implementation of food safety responsibilities? And what are the work arrangements for the next step? Thank you.

Luo Wen:

Thank you for your questions. General Secretary Xi Jinping has repeatedly emphasized that food safety should be treated as a crucial political task that involves both the Party and government officials assuming responsibilities. He emphasized the need for the strictest standards, oversight, punishment and accountability to ensure food safety . In September last year, the Food Safety Commission of the State Council specially issued a document, making plans for localities to establish and improve a working mechanism featuring tiered, differentiated, targeted control, and end-to-end efforts to promote the fulfillment of local governments' management responsibilities for food safety. At the same time, the SAMR also issued department regulations requiring enterprises to appoint food safety directors and officers in accordance with the law. This ensures that the main responsibility for the company's food safety is fulfilled by the "smallest work unit," meaning people in charge can be identified, problems can be investigated, and responsibility can be assigned. Centering on promoting the implementation of the responsibilities of all parties, we will take the following steps this year.

First, we will see that enterprises shoulder primary responsibility. We will supervise and guide them to formulate a food safety risk management and control list based on factors such as production, business operations, scale, food categories, and risk levels. The list will be incorporated the enterprise's overall production and business operation process. Meanwhile, we will urge enterprises to appoint food safety directors and food safety officers, and see that the food safety officers strictly enforce daily management and control measures, the safety directors conduct weekly investigation, and the person in charge of the enterprise schedules monthly follow-ups. In addition, all these activities shall be recorded and archived in a truthfully manner for future reference.

Second, we will urge local governments to fulfill their due responsibilities within their jurisdiction. Through the implementation of the guarantee system, we divide all food production and operation entities in China into four levels, A, B, C, and D, according to their scale and business type, and correspond to the four levels of guarantee officials at the city, county, township, and village, ensuring that each entity is overseen by officials. At the same time, the system of "three lists plus a letter of commitment" is implemented for officials in charge. The responsibility list specifies which companies each guarantee official will be specifically responsible for. The task list defines the specific tasks of each guarantee official. The inspection list specifies the inspection items from the upper to the lower level. The letter of commitment means that the officials in charge shall sign a responsibility and task commitment letter with the competent authorities and file it for future reference. Adopting the above-mentioned systems allows local governments' responsibilities to be promoted in a specific, practical, and implementable way.

Third, we will strictly implement the responsibilities of relevant departments. We will guide market supervision departments at all levels to focus on the implementation of the "daily control, weekly investigation, and monthly scheduling" system by food enterprises as a key aspect of supervision and inspection. Enterprises that fail to fulfill their main responsibilities in accordance with the regulations shall be ordered to make corrections and, depending on actual circumstances, may face fines, suspension of production and business operations, or license revocation.

In short, through the establishment and improvement of the food safety responsibility sharing and implementation mechanism, we aim to ensure the two "key minorities" of local Party and government leaders, as well as enterprise safety management personnel, truly fulfill their "last-kilometer" responsibilities. By promoting the primary responsible parties to fully exert their power, we can achieve lasting impact on food safety and fundamentally guarantee its security. Thank you.

China Daily:

Special equipment safety is closely related to people's daily life and production and is connected to the life and property safety of the general public. With the upsurge of efforts to boost the economy in various places, the production pace of enterprises has accelerated after resuming operations. How can we ensure the safety of special equipment to avoid accidents? Thank you!

Tian Shihong:

Thank you. As the China Daily reporter just said, special equipment safety is closely related to daily life and production. It includes not only the safety of pressure-bearing special equipment such as boilers, pressure vessels, pressure pipes, and gas cylinders, but also the safety of special electromechanical equipment such as elevators, passenger ropeways, large amusement facilities, hoisting machinery, and special vehicles used in factories.

With a commitment to safe development, the market regulatory departments have been working to enhance the supervision of special equipment safety. We have been conducting comprehensive investigations to identify and eliminate potential risks associated with special equipment, thereby effectively preventing accidents involving such equipment. As of now, the number of accidents and deaths related to special equipment has decreased by 52% and 36.84%, respectively, compared with the same period last year. No major special equipment accidents have occurred, and the overall safety situation of special equipment in China remains stable.

At the same time, we also need to recognize that special equipment is growing rapidly. The total amount of special equipment is large, with a significant stock of old equipment and a fast growth rate of new equipment. The number of existing special equipment has reached 19,917,300 units. Take elevators as an example; there are 9,982,500 elevators in operation nationwide, transporting more than 2 billion people daily. Among them, 736,800 old elevators have been in operation for more than 15 years, while the growth rate of new elevators added every year is about 10%. At present, large-scale, high-parameter and high-risk special equipment continues to grow, and new materials, processes, and equipment are emerging, along with all kinds of new risks and hazards. At the same time, some enterprises have insufficient safety awareness in the management of special equipment usage, imperfect management systems, and only perform superficial daily maintenance. The phenomenon of operators working without a certificate still exists, which increases the risk of special equipment accidents. In the next step, the SAMR will continue to strengthen the supervision of special equipment safety, urge enterprises to implement their main responsibility for safety, and jointly safeguard the bottom line of special equipment safety, creating a good environment for high-quality development. Specifically, we have several measures in place:

First, we will effectively strengthen the responsibility for safety supervision. We will encourage local governments at all levels to fulfill their local management responsibilities, coordinating and rectifying major safety hazards regarding special equipment. Focusing on the requirement that “managing an industry necessitates ensuring safety,” we will clarify the management responsibilities of relevant industry sectors. Meanwhile, we will also emphasize the role of the special equipment safety joint meeting mechanism within the security commission at all levels, promoting the formation of a joint management and work approach. Market regulatory authorities at all levels will further improve the risk prevention and control mechanism for special equipment, intensify administrative law enforcement, establish connections with criminal justice, and reinforce credit punishment. This will ensure the effective implementation of regulatory measures.

Second, we will emphasize the main responsibility of enterprises. We will formulate and implement regulations for the supervision and management of special equipment production and usage, ensuring enterprises fulfill their responsibilities. We will establish a safe work mechanism that involves daily control, weekly inspections, and monthly scheduling. We will urge enterprises to appoint safety directors and officers, clarify the safety responsibilities of the main responsible person of the enterprise, standardize the behavior of safety managers, and enforce the accountability of the main body of the enterprise. Market regulatory authorities will fully deploy activities to promote corporate responsibility, urging enterprises to firmly establish a safety bottom-line mindset and strictly implement production safety measures.

Third, we will carry out special equipment safety rectification. We will focus on increasing special equipment supervision and inspection efforts in schools, hospitals, amusement parks, tourist attractions, and other public gathering places. At the same time, we will carry out special rectification activities targeting accident-prone weak links, such as town gas pressure pipelines, high-pressure gas cylinders, small boilers, passenger ropeways, and unregistered illegal use of special equipment. We will also strengthen supervision and inspection efforts in key periods, key regions, and key areas, especially ensuring the safety of special equipment during holidays, festivals and major activities, to resolutely prevent and curb the occurrence of serious accidents. Thank you!

Bauhinia Magazine:

In recent years, China has investigated and handled a number of cases of market and administrative monopolies, which has aroused public attention. What follow-up measures will be taken, and how can we better protect and promote fair competition? Thank you.

Gan Lin:

Thank you for your questions. Just now, when I answered the question from the reporter from Kyodo News, I partially addressed your question. Your question encompasses a broader scope, including both market and administrative monopolies. As you just mentioned, in recent years, we have resolutely implemented the decisions and plans of the Party Central Committee and the State Council and investigated and handled a number of representative cases in accordance with the Anti-Monopoly Law, which has aroused public attention and yielded satisfactory results. Next, acting upon the plans and requirements of the 20th CPC National Congress on combatting monopolies and promoting fair competition, we will give equal emphasis to standardizing supervision and promoting development. The measures mainly include the following four aspects:

First, we will further improve the supply of laws and regulations to cement the foundation of the rule of law for fair competition. We will reinforce the foundational role of fair competition policies and ensure the implementation of the Anti-Monopoly Law. Meanwhile, we will intensify efforts to amend the Anti-Unfair Competition Law, improve supporting regulations and rules for anti-monopoly, such as standards for reporting business concentrations, and take solid steps to enhance the operability and predictability of laws and regulations so as to ensure that enterprises have a clearer understanding of the regulatory rules and law enforcement procedures and have greater confidence in the market environment.  

Second, we will further regulate the improper intervention of administrative power in market competition to break local protectionism and administrative monopolies. We will move faster to improve the fair competition review system by promoting the formulation of regulations and enhancing third-party evaluation mechanisms. Regular spot checks and inspections will also be conducted. We will strengthen law enforcement to prevent and stop abuse of administrative power to exclude and restrict competition. We will delimit the rules and improve the code of conduct to reinforce the authority of regulation and enhance the hard constraints on law enforcement. With all these efforts, we will promote the smooth flow of goods and resources in a wider scope.

Third, we will further enhance the quality and efficiency of the anti-monopoly Law enforcement to maintain market order for fair competition. We will take solid steps to carry out our pre-deployed law enforcement to counter monopolies in areas that are important to people's well-being and promptly address violations of the competition law that are of great concern to the people. We will strengthen the review of business concentrations in key areas and further improve case-handling efficiency and review quality. We will advance the building of the compliance management system for fair competition between businesses and continuously optimize the market competition environment.

Fourth, we will further improve the governance capacity for fair competition to expand the influence of anti-monopoly both at home and abroad. We will continue to strengthen publicity and advocacy for fair competition, organize a publicity week for China's fair competition policies, and release annual reports on the enforcement of anti-monopoly and anti-unfair competition laws on a regular basis to create high-quality publicity brands. We will deepen international cooperation to combat monopolies, align with high-standard international competition rules, and actively participate in the governance of international competition to boost market competition and innovation dynamism for a better market environment. With these efforts, we will make greater contributions to accelerating the creation of a new development pattern and the pursuit of high-quality development. Thank you.

Shou Xiaoli:

Please raise your hand if you still have a question. The last question, please. 

Economic Daily:

The Central Economic Work Conference has put forward that we should step up efforts to develop the digital economy, enhance regular oversight, and support platform enterprises to fully play their roles. As the major regulator for the platform economy, what specific measures will be taken by the SAMR in this regard, and what will be done to support the healthy development of the platform economy? Thank you!

Luo Wen:

Thank you for your questions. The CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to the status and role of the digital economy and has made a series of major decisions and plans. The market regulation departments have conscientiously studied and implemented the important instructions of General Secretary Xi Jinping, followed the underlying principles of the development of digital economy, and continuously strengthened regular regulation of internet platforms. We will mainly take measures in the following five aspects to guide the healthy development of internet platforms.

First, we will increase the supply of rules and institutions to create a stable, transparent, and predictable institutional environment. We will establish sound basic rules and institutions in the digital economy and improve supporting institutions such as guidelines, guidance, and standards. By means of open, impartial, and transparent rules and institutions, we will send a clear and definite signal to the market to stabilize market expectations and boost confidence in development.

Second, we will work on improving the regulation mechanisms to enhance the efficient coordination of the internet platforms regulation. We will research and explore ways to establish and improve a multi-layered and tiered regulatory responsibility system with hierarchical correspondence. We will give full play to the role of the comprehensive coordination mechanism, such as the joint meeting mechanism for internet market regulation, improve inter-departmental coordinated law enforcement, and explore the establishment of a regional integration mechanism for communication, coordination, synergy, and cooperation.

Third, we will develop new models of regular regulation to see that internet platform enterprises fulfill their primary responsibilities in compliance management. Focusing on key aspects of compliance management and following the principles of operability, realization, and examination, we will improve the dynamic management of compliance risks on internet platforms. We will also establish evaluation indicators for compliance in specific areas, and develop measures such as spot checks and assessment by government departments, regular regulation, positive incentives, and punishment for rule violations to ensure that internet platform enterprises conscientiously fulfill their primary responsibility.

Fourth, we will advance digitalization to enhance the capacity and level of smart regulation. We will take active steps to explore the application of new technologies, including big data, blockchain, and AI in the regulation and law enforcement of internet platforms. We will speed up the development of a national platform for regulating online trading, strengthen monitoring, early warning systems, risk prevention and control, and focus on enhancing look-through regulation capacities. This will allow us to achieve unified command and coordination, quick response, prompt treatment, and more accurate, timely, and effective regulation.

Fifth, we will optimize service measures to better unleash the growth potential of the digital economy. We will focus on establishing national demonstration zones for internet market regulation and service and support local authorities in developing new regulatory and service models. We will actively cultivate internet-based business entities, foster the development of industrial clusters, and protect the legitimate rights and interests of all parties in accordance with the law. At the same time, we will further optimize the business environment and guide internet platform enterprises to achieve open and innovative development to empower the digital economy. Thank you. 

Shou Xiaoli:

Thanks to Mr. Luo Wen and all of the speakers, as well as our friends from the media for their participation. Today's briefing is hereby concluded. See you.

Translated and edited by Zhu Bochen, Guo Yiming, Zhou Jing, Li Xiao, Lin Liyao, Xu Xiaoxuan, Cui Can, Zhang Rui, Yan Bin, Liu Caiyi, Xu Kailin, Wang Wei, He Shan, Ma Yujia, Zhang Junmian, Yuan Fang, Huang Shan, Wang Yiming, Li Huiru, Liu Qiang, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speaker:

Mr. Fu Linghui, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 18, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is a regular briefing on China's economic data. Today, we are joined by Mr. Fu Linghui, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS. Mr. Fu will brief you on China's economic performance in the first quarter of 2023, and then take your questions.

Next, I'll give the floor to Mr. Fu.

Fu Linghui:

Friends from the media, good morning. I'm very glad to attend today's press conference. As usual, I will start by briefing you on the economic performance in the first quarter of this year, and then take your questions.

In short, China's national economy got off to a generally stable start in the first quarter.

In the first quarter, faced with the grave and complex international environment as well as arduous tasks to advance reform and development, and ensure stability at home, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, made economic stability the top priority, pursued progress while ensuring stability, fully and faithfully applied the new development philosophy on all fronts, accelerated efforts to foster a new development pattern, focused on promoting high-quality development, better balanced domestic and international imperatives, coordinated the COVID-19 prevention and control work with economic and social development, ensured both development and security, and gave priority to ensuring stable growth, employment and prices. As a result, a smooth transition in COVID-19 prevention and control to the new phase was secured in a relatively short time, production and demand registered a stable recovery, employment and prices were kept generally stable, residents' incomes continued to rise, market expectations saw a significant improvement, and the national economy got off to a good start.

According to preliminary estimates, the gross domestic product (GDP) in the first quarter reached 28,499.7 billion yuan, up by 4.5% year on year at constant prices, or up by 2.2% compared with the fourth quarter of 2022. By industry, the value added of the primary industry was 1,157.5 billion yuan, up by 3.7% year on year; that of the secondary industry was 10,794.7 billion yuan, up by 3.3%; and that of the tertiary industry was 16,547.5 billion yuan, up by 5.4%.

First, agricultural production was stable and animal husbandry grew steadily. 

In the first quarter, the value added of agriculture (crop farming) witnessed a year-on-year increase of 3.6%. The winter wheat growth was generally normal and the spring farming and preparations were carried out in an orderly manner. According to the year-round planting intention survey, the planting area intended for wheat, rice and corn nationwide was generally stable. In the first quarter, the output of pork, beef, mutton and poultry was 24.56 million metric tons, up by 2.5% year on year. Of this total, the outputs of pork, beef, mutton and poultry rose by 1.9%, 5.1%, 5.0% and 3.2%, respectively. The output of milk was up by 8.5% and that of eggs up by 2.8%. At the end of the first quarter, the number of pigs registered in stock was 430.94 million, up by 2.0% year on year; and 198.99 million pigs were slaughtered, up by 1.7% in the first quarter.

Second, industrial production recovered gradually and the expectations of enterprises improved generally.

The total value added of industrial enterprises above designated size grew by 3.0% year on year in the first quarter, 0.3 percentage point higher than that in the fourth quarter of 2022. In terms of sectors, the value added of mining increased by 3.2%, that of manufacturing increased by 2.9%, and that of production and supply of electricity, thermal power, gas and water increased by 3.3%. The value added of equipment manufacturing increased by 4.3%, 2.5 percentage points higher than that in the first two months. Analysis by ownership types showed that the value added of state holding enterprises was up by 3.3%; that of share-holding enterprises was up by 4.3%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was down by 2.7%; and that of private enterprises was up by 2.0%. In terms of products, the production of solar cells and new-energy vehicles increased by 53.2% and 22.5%, respectively. In March, the value added of industrial enterprises above designated size grew by 3.9% year on year, 1.5 percentage points higher than that in the first two months, or up by 0.12% month on month. In March, the Manufacturing Purchasing Managers' Index (PMI) stood at 51.9%, and the Production and Operation Expectation Index was 55.5%. In the first two months, the total profit of industrial enterprises above designated size was 887.2 billion yuan, down by 22.9% year on year.

Third, the service sector rebounded markedly and contact-intensive services grew quickly.

In the first quarter, the value added of services rose by 5.4% year on year, 3.1 percentage points higher than that in the fourth quarter of 2022. Specifically, the value added of accommodation and catering, information transmission, software and information technology services, financial intermediation, leasing and business services and wholesale and retail grew by 13.6%, 11.2%, 6.9%, 6.0% and 5.5%, respectively. In March, the Index of Services Production increased by 9.2% year on year, 3.7 percentage points higher than that in the first two months. Specifically, the Index of Services Production of accommodation and catering, information transmission, software and information technology services and transport, storage and post increased by 29.9%, 12.0% and 11.9%, respectively, which were 18.3 percentage points, 2.7 percentage points and 7.7 percentage points higher than in the first two months. In the first two months, the business revenue of service enterprises above designated size grew by 3.4% year on year. In March, the Business Activity Index for Services stood at 56.9%, and the Business Activity Expectation Index was 63.2%. Among these, the Business Activity Index for industries including retail, railway transportation, road transportation, air transportation and leasing and business services were above 60.0%.

Fourth, market sales recovered quickly and upgraded goods increased largely.

In the first quarter, the total retail sales of consumer goods reached 11,492.2 billion yuan, up by 5.8% year on year, and that in the fourth quarter of 2022 was down by 2.7%. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 9,966.4 billion yuan, up by 5.7%, and that in rural areas was 1,525.8 billion yuan, up by 6.2%. Grouped by consumption patterns, the retail sales of goods were 10,278.6 billion yuan, up by 4.9%; and the income from catering was 1,213.6 billion yuan, up by 13.9%. Goods for basic living sold well, with the retail sales of clothes, shoes, hats and textiles as well as of grain, oil and food by enterprises above designated size increasing by 9.0% and 7.5%, respectively. Sales of upgraded goods went up markedly. The retail sales of gold, silver and jewelry and of books, newspaper and magazines by enterprises above designated size grew by 13.6% and 13.4%, respectively. Online retail sales reached 3,286.3 billion yuan, up by 8.6%. Specifically, the online retail sales of physical goods were 2,783.5 billion yuan, up by 7.3%, accounting for 24.2% of the total retail sales of consumer goods. In March, the total retail sales of consumer goods went up by 10.6% year on year, 7.1 percentage points higher than that in the first two months, or up by 0.15% month on month.

Fifth, investment in fixed assets increased steadily and investment in high-tech industries grew quickly.

In the first quarter, investment in fixed assets (excluding rural households) reached 10,728.2 billion yuan, up by 5.1% year on year, the same as that of the previous year. Specifically, investment in infrastructure grew by 8.8% year on year; that in manufacturing grew by 7.0%; and that in real estate development declined by 5.8%. The floor space of commercial buildings sold reached 299.46 million square meters, down by 1.8%; and the total sales of commercial buildings were 3,054.5 billion yuan, up by 4.1%. By industry, investment in the primary industry increased by 0.5%, that in the secondary industry grew by 8.7%, and that in the tertiary industry rose by 3.6%. Private investment went up by 0.6%. Investment in high-tech industries grew by 16.0%, of which investment in high-tech manufacturing and high-tech services grew by 15.2% and 17.8%, respectively. In terms of high-tech manufacturing, investment in manufacturing of electronic and communication equipment as well as in manufacturing of medical equipment, measuring instruments and meters grew by 20.7% and 19.9%, respectively. In terms of high-tech services, investment in e-commerce services and services for transformation of scientific and technological achievements grew by 51.5% and 51.3%, respectively. Investment in social sectors grew by 8.3%. Specifically, investment in health and education grew by 21.6% and 6.2%, respectively. In March, investment in fixed assets (excluding rural households) declined by 0.25% month on month.

Sixth, imports and exports of goods kept growing and trade structure continued to be optimized.

In the first quarter, the total value of imports and exports of goods was 9,887.7 billion yuan, an increase of 4.8% year on year. The total value of exports was 5,648.4 billion yuan, up by 8.4%. The total value of imports was 4,239.3 billion yuan, up by 0.2%. The trade balance was 1,409.0 billion yuan in surplus. The imports and exports of general trade increased by 7.9%, accounting for 65.3% of the total value of imports and exports, 1.9 percentage points higher than that of the same period last year. Imports and exports by private enterprises grew by 14.4%, accounting for 52.4% of the total value of imports and exports. In March, the total value of imports and exports was 3,709.4 billion yuan, up by 15.5% year on year. The total value of exports was 2,155.2 billion yuan, up by 23.4%; and that of imports was 1,554.2 billion yuan, up by 6.1%.

Seventh, consumer prices rose mildly, and producer prices for industrial products dropped year on year.

In the first quarter, the consumer price index (CPI) rose by 1.3% year on year. The prices for food, tobacco, and alcohol went up by 2.9% year on year. Clothing prices went up by 0.7%. Housing prices went down by 0.2%. Articles and services for daily use went up by 1.2%. Transportation and communication prices went up by 0.1%. Education, culture, and recreation prices went up by 1.7%. Medical services and healthcare prices went up by 0.9%. Other articles and services prices went up by 2.7%. In terms of food prices, fresh fruit prices went up by 11%, pork prices went up by 8.5%, grain prices went up by 2.5%, and fresh vegetable prices went down by 2.9%. The core CPI, excluding food and energy prices, grew by 0.8% year on year. In March, the country's CPI went up by 0.7% year on year and down by 0.3% month on month.

In the first quarter, the producer prices for industrial products went down by 1.6% year on year. Specifically, the prices in March dropped by 2.5% year on year, and maintained the same level month on month. In the first quarter, the purchasing prices for industrial producers went down by 0.8% year on year. Specifically, in March, the prices dropped by 1.8% year on year, and maintained the same level month on month.

Eighth, employment was generally stable, and the surveyed unemployment rate in urban areas declined.

In the first quarter, the urban surveyed unemployment rate averaged 5.5%, down by 0.1 percentage point compared with the fourth quarter of last year. In March, the surveyed unemployment rate in urban areas was 5.3%, down by 0.3 percentage point compared with the previous month. The surveyed unemployment rate of population with local household registration was 5.1%, and that of population with non-local household registration was 5.6%, of which the rate of population with non-local agricultural household registration stood at 5.3%. Specifically, the surveyed unemployment rates of the population aged from 16 to 24 and from 25 to 59 were 19.6% and 4.3%, respectively. Among the population aged 25 to 59, surveyed unemployment rates of those with junior secondary school education or below, with senior secondary school education, with junior college education, or with university education or above were 4.8%, 4.8%, 4%, and 3.1%, respectively. The urban surveyed unemployment rate in 31 major cities was 5.5%, 0.2 percentage point lower than that of the previous month. Employees of enterprises worked 48.7 hours per week on average. By the end of the first quarter, the number of rural migrant workers totaled 181.95 million.

Ninth, residents' incomes increased steadily, and rural residents' incomes grew faster than those of urban residents. 

In the first quarter, the country's per capita disposable income was 10,870 yuan, a nominal growth of 5.1% year on year, which was 0.1 percentage point faster than that of the previous year; real growth was 3.8% after deducting price factors. In terms of permanent residence, the per capita disposable income of urban residents was 14,388 yuan, a nominal growth of 4% year on year and a real growth of 2.7%, while the per capita disposable income of rural residents was 6,131 yuan, a nominal growth of 6.1% year on year and a real growth of 4.8%. In terms of income sources, the country's per capita salary income, net business income, net property income, and net income from transfers grew by 5%, 5.8%, 4.1%, and 5.1% in nominal terms, respectively. The median nationwide per capita disposable income of residents was 8,895 yuan, with a nominal growth of 4.6% year on year.

Generally speaking, in the first quarter, the national economy showed a steady recovery and made a positive start. This was due to multiple policies and measures aimed at stabilizing growth, employment, and prices that took effect early on, exhibiting positive effects as COVID-19 prevention and control measures shifted to their new phase in a rapid and steady way. However, it's important to note that the international environment is still complex and volatile and that inadequate domestic demand remains prominent, meaning that the foundation for economic recovery is not yet solid. To address these challenges, we must take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, fully implement the guiding principles of the 20th CPC National Congress as well as the first and second plenary sessions of the 20th CPC Central Committee, act in line with the plans and arrangements made at the Central Economic Work Conference and the “two sessions,” make economic stability the top agenda, and pursue progress while ensuring stability. We must fully and faithfully apply the new development philosophy on all fronts, accelerate efforts to create a new pattern of development, strive to pursue high-quality development, implement macro policies in a scientific and targeted manner, and unleash the potential of domestic demand through a variety of means and channels. We must intensify efforts to deepen reforms, promote high-standard opening up, advance the overall improvement of economic performance continuously, and endeavor to achieve the effective enhancement of quality and reasonable growth so as to ensure a good start for building a modern socialist country in all respects.

Thank you.

Shou Xiaoli:

Thank you, Mr. Fu. The floor is now open for questions. Please identify the media organization you work for before asking your questions.

Shenzhen TV:

What contributed to a rebound in industrial production in the first quarter? What positive changes have emerged in industrial production and operation? Will industrial production continue to accelerate in the future? Thank you.

Fu Linghui:

Industrial production achieved steady growth in the first quarter. Since the beginning of this year, there have been several positive changes in industrial production, due to a rapid and stable shift of epidemic prevention and control measures, the implementation of policies for stabilizing growth, a rebound in market demand, and an accelerated recovery of industrial and supply chains. In the first quarter, the value added of industries above designated size increased by 3% year on year, an increase of 0.3 percentage point from the fourth quarter of last year. In March, it increased by 3.9%, an increase of 1.5 percentage points from the January-February period. There are several characteristics.

First, most industries have maintained growth. In the first quarter, of the 41 major industrial categories, 23 maintained year-on-year growth, accounting for over 50% of the total. Compared with the fourth quarter of last year, 20 industries saw rapid growth in their value added.

Second, equipment manufacturing has played a significant role in supporting industrial growth. As China advances its industry upgrading and strengthens the development of equipment manufacturing, industrial production has maintained relatively fast growth. In the first quarter, the value added of equipment manufacturing increased by 4.3% year on year, which was 1.3 percentage points higher than that of industries above designated size. Its contribution to the growth of industries above designated size reached 42.5%. Among them, the value added of electrical machinery, and railway and shipping industries increased by 15.1% and 9.3%, respectively.

Third, the raw material manufacturing industry grew rapidly due to steady economic recovery and stable investment growth. In the first quarter, the value added of raw material manufacturing increased by 4.7% year on year, which was 1.7 percentage points higher than that of industrial enterprises above designated size. Among them, the value added of the ferrous metal smelting and rolling processing industry and the non-ferrous metal smelting and rolling processing industry increased by 5.9% and 6.9%, respectively. In terms of products, the output of steel and 10 kinds of non-ferrous metals increased by 5.8% and 9%, respectively, in the first quarter.

Fourth, micro and small enterprises recovered their production. In the first quarter, the value added of micro and small enterprises above designated size increased by 3.1% year on year, and the growth rate was faster than that of all industrial enterprises above designated size. The questionnaire survey showed that the business climate index of micro and small industrial enterprises under designated size increased by 1.7 percentage points from the fourth quarter of last year, and the proportion of enterprises with good production and operation increased by 1.2 percentage points.

In addition, business expectations are higher. The manufacturing PMI has been above 50 for three consecutive months. Green products such as new-energy vehicles and solar cells have maintained double-digit growth, and the green transformation of industries has continued to grow.

But we must also remain clear-eyed about the complex and grim international environment, including uncertainties in external demand growth, constraints on and insufficiency of domestic market demand, industrial products' falling prices, and difficulties faced by companies. Going forward, we will continue to implement various policies and measures for stabilizing growth, focus on boosting domestic demand, deepen supply-side structural reform, upgrade traditional industries, foster and strengthen emerging industries, and push for a dynamic balance between supply and demand at a higher level and the healthy development of industries.

Thank you.

CCTV:

The Chinese economy has stabilized and rebounded in the first quarter of this year. What are the main features? What is your assessment of the economy in the first quarter? Thank you.

Fu Linghui:

I know there is a lot of interest in China's economic performance in the first quarter. Since the beginning of this year, all regions and government departments have thoroughly implemented the decisions and plans of the Central Committee of the Communist Party of China and the State Council, given priority to stability, sought progress while maintaining stability, promoted high-quality development, and made great efforts to ensure steady growth, employment, and prices. We have adopted proactive and effective macro policies, and made steady and quick shifts in terms of epidemic prevention and control. Work and life have been returning to normal at a faster pace, production and demand have stabilized and rebounded, jobs and prices have become basically stable, business expectations have significantly improved, positive factors have been cumulatively increasing, and the economy has gotten off to a good start. The main features are as follows.

First, economic growth has stabilized and rebounded. In the first quarter, GDP grew by 4.5% year on year, 1.6 percentage points higher than that of the fourth quarter of last year and 2.2% up from the previous quarter. It has grown faster than in the past. Agriculture has maintained steady growth. Preparation for spring planting has been advancing in an orderly manner. Animal husbandry has grown steadily, and agricultural production has remained stable. In the first quarter, the value added of agriculture, forestry, animal husbandry, and fisheries increased by 3.8% year on year, and the output of pork, beef, mutton, and poultry meat increased by 2.5%. Industrial production has recovered steadily. In the first quarter, the value added of industrial enterprises above designated size increased by 3% year on year, 0.3 percentage points higher than that in the fourth quarter of last year. The service sector has witnessed a marked rebound in growth rate. In the first quarter, the value added of the service sector grew 5.4% year on year, 3.1 percentage points higher than that in the fourth quarter of last year. The service sector, with face-to-face engagements among a significant number of people, previously hit hard by COVID-19, has especially recovered very fast.

Second, domestic demand has been expanding. Market sales have turned to increase. More opportunities and greater expectations to spend have driven market sales to expand and consumer spending in the service sector to rebound notably. In the first quarter, the total retail sales of consumer goods rose 5.8% from a year earlier, compared with a 2.7% decrease in the fourth quarter of last year. Retail sales in the service sector have demonstrated a good recovery momentum, of which catering revenue rose 13.9%. Investment has grown steadily. In the first quarter, fixed asset investment increased by 5.1% year on year, on par with the whole of last year. Among them, infrastructure investment and manufacturing investment grew by 8.8% and 7%, respectively.

Third, jobs and prices have remained basically stable. The employment situation has improved. In the first quarter, the surveyed urban unemployment rate averaged 5.5%, down 0.1 percentage points from the fourth quarter of last year. The surveyed urban unemployment rate in March was 5.3%, down 0.3 percentage points from February. Consumer prices rose moderately, and the supply of goods and services in the market was on the whole sufficient. In the first quarter, consumer prices rose by 1.3% year on year, maintaining a moderate rise. Excluding food and energy, the core CPI rose 0.8% year on year, unchanged from that of the first two months and thus basically stable.

Fourth, solid progress has been made in high-level opening up. We have vigorously stabilized and improved foreign trade, and actively expanded trade with emerging markets and developing countries, including those along the Belt and Road. China's foreign trade has continued to show its resilience. In the first quarter, China's trade volume of goods increased by 4.8% year on year, and the trade volume of goods with countries along the Belt and Road increased by 16.8% year on year, a rapid growth. China's foreign trade has shown its resilience in a complex and grim external environment. In the first two months, China's actual use of foreign capital increased by 6.1%, among which, that of high-tech industries increased by 32%.

Fifth, transformation and upgrading have continued, and new drivers of growth have continued to grow. In the first quarter, investment in high-tech industries grew by 16% year on year, significantly outpacing overall investment growth. In the first quarter, online retail sales of physical goods increased by 7.3% year on year, accounting for 24.2% of the total retail sales of consumer goods. Green and low-carbon products have grown rapidly. In the first quarter, the output of new-energy vehicles and solar cells increased by 22.5% and 53.2%, respectively. Consumer spending has shown a significant leading role. In the first quarter, the contribution of final consumption expenditure to economic growth reached 66.6%, higher than that of gross capital formation.

Sixth, market vitality has been growing, and expectations of business entities have improved. In March, manufacturing PMI was 51.9%, staying above 50% for three months consecutively. The non-manufacturing business activity index was 58.2%, up 1.9 percentage points from the previous month and reaching a relatively high level in recent years, and the business activity index of the service sector rose to 56.9%. People flow and logistics have gained steam. In the first quarter, cargo volume increased by 5% year on year, and passenger volume increased by 26.3%. Railway passenger volume and civil aviation passenger volume increased by 67.7% and 68.9%, respectively. The operation performance of small and micro businesses has improved. In the first quarter, the value added of small and micro enterprises above the designated size increased by 3.1%, faster than the growth of all industrial enterprises above the designated size, and the index gauging the prosperity of small and micro enterprises picked up from the fourth quarter of last year.

It is not easy to make such progress in a complex and grim international environment, and it is important to see that the external environment is complex, the global economy is markedly slowing, there are a lot of factors of instability and uncertainty, and despite the recovery and rebound, the domestic economy still faces an obvious lack of demand and prominent structural issues, which requires us to further consolidate the foundation for a rebound. Going forward, we will fully implement the guiding principles of the Central Economic Work Conference and the plans in the Government Work Report, adhere to the general principle of seeking progress while ensuring stability, implement macro policies in a systemic and targeted way, unleash the potential of domestic demand, deepen reform, opening up, and innovation, push for a sustained overall economic recovery, and strive for improvements in quality and growth in quantity.

Thank you.

Market News International(MNI):

China's exports were strong in March, better than expected. Do you think this strong momentum is sustainable?

Fu Linghui:

Thank you for your question. Since this year, China's imports and exports have maintained sustained growth, following last year's good performance. It was not easy. In the first quarter, the total import and export of goods grew 4.8% year on year, of which exports grew 8.4%, maintaining a relatively fast growth. It was not easy to achieve such growth in the context of slowing world economic growth and greater external uncertainties. In the next stage, China's import and export growth is facing certain pressure, mainly in the following ways: First, the world economy is growing weakly. According to the IMF forecast, the global economy is expected to grow by 2.8% in 2023, a significant drop from last year's growth rate. According to the latest WTO forecast, the volume of global merchandise trade will grow by 1.7% in 2023, which is significantly lower than last year. Second, external uncertainty is relatively large. Inflation levels in the U.S. and Europe have been relatively high so far this year, and monetary policies have continued to tighten. Recently, some bank liquidity crises in the United States and Europe have been exposed, which has increased the instability in economic operations. At the same time, geopolitical risks still exist. Rising unilateralism and protectionism have also exacerbated instability and uncertainty in global trade and economy.

Despite these pressure and challenges, China's foreign trade is resilient and dynamic. With various policies stabilizing foreign trade, the year is expected to achieve its goal of promoting stability and improving quality. First, China's industrial system is relatively complete, the supply chain is relatively strong, and it can adapt to changes in the foreign demands. Second, China insists on expanding opening up to the outside world and constantly expanding foreign trade. In the first quarter, China's imports and exports with countries along the Belt and Road grew by 16.8%, and imports and exports with other RCEP member countries grew by 7.3%, of which exports grew by 20.2%. Third, China's foreign trade has increasingly been driven by new growth momentums. Recently, the General Administration of Customs press conference also mentioned the first quarter growth of 66.9% in exports of electric passenger cars, lithium batteries, and solar cells. Cross-border e-commerce and other new business forms in foreign trade also grew relatively fast. Going forward, the policies designed for stabilizing foreign trade will continue to show results, which is conducive to achieving the goal of promoting stability and improving the quality of foreign trade throughout the year. Thank you.

Reuters:

Production data were satisfactory back in March, and production has now returned to pre-epidemic levels. However, consumption remains sluggish, leading to an uneven economic recovery. Will new policies be introduced to balance this situation? What will it take to convince Chinese consumers to spend more instead of putting more money in the bank?

Fu Linghui:

Thank you for your questions. From the situation in the first quarter, consumption growth has rebounded significantly. Since this year, with epidemic prevention and control making a quick and smooth transition to a new stage, pro-consumption policies have continued to pay dividends, and sales have rebounded significantly. In particular, the improvement in service consumption is more obvious. Consumption played a greater role in driving economic growth. As we have talked about, the contribution of the final consumption to economic growth in the first quarter reached 66.6%, a significant rebound over the whole of last year. Among the three major demands, consumption demand has become the most significant factor for driving economic growth. From the perspective of sales, total retail sales of consumer goods in the first quarter rose 5.8% year on year, compared with a 2.7% decline in the fourth quarter of last year, which indicates that consumption is gradually rebounding and improving.

From the main features, first, the service consumption rebounded significantly. As the impact of the epidemic gradually receded, consumption scenarios increased, and offline consumption grew quickly with residents going out for dining, entertainment and travel. In the first quarter, the catering sector saw the revenue increasing by 13.9% year on year. In the same period, the year-on-year nominal growth of national per capita consumption expenditure on services were 6.2%, significantly higher than that of national per capita consumption expenditure in total, and the national consumption expenditure on services' proportion in the national consumption expenditure in total was 0.3 percentage points higher year on year. 

Second, the growth of merchandise sales showed a positive trend. With the gradual release of consumer demand, the accelerated growth of upgraded consumption, and the continued growth of consumption required by basic living, a steady rebound has been seen in commodity sales. In the first quarter, retail sales grew by 4.9% year on year, compared with a 1.7% decline in the fourth quarter of last year. Among businesses above designated size, nearly 70% of the 18 categories of goods saw year-on-year growth in the value of retail sales. The retail sales of grain, oil, and foodstuff, and garments, footwear, hats, and knitwear, namely goods for basic living, increased by 7.5% and 9% year on year, respectively. Retail sales of gold, silver and jewelry, and cosmetics, namely nonessentials, increased by 13.6% and 5.9%, respectively.

Third, the growth of online and offline consumption accelerated. With the improvement in circulation, online consumption continues to develop in a good direction. In the first quarter, the online retail sales of physical goods grew by 7.3% year on year, continuing to maintain rapid growth. At the same time, with the recovery of offline consumption, the retail sales of physical stores gradually improved. In the first quarter, retail sales in physical stores above designated size increased by 3.6% year on year, with the growth rate 3.2 percentage points higher than in January and February.

Fourth, the propensity of residents to consume has rebounded. As the economy stabilized and rebounded, the employment situation gradually improved, the consumption scenarios continued to increase, and residents' confidence in consumption improved, which led to a rise in the average propensity to consume. In the first quarter, the national average propensity to consume was 62%, an increase of 0.2 percentage points over the same period last year.

In general, overall consumption has restored the good momentum. But we note that consumer spending needs to be further encouraged. Going forward, we must use every possible means to increase people's incomes, and work actively to increase supply quality to effectively combine expanding consumption with supply-side structural reform, which will unleash consumption potential, promote economic development and improve people's wellbeing. Thank you.

Nikkei: 

My question is about the CPI. China's core CPI rose 0.7% in March from a year earlier. Despite the Chinese economy having started to recover after adjusting the COVID-19 response, the year-on-year increase in the core CPI is still low. How does the NBS view the main reasons for the stagnant core CPI? Is China's economy at risk of deflation? Thank you.

Fu Linghui: 

Prices are an important concern among the public. There has been a lot of discussion recently about whether China's economy is heading for deflation. Generally speaking, the Chinese economy has not experienced deflation at present, and there will be no deflation in the next stage. Deflation is internationally defined as a sustained decline in the general level of prices, often accompanied by a reduction in the money supply and economic recession. However, judging from the economic performance in the first quarter in China, consumer prices increased 1.3% year on year, maintaining a moderate rise. In terms of money supply, the M2 money supply soared 12.7% at the end of March, maintaining a relatively high rate of growth. In terms of economic growth, China's economy grew by 4.5% in the first quarter, up from the fourth quarter of last year. There is no deflation on the whole.

We have also seen falling CPI growth in the first quarter of this year. What's the reason for the drop? It is mainly affected by some time-related factors.

First, it is due to seasonal factors. Following the Chinese Lunar New Year, which fell in January this year, prices generally drop as demand declines.

Second, some food prices have fallen. As it gets warmer, supplies of fresh vegetables have increased substantially, with prices dropping both month on month and year on year. Thanks to this year's adequate hog supplies and reduced post-holiday consumer demand, pork prices have fallen. All these have led to a decline in the CPI. 

Third, energy prices have decreased. For China's CPI, energy prices have fluctuated with the international market. Since the beginning of this year, the global economy has slowed, and prices on the international energy market, especially the crude oil market, have dropped on the whole, leading to lower domestic energy prices. In March, gasoline and diesel prices fell 6.6% and 7.3% respectively from a year earlier.

Fourth, prices of cars, especially fuel-powered cars, have dropped. Due to the expiration of automobile subsidy policies and an adjustment to emission standards, automakers have recently increased discounts. In March, fuel-powered car prices fell 4.5% from a year earlier. All these factors have affected the change in prices.

Fifth, due to the impact of geopolitics and the COVID-19 pandemic, the price base was relatively high in the same period of last year. These factors have led to a decline in the growth of CPI prices year on year.

Although CPI prices have fallen, supply and demand remained basically stable. Excluding food and energy, the core CPI rose by 0.8% year on year in the first quarter, flat from January to February, and rising 0.2 percentage points from the fourth quarter of last year. In terms of service prices, the first quarter saw a year-on-year increase of 0.8%, up by 0.3 percentage points over the fourth quarter of last year. In terms of broader price levels, the CPI mainly measures price changes in the consumer sector. If we look at price changes in the economy, we should also consider GDP deflators, which posted slight growth in the first quarter of this year, picking up from the fourth quarter of last year. If all these are taken into consideration, there is no deflation. 

Going forward, prices will recover steadily, and prices' driving role will gradually strengthen. The so-called deflation will not appear. In terms of price performance, due to the high price base of last year, and the high rise in international commodity prices, as well as tight domestic supply affected by the COVID-19 pandemic, the CPI increase was relatively high in the second quarter of last year. As a result, the CPI increase in the second quarter of this year may remain low, but this does not mean there is deflation. As the influencing factors will gradually disappear in the second half of the year, prices will return to a reasonable level.

Yicai:

What's your opinion on the investment data in the first quarter? Private investment has been low for some time, registering growth of only 0.6% in the first quarter. What are the reasons for this?

Fu Linghui:

The issue of investment has raised much attention. On the whole, China is still the largest developing country in the world. There is still a big gap between our per capita capital stock and that of developed countries. More investment is needed to address unbalanced and inadequate development, break through bottlenecks in science and technology, accelerate innovation-driven development, and promote high-quality development.

Since the beginning of this year, China has continued to expand domestic demand and give full play to the key role of investment in improving the supply structure. We have increased investment in key fields and at key links, and are actively working to expand investment in areas that are important to people's wellbeing so as to ensure and improve their lives. Steady investment growth has played a positive role in driving economic growth. In the first quarter, fixed asset investment rose by 5.1% year on year, strengthening the basis for sustained growth. Investment in China has the following characteristics:

First, manufacturing investment has experienced rapid growth. The size of China's manufacturing industry has ranked first in the world for many years and is the cornerstone of our industrial development, boasting strong competitive advantages. However, there are still many shortcomings in certain key areas. China's manufacturing industry has huge potential to transform and upgrade amid a new wave of scientific and technological revolution and industrial transformation. China places great importance on the manufacturing industry's development and actively supports manufacturing innovation. Since the beginning of this year, manufacturing investment has sustained a rapid growth rate, with a year-on-year increase of 7% in the first quarter, significantly faster than total investment growth. Specifically, investment in high-tech manufacturing grew by 15.2%.

Second, infrastructure investment has grown rapidly. While China has made remarkable progress in infrastructure construction, we still need to speed up efforts to address the disparities in infrastructure between rural and urban areas. We must strengthen our weaknesses in the areas of transportation, water conservation and energy. With the expansion of digital, intelligent and green development, there is a growing demand for new infrastructure, such as 5G networks, charging facilities and big data centers. This year, we actively advanced infrastructure construction and achieved positive results. In the first quarter of this year, China's infrastructure investment grew by 8.8% year on year, bolstering the momentum for sustainable development in the future.

Third, investment in people's livelihoods has increased. China attaches great importance to ensuring and improving people's livelihoods. In recent years, we have consistently increased spending on improving people's living standards to promote people's well-being. This year, investment in the social sectors maintained rapid growth, with a year-on-year increase of 8.3% in the first quarter. Notably, health investment grew by 21.6%, which will help protect people's health.

Generally, this year, China's investment has sustained steady growth, and its structure has continued to be optimized, benefiting both economic growth and long-term development. However, we should note that the steady growth of investment still faces some constraints. In the next phase, we will focus on improving the quality of investment and promoting high-quality economic development, considering both the present and long-term benefits.

Regarding the issue of private investment, there are many influencing factors, and one of the major aspects is the adjustment of the real estate market. Private investment in real estate development declined by 13.8% in the first quarter, dragging down the rate of increase in private investment by 5 percentage points. Of course, private investment also faces other constraints, such as the downward slide in corporate performance and unstable market expectations. Overall, actively improving the market environment and increasing support for private enterprises will help stabilize private investment. Thank you.

ITAR-TASS: 

We understand that the contribution of China's consumption to GDP growth declined during the pandemic. What's the situation like now? What are the predictions from NBS? Thank you

Fu Linghui:

Thank you for your question. This year, the contribution of consumption to economic growth has rebounded markedly. In the first quarter, the contribution of final consumption to GDP growth reached 66.6%, a significant rebound over the whole of last year. Going forward, consumption is expected to continue to play a leading role in driving economic growth. First, gradual economic recovery has improved employment, and the surveyed urban unemployment rate dropped significantly in March. This will in turn help increase personal incomes and boost capacity for consumption. Meanwhile, as the impact of the epidemic recedes and consumption scenarios expands, consumption will continue to increase. From the perspective of medium- and long-term development, China's per capita GDP reached $10,000 and consumer needs are rapidly increasing, and the long-term consumption outlook is promising. Taking these factors into consideration, consumption will play a stronger role in driving economic growth. Thank you.

Kyodo News:

What is the economic outlook for the second quarter? Will the economic data improve in the second quarter of this year? What are the major risks?

Fu Linghui:

People are most concerned about the situation in the next stage. So far this year, the Chinese economy has shown encouraging recovery momentum. The main indicators have stabilized and picked up, the vitality of business entities has increased, and market expectations have improved notably, laying a solid foundation for achieving the country's annual growth target. In the next stage, we expect the internal forces powering economic growth to strengthen gradually. We also expect macro policies to exert an obvious effect and overall economic performance to improve. Considering that the second quarter of last year was affected by the epidemic and forms a low base for comparison, economic growth in the second quarter this year is likely to be significantly faster than in the first quarter. However, due to higher comparison bases, growth might be slower in the third and fourth quarters than in the second quarter. Without considering the base effect, economic growth throughout the year will likely trend upward. The main underpinning factors are as follows:

First, the role of consumption in driving economic growth is gradually increasing, and the trend of consumption rebounding has been evident since the beginning of this year, enhancing its driving contribution to economic growth. As mentioned earlier, the contribution rate of final consumption to economic growth has increased compared to last year. With the improvement of the employment situation, the effectiveness of policies aimed at boosting consumption, and the increase in consumption scenarios, residents' consumption capacity and willingness to spend are expected to increase. At the same time, policies to actively increase spending on big-ticket items such as new energy vehicles and green and smart home appliances, to promote the integration of online and offline consumption, to develop new forms and models of consumption, and to accelerate the quality improvement and expansion of rural markets, are all conducive to the sustained growth of consumption, which in turn drives economic growth.

Second, stable growth in investment is expected to continue. Since the beginning of this year, all localities have actively advanced the construction of major projects, resulting in overall steady growth in investment. Fixed-asset investment grew by 5.1% in the first quarter. Going forward, traditional industries will continue to undergo transformation and upgrading, emerging industries will continue innovation and development, and support for the real economy is increasing, all of which are favorable for investment growth. In the first quarter, investment in manufacturing grew by 7%, outpacing overall investment growth. In the coming stage, in line with major national strategies and the 14th Five-Year Plan, we will focus our efforts on promoting infrastructure investment, aiding the further expansion of investment. In the first quarter, infrastructure investment grew by 8.8%, faster than overall investment growth. Moreover, as people's demand for buying homes or improving their housing situation increases, we have seen positive changes in real estate sales. Consequently, investment in real estate development is expected to gradually stabilize.

Third, the driving force of industrial transformation and upgrading has been enhanced. China has been fully implementing an innovation-driven development strategy, boosting its strategic scientific and technological strength, and promoting industrial upgrading and development. Technologies such as 5G networks, information technology, and artificial intelligence have developed rapidly, and new industries continue to emerge. In the first quarter, the added value of the equipment manufacturing industry increased by 4.3%, and the industrial technology intensity steadily increased. At the same time, the green and low-carbon transformation of the energy mix is accelerating, demands for new products are expanding, and more traditional industries are carrying out energy-saving and consumption-reducing transformation, all of which also enhance the driving effect. In the first quarter, the production of new energy vehicles and solar cell products maintained rapid growth. The industries' high-end, intelligent, and green development will inject new impetus into China's economic development.

Fourth, macro policies have continued to demonstrate their effectiveness. Since the beginning of this year, all localities and departments have fully implemented the guiding principles of the Central Economic Work Conference and the arrangements of the government work report. They have pursued a proactive fiscal policy with greater intensity and enhanced its performance while ensuring prudent monetary policies are precise and effective. They have focused on efforts to stabilize economic growth, employment, and prices. The policy effects have continued to emerge, and the economy's operation stabilized and rebounded in the first quarter.

In the next stage, as various decisions and arrangements made by the CPC Central Committee and the State Council are further implemented in detail, policy effects will become more evident. China's economic development momentum will continue to grow, promoting the recovery and improvement of economic operations.

Thank you.

ThePaper.cn:

Currently, China's PPI has experienced six consecutive months of negative year-on-year growth. How does the NBS view this trend of PPI? Thank you.

Fu Linghui:

There is much concern over PPI. While CPI's year-on-year increase has slowed this year, PPI's decrease has expanded. In the first quarter, PPI fell by 1.6% year on year, with a 2.3% decrease in production material prices being the main factor for the decline. The expansion of the year-on-year decline in PPI is due to two main factors. Firstly, it is influenced by imported factors from the international environment. Since the beginning of this year, the growth of the global economy has slowed down, market demand has weakened, supply bottlenecks have eased, and the prices of bulk commodities have fallen, leading to a decrease in the prices of related products in domestic industries such as petroleum and nonferrous metals. In the first quarter, prices in the nonferrous metal industry fell by 5.9% year on year, while prices in the petroleum and natural gas extraction industry fell by 5.3%. Secondly, the high base figure from the same period last year is also a factor. The international bulk commodity prices rose sharply last year, affected by geopolitical conflicts and the COVID-19 pandemic, and the domestic supply was tight due to the pandemic, which led to a year-on-year increase of 8.7% in PPI in the first quarter of last year. The relatively high base figure also affects PPI trends this year.

From the perspective of month-on-month changes, PPI has been relatively stable this year. In January, PPI fell by 0.4% compared to the previous month, while in February and March, it remained stable. The main factors are, on the one hand, the recovery of domestic market demand, which has led to a month-on-month increase in the prices of investment goods such as steel and cement. In March, the prices of steel and cement both increased by 1.3% compared to the previous month. On the other hand, prices in the petroleum extraction and nonferrous metal industries decreased by 0.9% and 0.3% month on month, respectively, under the influence of imported factors from the international market. Meanwhile, due to seasonal factors, the demand for coal has decreased, and the prices in coal mining and washing industries fell by 1.2% month on month. Under the combined influence of these factors, PPI has remained stable month on month.

Going forward, overall domestic demand is starting to rebound, which has a certain upward effect on PPI. However, the transmission of international commodity prices still exists and coupled with the high base figure from the same period last year, PPI may remain in a downward range in the short term. Nevertheless, as the domestic economy recovers and the base effect gradually diminishes, PPI will gradually return to a reasonable level. Thank you.

Voice of China, China Media Group:

Since the beginning of this year, the service industry has rebounded at a faster pace. What are the primary reasons for that? How do you interpret such a rebounding momentum? What's your prediction for the service industry's growth prospects in the next phase? Thank you.

Fu Linghui:

Since the beginning of this year, the rebound of the service sector has been a highlight of economic performance. As a crucial component of the national economy, the service sector accounts for more than half of the Chinese economy. In recent years, the growth of the service sector has slowed due to COVID-19 and other factors, having an adverse impact on economic growth and employment. As the effect of the pandemic has gradually ceased since the beginning of this year, policies to stabilize growth have taken effect at a faster pace. Meanwhile, production and life have returned to normal. The demand for services, especially contact-and-gathering-based services, has been unlocked more rapidly, and the growth of the service sector has markedly rebounded, providing strong support for economic growth and creating more jobs.

In the first quarter, the value-added output of the service sector rose by 5.4% year on year, up 3.1 percentage points from the last quarter. The service sector's contribution to economic growth reached 69.5%, becoming a key factor in supporting economic growth. In terms of structure, first, contact-and-gathering-based services rebounded rapidly. The notable increase in people's consumption of catering, shopping, tourism, and accommodation has led to growth in the relevant service sectors. In the first quarter, the value-added output of the wholesale and retail sector increased by 5.5% year on year, 5.2 percentage points higher than in the last quarter. Additionally, the value-added output of the accommodation and catering sector was up 13.6%, while the value-added output in the fourth quarter of last year was down 5.8%.

Second, the transportation sector has recovered rapidly. As production and life have returned to normal, the flow of goods and people has increased significantly. The growth in travel and transportation-related sectors has sped up. In the first quarter, the value-added output of the transportation, storage and postal service sector increased by 4.8% year on year, while in the fourth quarter of last year, it had decreased by 3.9%.

Third, the modern service sector has demonstrated sound growth momentum. With the rapid development of the digital economy in China, the demand for information technology has been expanding, which has driven rapid growth in relevant sectors of information services. In the first quarter, the value-added output of the information transmission, software and information technology service sector grew by 11.2% year on year, notably higher than the growth rate of the entire service sector. At the same time, the financial sector has kept strengthening its efforts to serve the real economy and actively satisfied the reasonable financing needs of enterprises, which has resulted in growth of value-added output in the financial sector. In the first quarter, the value-added output of the financial sector increased by 6.9% year on year.

With the rapid rebound in the service sector, enterprises' expectations in the service sector have improved markedly. Since the beginning of this year, the business activity index for services has stayed within the expansion range for three consecutive months, with the index in March standing at 56.9%, 1.3 percentage points higher than that in February, suggesting a favorable expansion trend in the service sector. The service sector has a large capacity for employment, and the recovery in the service sector will positively affect stabilizing and expanding employment.

However, we should also notice that the rebound in the service sector is still primary and in the recovery process. The foundation is not yet solid. In the next phase, we will work on expanding domestic demand, boosting personal incomes, improving the environment for consumers, and increasing the supply of quality services to promote the healthy development of the service sector. Thank you.

Shou Xiaoli:

Due to time constraints, one last question, please.

The Beijing News:

Two figures in this year's employment season have received wide attention. The number of college graduates nationwide in 2023 is expected to reach 11.58 million. Additionally, the number of doctoral graduates and master's graduates will surpass the number of university graduates for the first time this year in Beijing. Based on the statistics from the first quarter of 2023, what's your opinion on the prospects for this year's job market?

Fu Linghui:

Employment is the cornerstone of well-being and is of great concern to people. According to this year's statistics, overall employment has improved. Based on our monitoring, workforce participation in the job market has risen steadily since the beginning of this year. The unemployment rate in March decreased markedly. Total employment increased from the same period last year, with year-on-year and month-on-month increases. With the economy's recovery, the level of activity in the job market has increased gradually. Regarding the unemployment rate, the surveyed urban unemployment rate nationwide in March was 5.3%, down a 0.3 percentage points from the previous month. The main features are as follows:

First, the unemployment rate in most of the labor market has dropped markedly. As the economy rebounds, enterprises need more labor, and the number of market entities in active operation has been growing, contributing to the improvement in employment. In March, the unemployment rate among those aged between 25 and 59 was 4.3% and fell by half a percentage point from the previous month, lower than the same period in 2019.

Second, the employment of rural migrant workers has improved at a faster pace. Since the beginning of this year, the number of rural migrant workers nationwide has continued to increase. Under the joint influence of economic recovery and pro-employment policies, the employment rate of migrant workers has improved notably. In March, the unemployment rate of rural migrant workers stood at 5.3%, down a 0.7 percentage points from the previous month. The construction, wholesale, and retail sectors, where many rural migrant workers are employed, have recovered well, playing a significant role in driving the employment of rural migrant workers.

Third, the unemployment rate in large cities has dropped steadily. Affected by the epidemic last year, the unemployment rate in 31 large cities stayed at a relatively high level. Since the beginning of this year, the unemployment rate in 31 large cities has decreased as the economy has improved. In March, the surveyed unemployment rate in 31 large cities dropped to 5.5%.

However, we should also acknowledge that the youth unemployment rate has increased. In March, the unemployment rate of young people aged 16 to 24 was 19.6%, up 1.5 percentage points from the previous month. Structural employment problems are prominent. The youth unemployment rate is rising because this year's fresh college graduates have started entering the labor market to seek employment. 

In the next stage, although the youth unemployment rate is rising, it is expected to gradually improve as the economy recovers and the demand for labor expands. This year, among those aged 25 to 59, the majority of the labor market, the unemployment rate is lowest for those who have received higher education. That implies that as college graduates enter the labor market, the youth unemployment rate will gradually decrease, and the overall situation will improve. Generally speaking, the positive momentum of employment is expected to continue. Of course, we should also pay attention to certain structural problems, such as the youth unemployment rate, and efforts should be made to strengthen support for the employment of young people, especially college graduates. This will promote the sustained improvement of employment. We should also move faster to upgrade industries to provide more high-quality jobs.

Thank you.

Shou Xiaoli:

Thanks to Mr. Fu Linghui and friends from the media. Today's briefing is now concluded. Goodbye.

Translated and edited by Wang Yiming, Wang Qian, Cui Can, Wang Wei, Zhang Jiaqi, Zhou Jing, Liu Caiyi, Liu Sitong, Duan Yaying, Dong Qingpei, Yuan Fang, Zhang Rui, Huang Shan, Xu Kailin, Wang Yanfang, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA)

Mr. Liang Changxin, director general of the Comprehensive Affairs Department of the NEA and spokesperson of the NEA

Mr. Liu Deshun, director general of the Department of Energy Conservation and Scientific and Technological Equipment of the NEA

Mr. Li Chuangjun, director general of the Department of New Energy and Renewable Energy Sources of the NEA

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 12, 2023

Xing Huina:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 13th press conference in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA), to brief you on fully implementing the guiding principles of the 20th CPC National Congress and advancing the high-quality development of China's energy sector, and to take your questions. Also present today are Mr. Liang Changxin, director general of the Comprehensive Affairs Department of the NEA and spokesperson of the NEA; Mr. Liu Deshun, director general of the Department of Energy Conservation and Scientific and Technological Equipment of the NEA; and Mr. Li Chuangjun, director general of the Department of New Energy and Renewable Energy Sources of the NEA.

Now, let's give the floor to Mr. Zhang for his introduction.

Zhang Jianhua:

Thank you, Ms. Xing. Ladies and gentlemen, good afternoon. I am very glad to meet with friends from the media and to brief you on the energy sector.

The CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to energy-related work. The 20th CPC National Congress developed a strategic plan for comprehensively promoting national rejuvenation through a Chinese path to modernization and set clear requirements for high-quality energy development. The energy sector has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly studied and implemented the guiding principles of the 20th CPC National Congress, and stepped up efforts to introduce new policies and measures. The energy sector has taken the approach of "sprinting and fighting a decisive battle from the very beginning," aiming to bolster and empower socio-economic development and provide strong energy guarantees for high-quality development and Chinese modernization. 

This year marks the start of fully implementing the guiding principles of the 20th CPC National Congress. Since this year, work and life in China have recovered at a faster pace, the growth rate of industrial energy consumption has increased significantly, energy consumption has grown slightly, and national energy supply and demand have been stable on the whole. The energy sector will focus on the five aspects of energy security guarantees, clean and low-carbon transition, self-reliance and strength in science and technology, institutional innovation, and enhancing international cooperation to fully promote high-quality energy development. 

First, we will commit ourselves to consolidating energy security guarantees. We will always take ensuring national energy security as the most important mission and task, and base our work on the country's resource endowment in accordance with the principle of building the new before discarding the old. On one hand, we will make fossil fuels better meet the basic energy needs, let coal play a bigger role as an anchor of the sector, and make greater efforts to explore and develop petroleum and natural gas, discover more untapped reserves, and increase production. In this way, we aim to ensure that the country's annual crude oil output can long remain at the level of 200 million metric tons and that the self-sufficiency rate of natural gas shall not be less than 50%. We will also strengthen the underpinning and adjusting role of coal power. On the other hand, we will make non-fossil fuels a safer and more reliable alternative, and form a diversified clean energy supply system integrating wind, solar, biomass, nuclear and hydrogen energy and hydropower. We will advance the flexible transformation of coal power, and accelerate the construction of pumped power storage, peak regulation of natural gas and electricity usage, and new-type power storage facilities. We will boost the transformation and upgrading of the power distribution grid, support a high proportion of new energy's access to the power grid, and spare no efforts to peak carbon emissions and achieve carbon neutrality. At the same time, we will improve the energy security supervision and warning system, establish an energy security accountability mechanism, strengthen security risk management for large power grids, increase the ability of security risk prevention and emergency management, and go all out to ensure people's livelihoods in terms of having energy supply meet peak demand during summer and winter, adopting clean energy sources for winter heating in northern China, rural energy consumption, and charging infrastructure construction.

Second, we will accelerate the reform of energy consumption models. Our focus is on achieving "three transformations." The first is transforming the energy structure. We will strive to increase the share of non-fossil energy consumption by 1 percentage point annually over the next five years, ensure that 80% of newly added electricity will come from non-fossil fuels by 2035, and make non-fossil fuels the main source of energy by the middle of this century. The second is transforming energy systems and forms. We will accelerate the planning and development of a new-energy system, build a new type of power system, and promote the use of electricity in key areas. We will guide big data centers and industrial interruptible loads, among others, to participate in regulating the power system, and develop non-electric applications of renewable energy according to local conditions. The third is transforming the energy layout. In principle, the proportion of newly built power transmission channels for renewable energy should not be lower than 50%. We will speed up the development of distributed energy resources, coastal nuclear power and offshore wind power, so as to achieve coordinated development of energy "from afar" and "from nearby."

Third, we will accelerate our efforts to promote self-reliance and self-improvement in energy science and technology, adhering to innovation-driven development. Through implementing mechanisms such as a ranking system and a competitive selection process for choosing the best candidates to lead key research projects, we will actively cultivate core industrial chains and key links, continuously enhance our independent innovation capabilities, increase the self-reliance of major technical equipment, and better control risks. This will make industrial energy chains and supply chains more resilient and secure. We will foster the in-depth integration of energy innovation, industrial, financial, talent and data chains, advancing digital and smart energy development, with the aim of building high-end and modernized energy industrial value chains.

Fourth, we will improve and unleash the vitality of energy systems and mechanisms. Building on the foundation of the rule of law, we will accelerate the formulation of energy legislation and the revision of the Electric Power Law, the Coal Industry Law and the Law on Renewal Energy. Driven by reforms, we will establish a unified electric power market system adapted to new types of electric power systems, fully leveraging the decisive role of the market in resource allocation and eliminating barriers to system access, market transactions, and other aspects of emerging business forms and models. By leveraging supervision, we will forge a market of fair competition and further protect and stimulate the vitality of energy market entities. We will also implement policies as a safeguard to connect the green certificate market, carbon market, and electric power market in an orderly fashion, promoting coordination and collaboration between upstream and downstream energy industrial chains.

Fifth, we will work actively to open new prospects in international energy cooperation. This year marks the 10th anniversary of the Belt and Road Initiative (BRI), in which energy cooperation is an important area. We will steadfastly pursue an open strategy of mutually beneficial and win-win cooperation, advancing in-depth cooperation with key energy resource countries and reinforcing green and low-carbon energy cooperation with developing nations. We will consolidate and expand energy trade and cooperation channels, optimize overseas collaboration arrangements, and enhance coordination of investment development, project construction, equipment manufacturing, consultation, design, and financial services, among other aspects. By doing so, we will deeply engage in global energy governance and provide new opportunities to the world through China's new development. Thank you.

Xing Huina:

Thank you for your introduction, Mr. Zhang. Now, we welcome everyone to ask questions. Please identify the media outlet you represent before raising your questions.

CCTV:

The 20th CPC National Congress outlined a grand blueprint for building China into a modern socialist country in all respects and advancing the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. What new missions and tasks will the energy industry undertake in promoting the Chinese path to modernization? Thank you.

Zhang Jianhua:

Thank you for your question; I would like to answer it. The Chinese path to modernization is a bright path for realizing the rejuvenation of the Chinese nation and embodies distinctive Chinese characteristics. The energy industry will firmly grasp the essential requirements of Chinese modernization and unswervingly pursue a high-quality development path with Chinese characteristics, contributing our energy-related efforts to building China into a modern socialist country in all respects.

First, we will provide a solid material foundation for building China into a modern country. Energy is the lifeblood of modern society, and ensuring sufficient, stable and affordable energy supplies an essential requirement for Chinese modernization. We must strengthen the foundations for energy supply security, develop clean energy supply systems such as wind, solar, hydro and nuclear power, and enhance the resilience and security of the energy industry and supply chains. This will support the building of a modern country with reliable energy supplies.

Second, we will provide essential support for building a modernized industrial system. The energy industry is characterized by its large scale, long supply chains, extensive coverage, active innovation, and strong driving effects, making it both a fundamental and strategic industry for the national economy. The energy sector will deepen the implementation of projects for upgrading industrial infrastructure and for achieving breakthroughs in key technical equipment. We will strive to foster new growth drivers, such as new energy and high-end equipment, construct a modernized infrastructure system and promote industrial transformation and upgrading.

Third, we aim to provide strong support for safeguarding national security. Energy security is crucial for national development, people's well-being, and national security. Faced with uncertain and unpredictable factors, such as geopolitical turbulence and frequent extreme weather events, the energy industry will focus on improving the levels of self-reliance, safety and control over essential resources, infrastructure, industrial chains and supply chains. This will establish a new energy security landscape that supports a new development paradigm. 

Fourth, we aim to provide significant momentum for promoting sustainable economic and social development. Energy is crucial in building an eco-civilization and transitioning to low-carbon energy, which is the key to achieving sustainable development. We must accelerate the readjustment of our energy mix, improve our capacity to develop and utilize clean energy, promote the development of green and low-carbon ways of working and living, and thus contribute to the realization of a modernization where humanity and nature can coexist harmoniously. Thank you. 

Red Star News:

A key report delivered at the opening session of the 20th CPC National Congress proposed that China should foster a world-class business environment that is market-oriented, law-based and internationalized. The guideline for improving "getting electricity" services and continuing to optimize the electricity business environment, which was deliberated and adopted by an executive meeting of the State Council, has been implemented for nearly three years. Can you brief us on the achievements of the related work and the focus of the next phase of work?

Liu Deshun:

Thank you for the question. Optimizing the electricity business environment is an important part of fostering a world-class business environment that is market-oriented, law-based and internationalized. In recent years, the NEA has led the effort to fully implement the main objectives and tasks of the guideline by organizing energy authorities and electric power enterprises in all localities. After nearly three years of efforts, improved services have been implemented nationwide. Household users and low-voltage small and micro businesses no longer require house calls, examinations, approvals or investments for electric power usage applications. High-voltage electricity users now experience more convenient, time-saving and economical application processes. Remarkable progress has been made in the following five areas: First, household power users and low-voltage small and micro businesses (160 kilowatts and below) are no longer required to pay for electricity use applications. This marks another milestone in our country's history of electric power development, following the achievement of nationwide electricity access in 2015 and the provision of dynamic electricity to all villages across the country in 2020. Second, an internet-based electricity service system has been implemented across 31 provinces, autonomous regions, and municipalities directly under the central government. This has formed a new model of electricity service that is based on information, networks, and intelligence. Internet electricity services are now accessible to everyone. Gradually, electricity services based on face scanning and providing a unified social credit code have become popular. As a result, enterprises and household users can easily access electricity services without having to go out and deal with the procedures. Third, historical breakthroughs have been made in addressing the difficulties and obstacles in accessing high-voltage electricity services. The connectivity between examination and approval management systems for government construction projects and the electric service systems of power supply enterprises has been essentially realized in all localities. Many innovative experiences have emerged, allowing power supply enterprises to acquire electricity demand in advance and thus provide proactive services. High-voltage electricity services are rapidly transforming from "projects waiting for electricity" to "electricity waiting for projects." Fourth, improved "getting electricity" services have profoundly changed the relationship between power supply enterprises and users. People's sense of gain and experiences now serve as the best criteria for evaluating power supply services. Power supply enterprises have evolved from being traditional single power suppliers to service providers of "getting electricity" access for the users. The general public has transitioned from being just electricity users to beneficiaries, overseers and promoters of improved "getting electricity" services. Fifth, the capacity of the electric power supply has improved significantly. The duration and frequency of power outrages have continued to decrease in various regions. Power supply reliability in some cities, such as Shenzhen, has reached world-class levels. 

For the next step, the NEA will further improve its service for "getting electricity" with a focus on the following three aspects of work. First, we will promote access to electricity through facial recognition and one integrated license, as well as synchronously publicize relevant policies and service standards; maintenance, repair, and power transmission arrangements; and information on the energy regulatory hotline, 12398, and the power supply service hotline, 95598, on a regular basis and in a standardized and institutionalized manner. Second, we will step up efforts to promote typical practices to help the high-voltage power supply sector achieve IT application-based, Internet-based and smart development. Third, we will guide all localities to improve the working mechanism which features government-enterprise coordination in electricity supply services, give full play to the leading role of local energy (power) departments and the main role of power supply enterprises, and work together to solve problems and weak links so as to constantly improve residents and businesses' sense of gain and experience in getting electricity. Thank you.

Kyodo News:

On March 21, Chinese President Xi Jinping and Russian President Vladimir Putin signed a joint statement, saying that the two sides will work together to promote research and consultations on a new China-Mongolia-Russia natural gas pipeline project. What is the progress of the negotiation on the Power of Siberia 2 natural gas pipeline project? Does China plan to expand the import of energy from Russia? Thank you.

Zhang Jianhua:

During President Xi Jinping's state visit to Russia in March, the two sides jointly signed the Joint Statement of the People's Republic of China and the Russian Federation on Deepening the Comprehensive Strategic Partnership of Coordination for the New Era. In the statement, the two sides stated that they would work together to promote research and consultations on a new China-Mongolia-Russia natural gas pipeline project. As energy cooperation is an important cornerstone of pragmatic cooperation between the two countries, both sides will build a closer energy partnership, support enterprises from both sides in promoting energy cooperation projects, maintain the stability of industrial chains and supply chains of energy products, and jointly make contributions to the long-term, sound, and stable development of the global energy market. At present, enterprises from both sides are carrying out exchanges and consultations regarding the new natural gas pipeline project. China will continue to support enterprises to conduct research and consultations in accordance with commercial principles. Thank you. 

ThePaper.cn:

Over the past two years, there has been a regional energy supply imbalance in our country. As summer is around the corner, what are the work arrangements to ensure energy supplies in the summer peak consumption season? Thank you.

Liang Changxin:

Thank you for your question. The NEA has faithfully implemented the important arrangements for energy security and power supply made by the CPC Central Committee and the State Council and worked together with local departments and enterprises to ensure power supplies. During last year especially, we have effectively dealt with the challenges brought by high temperatures, drought disasters, and extreme water scarcity during the summer months. The country's maximum power load is expected to exceed 1.36 billion kilowatts this year, a substantial growth compared to last year. According to our research and judgment, power supplies across the country can be well ensured in general, though certain provinces may encounter a shortage of power during peak hours. We will strengthen coordination and make every effort to ensure the work relating to the following five aspects is done well.

First, we will lay more focus on monitoring, analysis, and early warning systems. We will intensify efforts to monitor power supply situation on a regular basis. During the summer peak consumption season, we will ensure power supply in line with the principle of "one policy for one province." We will also closely monitor water supplies and demand conditions in certain provinces like Yunnan and Guizhou, fully take into consideration the uncertainty of water supply during the flood season, and be well prepared for power supply work in the summer peak consumption season in advance.

Second, we will intensify the construction and production of supporting power supply sources and transmission channels. In accordance with the principle of "measured progress while allowing for flexibility," we will see that various power supply sources are operational before peak summer demand to ensure a stable supply. Among these, the supporting power supply will be no less than 17 million kilowatts. We will continuously optimize the regional main grid structure and enhance emergency response capabilities. 

Third, we need to ensure an adequate supply of thermal coal. We will focus on ensuring the stable quantity, quality and price of thermal coal supply. We will urge and guide local governments to speed up the construction of coal mines, promote the swift commencement of approved projects, and optimize the schedule of coal mines under construction to put them into production as quickly as possible. We will also urge provinces across the country to closely monitor the quantity and performance of long-term thermal coal supply agreements and ensure effective implementation and coordination through diligent supervision.

Fourth, we will make every effort to ensure the stability of power generation units. We will urge power generation enterprises to maintain a stable supply of thermal coal and gas, sign high-quality medium- and long-term agreements on thermal coal and gas, and strengthen performance supervision. We will also urge power generation enterprises to enhance both production and equipment management, and resolutely follow dispatching instructions to ensure that electricity generation units perform well and stably.

Fifth, we need to do a good job managing the load scientifically. We will urge local authorities to guide the public in supporting, understanding, and participating in demand-side initiatives. This will further enhance demand-side response capabilities, and effectively alleviate the pressure during peak hours. We also urge local authorities to further optimize plans for orderly electricity usage and refine their implementation. Thank you.

Zhonghongwang:

The report to the 20th CPC National Congress proposed that, based on our resource endowment, we should adhere to the principle of establishing new systems before abolishing old ones, and implement peak carbon emissions actions in a planned and step-by-step manner. What achievements has the energy sector made in establishing new systems? What are the next steps in promoting the green transformation of energy, and what other essential work needs to be done? Thank you.

Li Chuangjun:

Thank you for the question. Energy is a critical sector for achieving peak carbon emissions and carbon neutrality. To implement major policy decisions and plans of the Party Central Committee and the State Council, we always take stock of China's national conditions and reality and adhere to the principle of establishing the new before abolishing the old. Positive results have been made in promoting the green and low-carbon transformation of the energy sector, providing strong support to advancing towards the "dual carbon" goals in a proactive and steady manner.

First, outstanding achievements have been made in green development. China has installed more than 100 million kilowatts of wind and light energy for three consecutive years, and renewable energy installations exceeded 1.2 billion kilowatts at the end of last year. Non-fossil energy sources account for nearly half of the installed capacity. More than 90% of coal power units have achieved ultra-low emissions, with pollutant emissions on par with gas and electricity. Over the past three years, coal consumption has decreased by 1.5 percentage points while non-fossil energy consumption has increased by 2.2 percentage points. Additionally, the number of charging facilities has increased by 3.3 times.

Second, green transformation has gained momentum. New energy technology innovation has accelerated energy transformation. Advanced technologies and equipment, such as high-efficiency photovoltaic power generation and high-capacity wind power have remained at a world-leading level. Significant breakthroughs have been achieved in independent third-generation nuclear power, large-scale energy storage and many other major scientific and technological innovations.

Third, policy support has been strengthened. Implementation plans for peak carbon emissions in the energy, coal, and oil sectors have been issued and implemented. Moreover, the market, legal and standard systems for promoting energy transition have been further improved.

Going forward, we will focus on the following four aspects as we advance green, low-carbon energy transition. First, we will continue to increase the supply of non-fossil energy and accelerate the adjustment and optimization of the energy mix. We will raise the proportion of non-fossil energy consumption by about 1 percentage point per year through 2030. Second, we will work hard to reduce the carbon footprint of the energy industry and advance our efforts to convert the power source of energy production equipment to electricity, gradually phase out outdated production capacities in an orderly manner. We will also promote the integrated development of coal mines, oil and gas fields, and new energy and continue to improve the level of energy conservation and carbon reduction in energy production. Third, we will actively push forward clean and low-carbon transformation of end-use energy and further shift to electricity as the energy source in industrial, construction, transportation, and other sectors. By 2025, we will raise the share of electricity consumption in end-use energy to about 30%. Fourth, we will step up institutional support for green and low-carbon technology innovation and transformation, increase efforts to seek breakthroughs in low-carbon, zero-carbon, and carbon-negative technologies, and constantly improve the institutional mechanisms and policy systems for energy transition. Thank you.

China Mining newspaper:

The report to the 20th National Congress of the Communist Party of China proposed to speed up the planning and development of a system for new energy sources. In recent years, we have driven deeper in pursuing the energy transition. What kinds of foundations have been laid for developing such a system, and what are the next goals and tasks in this regard? Thank you.

Zhang Jianhua:

The report to the 20th CPC National Congress pointed out that "we will thoroughly advance the energy revolution, speed up the planning and development of a system for new energy sources, and ensure energy security." This is the new deployment and requirements of the CPC Central Committee for the high-quality development of the energy sector on the new journey in the new era. Over the last 10 years in the new era, a series of breakthroughs have been made in energy development under the guidance of the new energy security strategy, laying a solid foundation for the planning and development of a system for new energy sources. The green and low-carbon energy transition stands at a new starting point. The installed capacity of non-fossil energy power generation has increased by 2.8 times over the past 10 years, reaching 1.27 billion kilowatts, accounting for 49.5% of the total installed capacity, and the proportion of non-fossil energy consumption has increased by 7.8 percentage points, reaching 17.5%. Energy security has reached a new level. The diversified energy supply system consisting of coal, oil, natural gas, nuclear, and renewable energy has been constantly improved. The total energy production has increased by 33% over the past 10 years, effectively guaranteeing the overall stability of energy supply and demand as well as energy prices, thereafter guaranteeing an annual economic growth rate of more than 6%. Innovation and development have embarked on a new journey. We have built up our strengths in global competition for the clean energy industry. The key components of photovoltaic and wind power account for 70% of the global market share. The R&D and application of new technologies such as high-efficiency photovoltaic power generation, large-capacity wind power, Hualong One nuclear technology, and new energy storage are being accelerated. New forms and models of energy development are constantly emerging.

To thoroughly implement the decisions and deployments of the CPC Central Committee and the State Council to speed up the planning and development of a system for new energy sources, we will push forward the energy revolution and promote energy system reforms to present the "three news," that is, a new energy structure, a new industrial system, and new energy supply and use models. First, we will promote the green transformation of energy production and consumption and accelerate the transition of main energy sources from fossil fuels to non-fossil energy. Second, we will build up a modern energy industry system, intensify efforts to achieve major scientific and technological breakthroughs in pioneering and strategic research, actively advance the construction of the new power system, and push forward the clean, low-carbon, and efficient use of fossil fuels. Third, we will ensure a resilient energy industrial and supply chain, constantly bolster our capabilities for energy production and supply as well as reserve adjustment. We will pay equal attention to cross-regional transmission and balanced regional production, and promote the transformation of energy supply and use models to adopt integrated energy development and strengthen the integration of power source, grid, load and storage. Thank you.

The Poster News APP: 

At the beginning of last year, the NDRC and the NEA issued guidelines on accelerating the building of a unified national power market system. What progress has been made in the past year? What are the main focus points moving forward? Thank you. 

Liang Changxin:

Thank you for your questions. Over the past year, steady and orderly progress has been made in building the power market. The proportion of market-based electricity transactions has been further increased, and the market has been playing a more prominent role in the optimal allocation of resources. First, a multi-level power market system has been improved. Provincial-level (autonomous region-level and municipal-level) market-oriented trading has been deepening, and inter-provincial and cross-regional market-oriented trading has been making steady progress. Medium and long-term inter-provincial transactions are running on a regular basis, and inter-provincial long-period spot transactions are in trial operation. In addition, the southern regional power market has carried out trial operations for coordinating power transfers. In 2022, the proportion of market-based electricity transactions reached 60% of the total power consumption. Second, the market-oriented power trading mechanism has been improved. Medium and long-term and ancillary services markets have achieved full coverage. Six pilot areas for spot transactions, including Shanxi, have entered a long-periodic uninterrupted power settlement pilot operation. Over 600,000 business entities have registered in power trading institutions, and coal power, gas power, nuclear power, and renewable energy power generation systems now participate in the market in an orderly manner. The market mechanism has played an important role in optimizing the allocation of resources, promoting the capacity of absorbing renewable energy power, and ensuring power supply.

In the next step, we will speed up building a unified national power market system so as to adapt to the new energy system and accelerate the building of the new power system. First, we need to improve the multi-level unified power market system, steadily promote the construction of provincial-level (autonomous region-level and municipal-level) and regional power markets, let the inter-provincial and cross-regional transactions be more market-based, and enhance the link between the markets. Second, we should synergize different types of power trading, continue to improve the medium and long-term market and ancillary service market, and actively yet prudently promote the construction of the spot market. Third, we need to help diversify business entities and improve the relevant mechanisms for new energy and new business entities to participate in the power market. Thanks.

The Beijing News:

After years of development, China has become the world's largest producer and consumer of renewable energy. What are the major challenges that we face in this regard, and how will we deal with them? Thanks.

Li Chuangjun:

Thank you for your questions. In recent years, the energy sector has thoroughly implemented the new energy security strategy proposed by General Secretary Xi Jinping, namely, launching a revolution in energy supply, consumption, technology and market, and increasing international cooperation in all sectors. We have been committed to achieving peak carbon emission and neutrality targets as well as coordinating development and security and vigorously promoting the transition to green and low-carbon energy. China's development of renewable energy has achieved new breakthroughs and entered a new stage of large-scale, high-quality, and leapfrog development. Currently, the main challenges that we face regarding the development of renewable energy sources are as follows:

First, in the aspect of absorbing electricity into power grids, with the rapid development of the new energy sector, the traditional power system can no longer meet the requirements of the large-scale and high-proportion development of new energy in terms of planning, construction, dispatching, and operation. Some places see pressure from absorbing electricity generated by new energy sources into power grids. 

Second, in terms of ensuring factors of production, the development of the new energy industry requires a huge amount of land resources. To realize the large-scale development of renewable energy, we need to strengthen policy cohesion and coordination with relevant departments in areas such as land and sea use, as well as environmental protection.

Third, in terms of the consumption and utilization of renewable energy, in order to actively adapt to the new requirement of transitioning from assessing the total amount and intensity of energy consumption to assessing the total amount and intensity of carbon emissions, we need to further guide all sectors of society to proactively consume and utilize renewable energy.

In response to these challenges, we will fully implement the guiding principles of the 20th CPC National Congress, coordinate development and security, and expedite the planning and building of a new energy system, focusing on the following three aspects. First, we will accelerate the construction of new power systems. We will make coordinated efforts to ensure the safe and stable operation of power systems, the reliable supply of electricity, and absorb electricity generated from renewable energy sources into power grids. We will comprehensively improve the adjustment capacity and flexibility of power systems and ensure that new energy resources can generate power, provide electricity, and be used effectively. Second, we will coordinate energy security and food security. We will step up research on policies related to land and sea use for compound new energy projects. We will boost the development of compound new energy projects and the efficient and economical use of land, ensuring the implementation of major projects in this regard. Third, we will work to develop green and low-carbon ways of working and living. We will improve the system concerning green power certificates and move faster to issue them for all power generated from renewable energy. We will introduce policies to promote the consumption of power generated from renewable energy. We will also specify the authority, versatility, uniqueness, and dominant role of green power certificates, expand the scope of their issuance and trading, and work to promote their full coverage. We will foster an atmosphere in all sectors of society to use electricity generated from renewable energy, encourage all energy-consuming units to proactively assume their social responsibility in using such electricity, and promote the green and low-carbon transformation and high-quality development of both the economy and society.

Southern Metropolis Daily:

The CPC Central Committee and the State Council have issued a plan outlining the overall framework for the country's digital development. The document emphasizes support for the in-depth integration of digital technology with the real economy, as well as the accelerating innovative application of digital technology in areas such as agriculture, manufacturing, finance, education, medical services, transportation and energy. What are the goals, tasks and measures for the integrated development of digital technology and the energy sector?

Liu Deshun:

Thank you for your question. Energy serves as a fundamental support for socioeconomic development. In the context of accelerated digital technology innovation and its increasing integration into all fields and stages of socioeconomic progress, the integrated development of the energy sector and digital technology is a key growth driver for upgrading the industrial base and modernizing the industrial chains of China's energy sector in the new era. The initiative holds great significance for enhancing the sector's core competitiveness, supporting its high-quality development, and working actively and prudently toward the goals of reaching peak carbon emissions and carbon neutrality. The 14th Five-Year Plan and the period ahead present an important opportunity to accelerate the integration of digital technology and the energy sector. However, generally speaking, China's energy sector is still in the early stages of digital and smart transformation. There is an urgent need to further strengthen coordination and guidance for industrial transformation and development.

In order to implement the plan for the overall layout of China's digital development that you mentioned, and accelerate the innovative application of digital technology in the energy sector, the NEA recently issued the Opinions on Accelerating the Promotion of Digital and Smart Technologies in the Energy Sector. The goals are to promote the adoption of digital technology in energy production, transportation, storage, sales and use, build a digital and intelligent innovative application system covering all aspects of the energy sector, and speed up the transformation of energy system operation and management model toward greater standardization, digitalization and intelligence. Efforts will be made to increase the proportion of new energy within the energy system and enhance total factor productivity, realize qualitative, efficient and dynamic changes in energy development, improve the quality and efficiency of the energy sector, and curb the total amount and intensity of carbon emissions. Based on the principles of "demand-oriented, digital empowerment, collaborative and efficient, and integrated innovation," the opinions proposed multiple measures from such aspects as accelerating industry transformation and upgrading, promoting application pilots and demonstrations, advancing breakthroughs in generic technologies and improving the support system, as well as strengthening organizational support efforts. These measures are centered around diverse application scenarios, such as smart power plants, smart grids, smart coal mines, smart oil and gas fields, and comprehensive energy services, in order to promote the engineering and industrialization of innovation achievements and cultivate advantages in the integrated development of digital technology and the energy industry from all aspects. Thank you.

CRNTT:

Since last year, the international energy supply and demand situation has been complex and severe, with energy security becoming a common concern for all. How do you view the energy security situation in China at present and in the future? What further steps will be taken to ensure China's energy security? Thank you.

Zhang Jianhua:

Thank you. In today's world, there are increasing unstable, uncertain and unpredictable factors that are constantly posing challenges to the stability of the global energy supply and industrial chains. Since last year, in the context of strained global energy supply, China has maintained stable energy supply in terms of quantity and price by continuously improving energy supply capacity and quality. As we embark on a new journey of building a modern socialist country in all respects, energy consumption will continue to grow. New energy has not had the capability to fully replace conventional energy sources, fossil fuels will continue to play a role in guaranteeing China's energy security, some energy technologies and equipment still have weakness to overcome, and extreme weather has had an increasingly significant impact on energy supply, bringing multiple pressures to energy security. 

At the 20th CPC National Congress, energy was identified as a key area for national security and capacity building. Important arrangements have been made to promote energy revolution and ensure energy security. Next, we will take specific steps in four areas. First, we will take multiple measures to improve our energy supply capacity, including strengthening the construction of advanced coal production capacity, promoting the exploration and development of oil and gas resources, increasing the supply of clean energy, and advancing the building of energy reserve capacity. Second, we will promote the energy industrial chain to be more self-supporting with risks being better controlled, strengthen the research and development of key technologies, and shore up weak links in the industrial chain. Third, we will promote low-carbon transformation of the energy sector, build a new energy system, speed up the optimization of the energy structure, and work to increase the proportion of non-fossil energy in energy consumption. Fourth, we will strengthen prediction and early warnings for energy security risks and continue to formulate and implement relevant energy security plans, to ensure China's stable energy supply. Thank you.

Xing Huina:

The last two questions, please.

Economic Daily:

This year marks the third year of the implementation of the 14th Five-Year Plan. Can you talk about what progress has been made concerning the plan for energy development during the 14th Five-Year Plan period? Thank you.

Liang Changxin:

Thank you for your question. Since the launch of the 14th Five-Year Plan, under the guidance of the new energy security strategy of promoting reforms in energy consumption, supply, technologies, and systems while strengthening international cooperation on all fronts, smooth progress has been made on the main objectives and indicators of energy planning; great advancement has been made in key tasks; and the construction of major projects has been carried out in an orderly manner. All these have laid a sound foundation for the development of a new energy system. The progress is mainly demonstrated in five aspects. First, the demand for energy with growth beyond expectation has been ensured. During the first two years of the 14th Five-Year Plan period, the growth of energy consumption had been higher than expected, with an annual growth rate of 1.5 times that of the 13th Five-Year Plan period. The foundation for energy security has been strengthened. The overall energy production capacity has developed at a faster pace. The production of standard coal reached 4.9 billion tons in 2022, and primary energy production increased by 14.2% over the last two years. Compared with the energy crisis in Europe, China has maintained overall stability in energy supplies and prices. Second, investment in major energy projects has demonstrated strong growth. The key projects of the 14th Five-Year Plan for energy development have been advanced, and over 50% of the projects in the plan have begun construction. Investment in major energy projects nationwide totaled over 4 trillion yuan in the past two years, with a growth rate of 12.2 percentage points higher than that of the investment in infrastructure nationwide during the same period. All of these factors have played a leading role in expanding domestic demand, stabilizing investment, promoting growth, and ensuring safety. Third, notable achievements have been made in expanding green development and cutting carbon emissions in energy development. Since the launch of the 14th Five-Year Plan, new energy development has been further accelerated. The newly installed wind and photovoltaic power capacities have surpassed 100 million kW for three consecutive years. The annual output of electricity generated by new energy is over 1 trillion kWh, with an increase of over 60% over the past two years. Non-fossil energy accounts for nearly 40% of the increase in energy consumption, with equivalent reductions in carbon emissions of about 600 million metric tons of carbon dioxide in total. Fourth, high-quality services for energy consumption regarding people's livelihoods have continued to be improved. Clean heating accounts for over 70% of all heating in China's northern region, surpassing the goals outlined in the plan and contributing to over 30% of the improvement in air quality. About 5.6 million charging facilities have been built nationwide, more than three times that of 2020, ensuring the charging needs of over 10 million new energy vehicles. In addition, the full-scale nationwide supply of State ⅥB standard gasoline for motor vehicles has been ensured, with world-leading refined oil quality. Fifth, the growth driver for the innovative development of energy has been further enhanced. The Hualong One demonstration project, a domestically designed third-generation nuclear reactor, has been built and put into operation. The Baihetan hydropower station, with the largest single-unit capacity in the world, has been built and put into full operation. The research and application of a group of new energy technologies, including large-scale energy storage and hydrogen power, have made new progress. The development of the national unified power market system has been accelerated. In 2022, the proportion of market-based electricity transactions in total electricity consumption surpassed 60%, 20 percentage points higher than that of 2020. Thank you.

China Daily:

This year marks the 10th anniversary of the proposal of the BRI. Quality cooperation projects in the field of energy have brought new opportunities to countries along the route to achieve common prosperity. In the future, the BRI will be confronted with new international and domestic environments. What will the NEA do in this new environment to keep advancing the achievements of energy access, win-win outcomes, and mutual benefits? Thank you.

Zhang Jianhua:

Thank you for your question. Energy is a key area for Belt and Road cooperation. Over the past 10 years since the proposal of the BRI, under the strong leadership of the CPC Central Committee and the State Council, international energy cooperation has yielded fruitful outcomes. A batch of clean, efficient, and quality energy cooperation projects have been launched. The mechanism for multilateral and bilateral energy cooperation has constantly improved, and exchanges in energy policies and technologies have become more frequent. All these have actively contributed to the sustainable energy development of Belt and Road partner countries and safeguarding global energy safety and stability.

Today, our world, our times, and history are changing in ways like never before. Energy cooperation under the BRI also faces many difficulties and challenges. We will have a full and accurate study and grasp of the guiding principles of the 20th CPC National Congress and thoroughly implement the guiding principles of General Secretary Xi Jinping's major expositions on the joint pursuit of the BRI and the promotion of energy cooperation. With the goal of high-standard, sustainable, and people-centered development, we will continue to open up new prospects of international energy cooperation and create new opportunities for the world with new advances in China's development.

First, we will promote high-quality green energy cooperation projects. We will strongly support the green and low-carbon development of energy in developing countries and deeply engage in the global energy transition and transformation. We will fully consider the green energy development needs of Belt and Road countries, continue to expand the coordination of green energy strategies, and encourage enterprises to go overseas to launch green energy cooperation. We will adopt trade, project contracting, investment, and technology cooperation in accordance with local conditions to launch cooperation among three or more markets. We will promote the construction of a batch of green energy best-practice projects that will produce sufficient financial returns and serve as illustrious examples in order to help realize the vision of sustainable energy for everyone.

Moreover, we will actively participate in cooperation on global energy governance. We will uphold the principles of extensive consultation, joint contribution, and shared benefits and jointly build the Belt and Road energy partnership. By means of flagship activities such as the Belt and Road Energy Ministerial Conference and the Belt and Road Energy Partnership Forum, we will advance energy policy exchanges and project matching to promote mutually beneficial energy cooperation. We will strengthen regional cooperation and work to develop and make good use of energy cooperation platforms between China and the Arab League, the African Union, Central and Eastern European countries, and APEC countries. We will advance the establishment of the China-ASEAN clean energy cooperation center and promote exchange activities and capacity building in the area of clean energy to promote the common development and prosperity of energy in all countries. Thank you.

Xing Huina:

Today's briefing is hereby concluded. Thank you to all speakers and friends from the media. See you.

Translated and edited by Xu Xiaoxuan, Wang Wei, Zhang Rui, Zhou Jing, Yang Xi, Qin Qi, Zhang Junmian, Liu Caiyi, Liu Qiang, Ma Yujia, Huang Shan, Yan Xiaoqing, Liu Sitong, Zhu Bochen, Cui Can, Yuan Fang, Xu Kailin, Wang Yiming, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Shen Hongbing, deputy director of the National Disease Prevention and Control Administration and director of the Chinese Center for Disease Control and Prevention (China CDC) 

Mr. Tong Yigang, professor and dean of the College of Life Science and Technology at Beijing University of Chemical Technology

Ms. Zhou Lei, researcher at the China CDC

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 8, 2023

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Shen Hongbing, deputy director of the National Disease Prevention and Control Administration and director of the Chinese Center for Disease Control and Prevention (China CDC), to brief you on China's study of the origins of SARS-CoV-2, and to take your questions. Also joining us today are Mr. Tong Yigang, a professor and dean of the College of Life Science and Technology at Beijing University of Chemical Technology; and Ms. Zhou Lei, a researcher at the China CDC.

Now, I'll give the floor to Mr. Shen for a brief introduction.

Shen Hongbing:

Friends from the media, good afternoon. It has been over three years since the outbreak of COVID-19 at the end of 2019. During this period, we have continually made efforts on related origin tracing. The study of the origins of SARS-CoV-2 is a highly specialized issue. The Chinese government and scientists have always upheld a science-based approach and hoped to clarify the origins of the virus. The matter is of crucial significance to preventing similar pandemics from happening again.

Now, I'll brief you on our origin tracing during the past three years from two aspects.

First, since the outbreak of COVID-19, China, as a major country committed to being open, has always upheld a science-based approach on the scientific issue of tracing virus origins. We have been actively communicating and cooperating with the World Health Organization (WHO). In response to the resolution adopted by the 73rd World Health Assembly, we took the lead in inviting the WHO to send international experts twice to conduct joint studies on the origins of SARS-CoV-2 in China. Under the principle of jointly formulating work plans, carrying out analysis and research, writing reports and publishing study results, the first phase of the joint origin tracing studies was accomplished in Wuhan. The report, titled "WHO -convened Global Study of Origins of SARS-CoV-2: China Part," or the "Joint WHO-China Study, " has been fully recognized by participating experts both at home and abroad as well as the WHO.

Throughout the first phase of the joint studies, China provided all the origin-tracing-related information that it had at the time to the joint team of experts and concealed no cases, samples, or test and analysis results. Recently, some officials and experts from the WHO willfully made comments and recklessly rejected the previous results. This totally violates scientific principles, rudely offends and disrespects the scientists around the world that participated in the previous origin tracing, and politicizes the origin tracing efforts. This cannot be tolerated by China's scientific community, nor can this be accepted by its global counterparts.

Second, based on the huge amount of human, material and financial resources invested in the first phase of the joint studies, we did not suspend our origin tracing. We continue to coordinate the resources and to carry out comprehensive scientific investigations in the fields of epidemiology, molecular epidemiology, animal and environment and even laboratory inspections. Chinese scientists have shared related progress and results with the global scientific community by reporting to and communicating with the WHO and its Scientific Advisory Group for the Origins of Novel Pathogens (SAGO ) and publishing papers. Many findings in the research have also further proved the results from the first phase of the joint studies.

These research findings and related data have been published in international and domestic academic journals. As a responsible country and with scientists who have a sense of responsibility, we have always proactively shared these results with scientists around the world. We hope to uphold a science-based and scientist-centered approach, strengthen communication, cooperation and information sharing, and stick to a scientific path when carrying out SARS-CoV-2 origin tracing. Those who instigate and participate in politicizing the origin tracing and use the issue to smear China should not assume that the global scientific community will be deceived by such stunts. We urge those WHO officials and experts to return to a scientific and impartial stance, and not to take the initiative or be forced to become tools for certain countries to politicize the origin tracing efforts.

Joining me today are professor Tong Yigtang and researcher Zhou Lei. They are both experts who participated in the WHO-China joint origin tracing research. They will also brief you on relevant information, and we will take your questions together. Thank you.

Shou Xiaoli:

Thank you, Mr. Shen. The floor is now open for questions. Please identify the media organization you work for before asking your questions.

Global Times:

Some WHO officials believe the Chinese government has not been open and transparent in providing COVID-19-related data, affecting global origin tracing. What are your comments on this? What difficulties have you encountered in origin tracing? Thank you.

Shen Hongbing:

Thank you for your questions. I would like to invite Ms. Zhou to answer your questions.

Zhou Lei:

Thank you for your questions. We have also noticed the situation you mentioned. To be honest, as a Chinese scientist who participated in person in the first phase of the joint origin tracing studies, I was surprised to hear such words. In fact, when we were in Wuhan, we collaborated with both domestic and foreign scientists as part of the joint expert team to conduct origin-tracing together. During this process, Chinese scientists adhered to the principles of being scientific, open, objective and transparent and shared all available data and materials. This included early case information and the case data of over 76,000 individuals who were suspected of having possibly been infected by COVID-19 during the early stages in Wuhan. We shared and conducted an in-depth joint analysis and study of these data and materials, and the results were collectively confirmed by the experts at that time.

In addition, we conducted antibody or nucleic acid testing on over 38,000 poultry and livestock samples and more than 41,000 wild animal samples collected within China's borders from 2018 to 2020, yet no positive results were found. We also conducted origin-tracing investigations on the upstream and downstream supply chains of all animal products at the Huanan Seafood Market during that time and found no evidence suggesting that the virus spread among animals. These results were shared at that time with the international expert team selected by the WHO and were acknowledged by them.

During the first phase of the joint studies of the origins, we followed a scientific and comprehensive approach, considering the possibility of a lab leak when planning our study. To investigate this possibility, while in Wuhan, we organized the joint expert team to conduct field research, investigations and studies at multiple local laboratories and engaged in in-depth exchanges. We also investigated and analyzed all health monitoring materials, as well as possible treatment and clinical materials of staff members and students studying at the labs during that period. Therefore, taking all aspects into consideration, we fully shared our research findings and data without any concealment or reservation during the first phase of the joint origin tracing studies. 

We know that there's a certain degree of difficulty in conducting scientific research, especially virus origin tracing studies. In the past, we have encountered multiple newly emerging infectious diseases, such as HIV (AIDS), for which we only detected and gained some clues and understanding about its origin over a decade after it was first identified. This also applies to Ebola, whose origin has remained unclear since its emergence in the 1970s. It has only been three years since the outbreak of COVID-19, so we still have a long way to go. Origin tracing research results for many diseases have shown that the place where the epidemic first began does not necessarily equal the place of the pandemic's origin. Therefore, we should maintain a scientific approach. More importantly, SARS-CoV-2 origin tracing requires scientists worldwide to collaborate based on a fully objective and scientific attitude.

The WHO is highly important as an authoritative professional organization recognized by the international community and its scientific, rigorous, and impartial nature is beyond question. However, I think the recent denial of research results by certain WHO officials, particularly regarding the results of our first phase of joint studies on origins, may damage the credibility of the WHO. So, this is our perspective of and opinion on the overall studies of the origins. Thank you.

ITV News:

I want to just follow up on that question about the WHO claim. You seem to suggest that you have been open and transparent throughout, so as you mentioned, do you think it's purely political? Are these accusations [political]? And finally, I'd like to ask you about the recent study that you have produced regarding raccoon dogs suggesting that they could have been an intermediate host potentially for the virus. Thank you.

Tong Yigang:

I don't think the accusation is scientifically grounded. As Prof. Zhou just mentioned, the Chinese expert team worked together with the expert team sent by the WHO for about a month during the first phase of joint research. They engaged in numerous scientific discussions and reached many conclusions, which I believe are all science-based and having been widely accepted after been published online. Regarding the recent data that identified the raccoon dog as a possible source of the virus, there is currently insufficient evidence to confirm this. Many people are eager to identify how the virus was transmitted and the relevant proof. We share this desire and are working to uncover the virus's origin. To do this, Chinese scientists, as well as researchers worldwide, are involved in this effort. However, the data presented in this article is not enough and not even close. It is a bit like when we constantly imagine how an event happen and speculate about, as the Chinese fable that states that if someone suspects his neighbor of stealing his axe, all the neighbor's behaviors appear suspicious to him. However, if the lost axe turns out to be in his own barn, the neighbor will no longer look like an axe thief. Some people always want to find evidence and will associate anything seemingly related to the case as correlated, thinking that raccoon dogs are the origin. An article published earlier said that some animal samples were found in environmental samples in the early stage of the COVID-19 pandemic. But these samples were mostly human samples and those of chickens, pigs, dogs, cats and various types of poultry. In fact, these animal samples significantly outnumbered those of raccoon dogs. From this perspective, there is not enough evidence. Moreover, many samples were tested at the Huanan Seafood Market, including hundreds of animal samples, but no animals carrying the virus were found. Therefore, it is not enough merely searching for animal samples from the environment and basing conclusions on that. Furthermore, the viral genetic sequences we found in the environmental samples were almost identical to those collected from early patients, suggesting that the samples collected from the environment likely originated from humans rather than animals. There is plenty of evidence of raccoon dog genetic sequences present in environmental samples that tested negative for SARS-CoV-2, and they even outnumbered those samples that tested positive for the virus. The negative samples refer to samples that are free of the target virus. As a result, it's difficult to determine whether the virus originated from raccoon dogs. Besides, even if raccoon dogs were infected, many people at the Huanan Seafood Market were also infected, and therefore, it's possible that people contaminated the environment or the virus spread from people to raccoon dogs. It's a possibility that we can't rule out, even if raccoon dogs tested positive. Therefore, I don't think it's adequate or scientific to draw such a conclusion based on this small amount of data. Thank you. 

China News Service: 

Foreign media outlets have reported that the author team from the China CDC deleted data that had been uploaded to the Global Initiative in Sharing Avian Influenza Data (GISAID) database when submitting their article on early research data on the Huanan Seafood Market. Is this true? What was the process of submitting the article? Thank you. 

Shen Hongbing:

Thank you for your questions. I'll answer them. As far as I know, the research team from China CDC submitted a preliminary draft paper to Nature in February 2022. During the submission and revision process, experts from China CDC and other organizations uploaded the original data related to the paper to the GISAID database following international practices for scientific paper publication. The data was intended only for access by the journal's reviewers, and an agreement was made with the journal and GISAID that the data would not be publicly released until after the article's publication. The data and access links have been all available and have not deleted. On March 11, 2023, the author team found that the data uploaded to the GISAID platform had been prematurely released by GISAID staff before the article's publication and without the author team's knowledge. The research team immediately called the GISAID platform to inquire about the situation, and the staff said that the data release was caused by a "misoperation" by their staff. The platform subsequently closed sharing access, but the data is still available on the platform. Our team and platform have not deleted any data, and the data access link for the peer review process has always been available. The author team uploaded the research data following international practices. We hope that GISAID will clarify this to the media and the WHO to restore the truth of the matter.

Additionally, the latest version of the paper was published online by Nature on April 5, and all the original data has also been simultaneously released in four databases at home and abroad. Thank you. 

CCTV:

This paper has indeed garnered much attention. What are the main findings of the China CDC's paper on the early research data on the Huanan Seafood Market, and are any new findings on origins tracing included? Thank you.

Tong Yigang:

Thank you for your questions. This paper describes how researchers from the China CDC conducted testing for SARS-CoV-2 and metagenomic sequencing on over 1,300 environmental samples and frozen animal samples collected from the Huanan Seafood Market between January and March 2020. The results showed that 400-plus animal samples tested negative, while 73 of the 900-plus environmental samples tested positive. During the testing process, they also isolated SARS-CoV-2 strains from three environmental samples and, after genome sequencing, found that the sequences of the viruses were almost 100% identical to that of infected cases at that time. This suggests that those viruses were from humans. In the analysis, some information on the hosts in environmental samples showed that the hosts were mainly humans and that there were also genes from pigs, cattle, chickens, ducks, cold chain products, and even gene fragments from mice and cats. These findings suggest that the SARS-CoV-2 detected was highly likely to have been introduced by humans. The data further supports the findings of the WHO-China joint study in the first phase. Thank you.

Bloomberg:

What do Chinese scientists and experts think is the most likely origin of SARS-CoV-2? Thank you.

Zhou Lei:

Thank you for your question. We have already reached a conclusion on the origins of SARS-CoV-2 through the joint study in the first phase, which was fully presented in the report released by the WHO-China Joint Mission at that time. You are welcome to read it carefully, as we clearly stated our assessment of several hypotheses regarding the origins of SARS-CoV-2. First, we evaluated the potential sources of the outbreak in the report, including humans, animals, cross-species transmission, and lab leak scenarios. We had an epidemiological group, an animal origin tracing team, and a molecular origins tracing team within our joint mission, all conducting studies in Wuhan from various angles. As a result, we believe that the comprehensive assessment-based conclusions we reached at that time are scientifically sound and credible. To reiterate, our conclusion back then was: direct zoonotic transmission to humans (spillover) is "possible to likely," introduction through an intermediate host is " likely to very likely," introduction through cold/ food chain products is "possible," and introduction through a laboratory incident is "extremely unlikely."

Following the first phase of joint studies on the origins of SARS-CoV-2 in Wuhan, our work did not stop. We continued many studies based on the work plan and recommendations for subsequent stages formulated in Wuhan at that time. Various additional results have reinforced the findings of our first phase of study in Wuhan. In response to your question, our assessment remains unchanged and can be looked up in the study report jointly released back then. Thank you.

Channel NewsAsia:

Referring to a recent editorial by the WHO, a question: why data and viral samples that were collected in Wuhan in January 2020 were not shared immediately but waited until more than three years later, now, to be made public. Also, calling the lack of data disclosure "simply inexcusable?" So what's the reason for China not releasing this data earlier, and what's your response to this? Thank you.

Shen Hongbing:

Thank you very much for your questions; I will take them. As Ms. Zhou mentioned just now, WHO-China Joint Mission conducted joint origins tracing from January to February 2021, including research on the Huanan Seafood Market. Its epidemiologists visited the market and, based on the metagenomic sequencing results of over 70 PCR-positive environmental samples, provided suggestions for the following phase. Consequently, China CDC scientists conducted a series of follow-up studies based on the suggestions specified in the WHO report on origins tracing. Subsequent analysis revealed that DNA barcodes in environmental samples from the Huanan Seafood Market offer no new clues to SARS-CoV-2 origins. In February 2022, China CDC experts compiled data and DNA barcodes from the market into a scientific paper, submitted it to Nature for peer review, made it public through a preprint platform, and uploaded the original data to GISAID following international practices. The relevant data has now been released simultaneously in four databases, both in China and abroad, and the paper has been officially published in Nature. It is worth noting that it took some time to conduct the studies. Chinese scientists conducted further relevant analysis according to the WHO's suggestions on follow-up studies, and it took some effort to submit the paper. Now the preprint is public, and the data will follow, so there is no deliberate delay in data release. 

After the first phase joint study report was released, Chinese scientists conducted extensive SARS-CoV-2 origins tracing, and their research findings were promptly published. For example, a study, published in Protein & Cell, reports that serological tests of blood donors in Wuhan during the second half of 2019 revealed no COVID-19 infections. A study on the virus spectrum of over 17,000 bats in China, published in National Science Review, finds no sequences related to SARS-CoV-2 or related coronaviruses. We have shared our research findings and data with our international peers. Thank you.

China Daily:

Recently, the media have been highly focused on the sequencing data in the study on the Huanan Seafood Market by researchers from the China CDC. What is your take on this matter from a professional perspective? Thank you.

Tong Yigang:

Currently, no scientific evidence can clearly determine the true origin of the SARS-CoV-2. All animal swab samples mentioned in this paper have tested negative, indicating that no animals at the Huanan Seafood Market were infected. Some environment swabs returned positive, with most of the detected host information from human and some from animals. This also suggests that the cases at the Huanan Seafood Market likely originated from humans rather than animals at the market. Scientists have been working hard to study the origins of the SARS-CoV-2 and have also discovered some coronaviruses in bats that are closer to the SARS-CoV-2 in other countries. However, the exact characteristics of the SARS-CoV-2, how it infects humans, and where it came from still require further research. The media's attention to this matter reflects the public's concern about public health issues. This prompts us, as scientific and technological workers, to provide scientific interpretations of the data from a scientific perspective so that everyone can better understand the data. Thank you.

South China Morning Post:

You just said that blood samples taken before the outbreak of COVID-19 in China have been tested and analyzed. Can you give us more details on that? Thank you.

Zhou Lei:

Thank you for your question. As a matter of fact, we put forward proposals in this regard as early as during the first phase of the joint studies on SARS-CoV-2 origins in Wuhan. China fulfilled its commitment made at that time, and quickly organized a large amount of manpower and material resources, including financial input, to monitor the stored sera of healthy blood donors, which was a huge workload. Let me give you some details. There were 43,850 blood samples involving 30,000 people that needed to be tested. The test results showed that no SARS-CoV-2 antibodies were detected. All of the samples were taken from local blood donors in Wuhan before December 2019. This result clearly confirmed our common findings in the first phase of the joint studies, that is that no cases were found in Wuhan prior to December 2019. As Mr. Shen said just now, we published and shared these results in a timely manner. Thank you.

The Beijing News:

We have noted that some international experts have come up with different research results based on the early research data from the Huanan Seafood Wholesale Market uploaded by the China CDC to the GISAID platform. What do you think is the reason for the differences? Are they out of different analysis methods or because of other reasons? Thank you.

Tong Yigang:

Thank you for your question. You may obtain different results using different methods, software and parameters when analyzing the uploaded data. However, our analysis of DNA barcodes in the data found that the host information of these environmental samples was mostly from people, and human gene abundance was the highest, suggesting that the virus in the seafood market environment likely came from early patients. In addition, analysis of DNA barcodes also revealed the presence of pigs, cows, chickens, ducks and other species at the market before it was closed. Some experts noted the presence of some animal genes in the samples, and suspected that these animals had passed the virus on to people at the market. The data that has been obtained so far shows no signs of the virus infecting animals at the market. Therefore, these speculations are actually unscientific, and the results of our experiments do not support animals at the seafood market being the animal origin of SARS-CoV-2. Moreover, the environmental samples were collected in January 2020, after the emergence of early cases. Therefore, even if there had been infected animals at the seafood market, it is possible that the animals were infected by humans, rather than vice versa. Therefore, we believe that there is no scientific basis for the claims of the so-called animal-to-human transmission at the market. These are just subjective assumptions. Thank you.

CGTN:

Some experts from the WHO think that due to the lack of original data about early cases in China, the report on the first phase of the joint studies met serious criticism. What's your response to this? Thank you. 

Zhou Lei:

Thanks for your question. I also noted this. When we conducted the first phase of the joint studies on SARS-CoV-2 origins, the members of the joint expert group, be it the Chinese scientists or the top international scientists selected by the WHO, all sought to trace the origins with a science-based approach. At that time, we formulated four common principles. Based on those principles, the 28-day research work in Wuhan, tiring though it was, secured remarkable outcomes, including the conclusions we mentioned above. In terms of the early cases, we shared all the materials that we collected at that time, including possible and suspected cases. The Chinese expert group and the international expert group worked together every day during the research, and we presented all the materials and information we gathered, including patient charts and questionnaires. During this process, we took a science-based approach and also abided by the international convention of protecting the respondents' privacy, so we did not shoot videos or take pictures. However, the expert group members shared data, which was studied and analyzed together, and drew joint conclusions. The idea that we hid or did not share information about early cases is simply not true.

The report on the first phase of the joint studies on SARS-CoV-2 origins received wide recognition from the WHO and other international peers. I do not understand why there is doubt now, and I feel sad about this. As I said just now, we invested a great deal of manpower, material, and financial resources into the first phase of the joint research. It can be said that both the Chinese scientists and top international experts from the WHO worked very hard around the clock, generating a joint report of great scientific value. The report should get its due respect rather than meet denial or criticism. Therefore, I suggest that we continue to trace the origins of the virus with a science-based approach and manner and jointly commit ourselves to the next phase of the work without finger-pointing or suspicion. Because this will not help us discover the origins of the SARS-CoV-2. This is our response. Thank you.

Xinhua News Agency:

The expert mentioned just now that the first phase of the joint origin tracing studies concluded that the lab leak hypothesis was "extremely unlikely ." Now the WHO has proposed that various kinds of hypotheses are open to study and need further study. How do you respond to this? In addition, how do you feel about the COVID-19 Origin Act of 2023 of the US being signed into law ? 

Tong Yigang:

Thanks for your questions. During the first phase, the WHO and China each sent more than 10 experts to Wuhan, where they spent nearly a month conducting a joint study. They made a science-based judgment that the lab leak hypothesis was "extremely unlikely." This conclusion was reached after scientists from both sides carried out extensive investigations and studies, including visiting relevant labs in Wuhan and conducting in-depth interviews with relevant persons. As for the series of hypotheses on the origins of the coronavirus, the joint group gave assessments ranging from "extremely unlikely" to "very likely," which were based on objective facts as well as rigorous and science-based judgments. We should conduct further study on the basis of respecting the results of the first phase of the joint research to improve the efficiency of the origin tracing. If we do not accept or recognize the study outcomes of the first phase and repeat the work done during that phase, it will be a huge waste of resources and even lead to the subsequent work heading in the wrong direction. This will also call into question the value of subsequent work in the future. 

As for the US' COVID-19 Origin Act of 2023, we should underline that SARS-CoV-2 origin tracing studies is a matter of science, and we should look to scientific facts for answers rather than politicize the matter. We also strongly oppose slandering, dramatizing, and other unscientific and irrational actions. Thank you.

Kyodo News:

Regarding the investigation and research into the origins of SARS-CoV-2, what are China's plans for future cooperation with the international community? Are there any specific arrangements or plans in place for international cooperation? Thank you.

Zhou Lei:

Thank you for your questions. That is actually our aspiration as well. Just now, I have repeatedly mentioned that tracing the origins of SARS-CoV-2 is not an issue for just one country and cannot be accomplished by one country alone. It necessarily requires the joint efforts of the global scientific community. Therefore, it is imperative that the international community, especially scientists, work together to carry out origin tracing. That is what must be done and what we have consistently advocated. We have cooperated with the WHO in a transparent, objective, science-based, and open manner. Additionally, we have invited international experts many times. For example, since 2020, we have invited international experts to China to study the origins of SARS-CoV-2 at least twice. I believe this approach will remain unchanged in the future. That is for sure.

Just now, my colleagues have repeatedly mentioned that during the first phase of our joint studies, we collaborated with 10 international peers and top experts to carry out research together. We developed a detailed joint research report and released it together, which in itself demonstrates our attitude and our research achievements. After that, we didn't stop our origin tracing research; our expectations and efforts never ceased. We shared with our international peers a great number of research results and data from our later studies. We published many papers and shared genetic sequences of coronaviruses, our data and information on multiple databases. In addition, we supported the WHO's decision to conduct joint global origin tracing and sent experts to collect more data and materials. We have continuously done all the work that we can do. In fact, we hope that global origin tracing can truly become an international effort. We have often called for expanding the scope of origin tracing research to cover all possible countries and regions, rather than always sensationalizing and focusing on Wuhan. We have done a lot of work in this regard. I have repeatedly reiterated that China's attitude remains unchanged: Origin tracing research should be an international endeavor. We also hope that the WHO, as an authoritative professional international institution, can truly organize global origin tracing and unite all elites from the international scientific community with a science-based, rigorous, and impartial attitude. In doing so, we can discover a convincing answer to the origins of SARS-CoV-2 in the future. Thank you.

Shou Xiaoli:

The last question, please.

Phoenix TV:

We have noticed that the WHO recently published opinion articles expressing their hope that China can share any data related to the origins of SARS-CoV-2 as soon as possible. How does China plan to share this data in cooperation with the WHO, and are there any follow-up plans? Thank you.

Zhou Lei: 

Thank you very much for your questions. Actually, we have also noticed the opinion articles you mentioned and are paying attention to this issue. In fact, we have consistently maintained close cooperation and communication with the WHO. For example, during the first phase of the joint origin tracing studies, we responded to the appeal of the World Health Assembly and invited the WHO, including the international experts they selected, to come to China and Wuhan to carry out joint origin tracing, which itself is a giant step we have taken. In addition, after completing the first phase of the joint studies, as our experts mentioned just now, we immediately shared our research results with the SAGO, an expert team under the WHO, and engaged in in-depth and comprehensive exchanges with them. We shared the information as early as possible. Moreover, we published papers presenting all our research results in many science journals to share with our international peers. I believe that we will continue to do things like that in the future. Since 2020, we, with WHO experts and joint origin tracing researchers, have not only worked together in Wuhan but also held many video conferences. During the pandemic, as we could not have in-person meetings, we communicated via emails and video conferences. Our researcher Yang Yungui, who participated in the first phase of the joint studies, also joined the SAGO later. From the perspective of Chinese scientists, we are very open and transparent, adhering to a science-based approach. Our government is very supportive and has invested a great deal of personnel, materials, and funds in conducting origin tracing research and collecting large amounts of data. Without this support, it would not be possible for us to get such good results to share with our international peers. The science journals in which we published our papers are very influential, which is helpful for international origin tracing efforts. I believe that we will continue to maintain close cooperation and communication with the WHO, our international peers, and scientists who have consistently taken a science-based approach for the origin tracing. We will continue to promptly share our latest research results and data on origin tracing. Thank you.

Shou Xiaoli:

Thank you to all the speakers and friends from the media. Today's briefing is now concluded. See you.

Translated and edited by Zhu Bochen, Wang Wei, Zhou Jing, Huang Shan, Gong Yingchun, Li Huiru, Zhang Jiaqi, Liu Sitong, Zhang Rui, Zhang Junmian, Duan Yaying, Xu Xiaoxuan, Xu Kailin, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Wang Jun, commissioner of the State Taxation Administration (STA)

Mr. Wang Daoshu, deputy commissioner of the STA

Mr. Luo Tianshu, chief accountant of the STA

Mr. Cai Zili, chief auditor of the STA

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 6, 2023

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 12th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Wang Jun, commissioner of the State Taxation Administration (STA), to brief you on better harnessing taxation to deliver high-quality economic and social development, and to take your questions. Also joining us today are Mr. Wang Daoshu, deputy commissioner of the STA; Mr. Luo Tianshu, chief accountant of the STA; and Mr. Cai Zili, chief auditor of the STA.

Now, I'll give the floor to Mr. Wang Jun for a brief introduction.

Wang Jun:

Friends from the media, ladies and gentlemen, good morning. It is my pleasure to meet you at this press conference and respond to your concerns. For years, journalist friends and people from all sectors of society have given their full support and understanding to the taxation work and tax authorities. On behalf of the STA and my three colleagues here today, I would like to take this opportunity to express my heartfelt gratitude to you all. Thank you.

Since this year, faced with a complex global environment and challenging domestic reform and development tasks, the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core has united and led the Chinese people of all ethnic groups, efficiently balanced both the international and domestic situations, and strived to achieve an overall improvement in economic performance. As a result, China's economy has got off to a relatively rosy start. Taxation is a barometer of the economy. Business production is followed by sales, and sales cannot be completed without issuing invoices. By taking advantage of value-added tax (VAT) invoices and other taxation-related big data, which are immediate, broad-based and detailed, the tax authorities can depict and compare the macroeconomic trends in a timely, objective and relatively comprehensive manner. This graph shows the changes in the sales revenue of enterprises across the country from January 2022 to April 5, 2023.

As shown by the curved line on the graph, in the past 15 months, the growth rate of sales revenue of enterprises across the country makes two V shapes, which together form a W shape. The first V-shaped curve started from the high growth rate of 6.6% in the January-February period last year. Then, the growth rate began to drop month by month to a low of -7.4% in April, and returned to a relatively high level of 7.5% in June. The second V-shaped curve started last July, slowly fluctuated and declined to a low of -3.1% in December, which was also the second-lowest growth rate last year. With the swift and smooth transition of the COVID-19 response measures and macroeconomic policies taking effect, the growth rate of business sales revenue has been picking up this year. The growth rate in the first quarter rose by 4.7% year on year and increased by 6.2 percentage points compared with the fourth quarter of last year. The growth rate also increased month by month, and the figure achieved a year-on-year increase of 12.8% this March.

Taxation-related big data also shows the growing confidence of businesses in production and operation going forward. In March, the value of business purchases increased 14.1% year on year, which was 12.8 percentage points higher than in January-February. The figure from April 1-5 saw a year-on-year increase of 23.8%. More purchases will translate into more sales. Given the low level last April and the continuing effects of the series of macroeconomic policies this year, we are certain that business sales revenue in April will see an even higher year-on-year increase than March. Business sales revenue from April 1-5 also reached a high level, up 21.2% year on year. In short, during the first year of the implementation of the guiding principles of the 20th CPC National Congress, China's economy has seen sound growth momentum overall in the first quarter. Such momentum was maintained on a month by month basis, and continues to improve.

The 20th CPC National Congress drew up a grand blueprint for advancing the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. Important arrangements were made at the Central Economic Work Conference and the NPC and CPPCC Sessions, and by the new-term State Council for promoting China's economic and social development. All these facts have placed new and higher requirements on tax reform and development. Taxation authorities must further strengthen their political stance and keep in the right direction in their work. We will strive to be a pragmatic doer and a solid contributor to implementing the decisions of the CPC Central Committee and the State Council, also a servant, a publicist, and a close friend of the tax and fee payers. We will give better play to and expand the role of taxation, lay a solid foundation for promoting all taxation-related work from a new starting point, and better serve Chinese modernization through taxation modernization.

First, we will continue to intensify self-improvement efforts to ensure that taxation organs are first political organs. At any time, taxation authorities should take immediate action in accordance with the arrangements made by the CPC Central Committee. We will launch activities under the theme of studying and putting into practice Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and follow the general principle of "studying the Thought, strengthening Party spirit, prioritizing practice, and making new contributions." By studying profoundly, understanding thoroughly, and doing investigation and research carefully, we will strive to assume responsibilities and do solid work. By doing so, we will constantly break new ground in the self-improvement of the taxation system as a political organ, make new achievements in all taxation-related work, and oversee that taxation officials take new steps to perform their duties.

Second, we will focus on the primary task of serving high-quality development. High-quality development is the top priority in building China into a modern socialist country in all respects and also the primary responsibility of taxation authorities in serving matters of national significance. All taxation-related work should focus on and make a contribution to this priority. We will continue to collect taxes in accordance with laws and regulations and stick to the bottom line of no tax or fee not prescribed by law so as to create a solid financial foundation for achieving high-quality development. We will proactively study and fully implement all preferential tax and fee policies so as to speed up economic growth and unleash market vitality for achieving high-quality development. We will also constantly adopt measures to innovate our services and enhance targeted regulation to ensure that taxation authorities always respond to people's concerns, meet people's needs, and strive for people's aspirations so as to foster a favorable tax and business environment for high-quality development. 

Third, we will deepen reform, promote innovation, perform our duties in a creative way, and improve our efficacy. We will earnestly implement the requirement of the CPC Central Committee to engage in extensive research and fact-finding activities and carry out the arrangements set by the new-term State Council. By switching roles and putting ourselves in others' positions, we will work to understand the realities, take specific steps, and deliver solid outcomes. Focusing on hands-on experience, wholehearted services, solid progress, and effective reforms, we will guide taxation officials to perform their duties and ensure implementation in a creative way and strengthen the role of taxation as the foundation, pillar, and guarantee of the country's governance.

Next, my colleagues and I are happy to answer your questions. Thank you.

Xing Huina:

Now you are welcome to ask questions. Please identify the media outlet you represent before raising your questions. 

CCTV:

Mr. Wang just mentioned that the tax data reflects a better start to China's economic development so far this year. Can you tell us more about that? Thank you.

Wang Jun:

Thank you for your follow-up questions. I understand that you are trying to further understand some of the specifics of the economic operation in the first quarter of this year. Here I will try to use "six gradual upturns" to elaborate.

The first gradual upturn is that economic operations are gradually rebounding. Just now, I have briefly introduced the overall operating situation, which I will now subdivide by industry to provide a more detailed breakdown. In March, 79.7% of the national economy's 473 medium-class industries and 75.8% of its 1,382 small-class industries achieved positive growth, while the proportion in January and February was about 56%. Between April 1-5, the proportion of medium-class and small-class industries that achieved positive growth increased to 86.9% and 82.3%, respectively. I cite this specific example and list these specific numbers to tell you that the proportion right now is close to what it was in 2019 before the epidemic.

The second gradual upturn is that business entities are becoming gradually active. First, the number of new taxpaying business entities is gradually increasing. In the first quarter, their number hit 3.434 million, up 7.2% year on year, 8 percentage points higher compared with the full-year growth of last year. Second, business entities whose production and operation were hard hit by the epidemic are regaining vitality at a faster speed. In March, the number of taxpaying business entities that received invoices and had income declarations increased by 2.08 million and 3.12 million, respectively, compared with February and January.

The third gradual upturn is that industrial production is gradually recovering. In March, industrial enterprises' sales revenue grew 7% year on year, 1.2 percentage points higher compared with annual rate of last year. The year-on-year growth for manufacturers of intelligent consumption equipment and manufacturers of communications equipment reached 36.4% and 12%, respectively. Given the continual decline in the year-on-year growth of PPI, the increase in sales revenue was hard-won. In addition, in March, the amount of money spent on purchasing machinery and equipment by the manufacturing industry increased by 13.5% year on year, 7.1 percentage points higher than the full-year rate of 2022, which reflects the increasing willingness of enterprises to expand production and upgrade equipment.

The fourth gradual upturn is that consumer demand is gradually expanding. In the first quarter, catering and accommodation; culture, sports and entertainment; and residential services, among other contact-based service industries, notably rebounded, registering sales revenue growth of 22.8%, 13.7%, and 9.4% respectively year on year. The growth rates were 22.7, 17.6, and 6.5 percentage points higher compared with the annual growth of last year and exceeded the pre-epidemic 2019 level. Commodity retailing recovered steadily and faster, with sales revenue increasing by 11.6% year on year, 3.4 percentage points higher compared with the whole of last year. It is worth mentioning that housing consumption showed signs of rebounding, and the sales revenue growth of real estate reentered the positive territory in January and February, up 2.3% year on year, 19.5 percentage points higher than the annual growth of 2022. In March, the year-on-year growth further increased to 17.9%.

The fifth gradual upturn is that the innovation momentum is being gradually enhanced. In March, the high-tech industry sales revenue grew 15.6% year on year, 5.7 percentage points higher than the full-year growth of 2022. The growth rates for such high-tech services as services for applying sci-tech advances and information services were relatively faster, up 45.5% and 19.8% year on year, respectively. In March, core industries of the digital economy grew 14.1% year on year, 7.3 percentage points faster than that of last year. Among them, the digital factor-driven industry and digital technology application industry grew faster, up 24.5% and 19.8% year on year, respectively.

The sixth gradual upturn is that green development is getting gradually boosted. In the first quarter, sales revenue of the ecological protection and environmental governance industry increased by 18.1% year on year, while that of power generation based on wind energy, solar energy, and other clean energy increased by 21.8% year on year, both maintaining a high growth rate, significantly faster than the overall national level. In particular, the sales revenue of the new energy vehicle manufacturing industry maintained good growth momentum, rising 35.2% year on year in the first quarter, after an already high year-on-year growth of 111.5% in the first quarter of 2022. 

Of course, while acknowledging that overall economic performance is moving in a positive direction, month by month, and will get better in the next step, we must also be keenly aware that there are still many uncertain and unstable factors at home and abroad. The internal driving force for high-quality development needs to be further strengthened. Although economic development faces various problems and difficulties, we are confident we will meet this year's economic growth target of around 5%. However, we need to work hard. Thank you.

China Daily:

The 20th CPC National Congress proposed insisting on focusing on the real economy in terms of economic development and moving faster to boost China's strength in manufacturing. What has been the effect of preferential tax policies on the development of the manufacturing sector in recent years, and how will tax support help the manufacturing sector become stronger in the future? Thank you.

Cai Zili:

Thank you for your questions. Manufacturing is the foundation of the real economy and the lifeline of the Chinese economy. In recent years, the CPC Central Committee and the State Council have planned and implemented a series of tax refund and fee reduction measures, and the manufacturing sector has been the top priority for support. In particular, a series of major measures to ease the heavy burden of the manufacturing sector has been successfully launched. These measures include lowering the VAT rate in the manufacturing sector and other fields, taking the lead in increasing the tax deduction ratio for manufacturing R&D expenses and making greater efforts to increase VAT credit refunds in manufacturing. These measures have effectively supported the manufacturing sector in reducing operating pressure, enhancing innovation motivation, and unlocking development potential.

Data shows that tax support aimed at improving the manufacturing sector is quite strong. First, the scale of tax and fee reductions is the largest. Since 2018, the manufacturing sector has benefited the most, with a total of more than 3.5 trillion yuan in tax and fee reductions, and tax refunds and fee deferrals, meaning the manufacturing sector has enjoyed the most tax and fee cuts. Second, the tax burden has dropped the most. Tax and fee reduction policies have significantly reduced the tax burden on business operations. According to the data of key tax source enterprises monitored by the STA, the tax burden of manufacturing enterprises in 2022 decreased by 23.3% compared with 2017, and equipment manufacturing sector dropped by 29.5%, which is the largest decrease in taxes. Third, the boosting effect is more prominent. Under the joint effect of a series of tax and other supporting policies, the development of China's manufacturing industry has grown steadily. Tax data shows that from 2018 to 2022, manufacturing enterprises increased their sales revenue by an average of 9.4% annually. Of this, sales revenue of equipment manufacturing increased by an average of 10.3% annually. Purchases of smart, R&D and energy-saving equipment by the manufacturing sector increased by an average of 13.5% annually. In 2022, the added value of the national manufacturing industry accounted for 27.7% of GDP, an increase of 1.4 percentage points from 2020, showing continued momentum with steady progress and quality improvement.

Going forward, we will fully implement and constantly refine tax-and-fee policies in accordance with the plans and deployments of the CPC Central Committee and the State Council, further assist the high-quality development of the manufacturing sector, and strive to foster an enabling environment that is conducive to the development of advanced manufacturing. First, we ought to support manufacturing to become higher-end. We will promote the upgrading of manufacturing to become higher-end through the implementation and improvement of supporting policies such as preferential tax policies for high-tech enterprises and accelerated depreciation of newly purchased fixed assets in key manufacturing industries. Second, we need to help manufacturing become smarter. We will better leverage the role of policies of the additional tax deduction for R&D expenses and preferential tax policies for technology transfer, speed up the digital transformation of the manufacturing sector, realize the deep integration of digital technology, production, and business operations, and continuously improve the level of intelligence. Third, we need to guide manufacturing to become more eco-friendly. We will implement tax-and-fee policies such as corporate income tax exemptions for special equipment investment in environmental protection, energy and water conservation, and the comprehensive use of resources, etc., encourage manufacturing companies to reduce pollution and carbon emissions and become more eco-friendly, and further promote the green, low-carbon and high-quality development of China's manufacturing sector. Thank you.

Yicai.com:

The intensity and effectiveness of this year's proactive fiscal policy will be increased. Can you introduce the preferential tax and fee policies that have been rolled out this year, and what kind of measures are worth looking forward to in the future? Thanks.  

Wang Daoshu:

Thank you for your concern. Preferential tax and fee policies are an important part of a proactive fiscal policy. Since the beginning of this year, in accordance with the plans of the CPC Central Committee and the State Council, fiscal and tax departments have released two batches of preferential tax and fee policies that have been extended or optimized. As a result, an additional 1.2 trillion yuan in tax and fees is expected to be reduced this year. Adding to that, the continued policy of refunding end-of-tax-period VAT credit is expected to reduce more than 1.8 trillion yuan in tax and fee for business entities throughout the year. Overall, these preferential tax and fee policies have the following three characteristics: First, their continuity has been highlighted. A batch of effective policies with high social expectations has been continued to keep certain social expectations stable, such as the halving of urban land-use tax for logistics enterprises' use of land to store bulk commodities and reducing employment security funds for people with disabilities. Second, precision has been improved through policy optimization. We optimized and implemented a series of policies to help micro and small-business entities overcome difficulties and achieve development, such as by reducing VAT payments for small-scale taxpayers and income tax for micro and small enterprises and self-employed individuals, with a focus on the latter two. Third, innovation in institutions has been promoted. We continued additional tax deductions for R&D expenses and increased this deduction from 75% to cover 100% of such expenses for enterprises. This policy will be implemented in the long run to provide institutional support for creating a better tax system, further inspiring enterprises to pour efforts into innovation. Meanwhile, some temporary arrangements and policies have been phased out in an orderly manner after their expected effects were produced, which will not only promote the standardization of the tax and fee policy system but also reinforce the foundation of the tax system that is conducive to fair competition.  

Next, we will continue thoroughly implementing the decisions and plans of the CPC Central Committee and the State Council, making great efforts in four aspects. First, we will intensify efforts to deliver. Each April is an important period for enterprises to declare and pay their taxes and fees. We are seizing this important window of opportunity to roll out a series of new service measures, further strengthen targeted delivery of policies, refine the implementation of policies, and optimize tax handling functions, to see that taxpayers and fee payers know the policies, understand the operations, and can enjoy the benefits. Second, we will follow through and evaluate the effects of preferential tax and fee policies. The implementation of preferential policies has been included as an important part of our efforts to carry out in-depth research and studies. We are working hard to evaluate and analyze the effects of these policies, to deliver tax and fee policies' dividends to the public, and to promote better and tangible results in policy implementation. Third, we will continue to optimize our policies. We are running a campaign for a more coordinated system with fast responses to different problems. In response to the difficulties and problems encountered during policy implementation, prompt actions will be taken to resolve them and facilitate the swift and direct delivery of policy dividends to the public. Fourth, we will strengthen our reserve of policy options. We will coordinate with related departments to pay close attention to changes to economic performance, design better services to build up China's strength in manufacturing, accelerate the implementation of the innovation-driven development strategy, and strengthen our reserve of tax and fee policy options to enrich our policy toolbox, so as to better drive high-quality economic development.  

National Business Daily:

The CPC Central Committee and the State Council place great importance on the development of the private sector. My question is, what factors do the tax authorities weigh up when trying to encourage and support the development of this sector? Thanks. 

Wang Jun:

Thank you for your question. General Secretary Xi Jinping noted that private enterprises and private entrepreneurs are in our ranks. As the head of the STA, my feeling is: they are family. Contributing more than 50% of tax revenue, the private sector is central to ensuring China's national strength. Therefore, our attitude to the private sector is consistent in three aspects.

First, in terms of policy implementation, private enterprises will always be treated impartially. Over the past five years, private enterprises have collectively enjoyed tax cuts, fee reductions, refunds, and deferred tax and fee payments of more than 8 trillion yuan, roughly 70% of the total. Notably, after the state introduced a series of tax and fee support policies, 80% of self-employed individuals in the private sector are no longer required to pay taxes. Going forward, we will continue to actively participate in and diligently implement various tax and fee support policies that benefit private enterprises, just as we have always done.

Second, regarding tax and fee services, we will always attach great importance to providing meticulous care to private enterprises. Approximately 80% of the national taxation departments' service resources are directed towards private enterprises. Additionally, roughly 80% of the current suite of tax and fee service measures are designed to benefit micro, small and medium-sized enterprises (MSMEs), as well as self-employed individuals, which constitute the majority of private enterprises. The STA has established a service office for micro and small enterprises under the tax service department and has collaborated with the All-China Federation of Industry and Commerce for two consecutive years to launch a special campaign aimed at assisting micro and small enterprises. This year, we will introduce a range of new service measures.

Third, we will consistently spare no effort to support private enterprises in terms of providing relief and addressing challenges. Over the past five years, we have actively deepened tax-bank cooperation to address the financing challenges faced by private enterprises. We have utilized corporate tax credit information as an important reference for financial institutions to provide loans to private enterprises, especially micro and small enterprises. This has helped them secure 22.46 million bank loans amounting to 6.22 trillion yuan. Currently and in the future, there may still be some challenges in the supply chain of the private enterprise industry. To address this, we are developing and continually improving the "National Taxpayer Supply Chain Query" platform and related services to assist private enterprises in expanding their supply-demand connections. This will help promote private enterprises to reinforce their weak links. Thank you. 

Science and Technology Daily:

The CPC Central Committee and the State Council have attached great importance to technological innovation. Could you please share the main measures and achievements of the tax department in supporting innovation in recent years? Also, what are your plans to further promote technological innovation in the future? Thank you.

Luo Tianshu:

Thank you for your question. In line with the decisions and plans of the CPC Central Committee and the State Council, tax and fee support policies have been consistently broadening and deepening in their scope to provide better support for technological innovation and development throughout the entire innovation chain and various links. From 2018 to 2022, the average annual increase in tax and fee reductions and exemptions to support scientific and technological innovation reached 28.8%. By 2022, the annual burden reduction scale had reached 1.3 trillion yuan, effectively stimulating the momentum of social innovation and development. I would like to share three aspects of our progress using big data on tax. Firstly, we have invested more in innovation funds. From 2018 to 2022, enterprises' investment in R&D expenses has increased by an average of 25.1% per year. Enterprises are purchasing R&D equipment to enhance their hardware power and buying technical services to increase their software power. The average annual growth rate for purchasing R&D equipment and technical services was 11.5% and 18.3%, respectively. Secondly, the vitality of innovation subjects is stronger. Over the past five years, the number of tax-related business entities in high-tech industries has grown at an average annual rate of 9.1%. This growth rate remains higher than the average growth rate of all tax-related business entities, given that high-tech enterprises have relatively high establishment conditions. Thirdly, the momentum of innovation and development is even stronger. In the past five years, the sales revenue of the high-tech industry has grown at an average annual rate of 16.1%, which is 5.5 percentage points higher than the average growth rate of the entire industry. 

Next, the tax departments will play an important role in taxation functions and continue to excel in four aspects: First, we will support both basic research and application innovation by providing tax incentives for enterprises to invest in basic research and promoting the commercialization of scientific and technological achievements. We will encourage more innovative results and better commercialization of innovative achievements. Second, we will support both the cultivation and growth of emerging industries and the transformation and upgrading of traditional industries. We will further develop preferential tax policies to support the development of emerging industries such as new-generation information technology and new energy vehicles. We will conscientiously implement the institutional arrangement that has been clarified to increase the proportion of R&D expenses deducted from 75% to 100%, to further promote the accelerated transformation and upgrading of traditional industries. Third, we will support startup enterprises to operate with agility and mature enterprises to excel in technology research breakthroughs. We will implement preferential tax policies to encourage venture capital enterprises and entrepreneurship platforms like technology enterprise incubators and help startups grow better. We will further implement preferential income tax policies for high-tech enterprises and encourage mature innovative enterprises to continuously grow and strengthen. Fourth, we will support accumulating "things" and aggregating "people" into innovative elements. On the one hand, policies such as accelerating the depreciation of fixed assets should be implemented to support upgrading and replacing enterprise equipment. On the other hand, individual income tax incentives will be given to enterprises' scientific and technological personnel who obtain equity and those research personnel in universities and colleges receiving rewards for the job-related commercialization of scientific and technological achievements. This will enhance the enthusiasm and creativity of research backbones in various aspects and promote the better conversion of "soft power" into "concrete achievements." Thank you.

Economic Daily:

At the 20th CPC National Congress, proposals were put forward to improve people's well-being and raise their quality of life. Could you please inform us about the practical measures taken by the tax authorities to ensure and improve people's livelihoods? Thank you.

Wang Daoshu:

Thank you for your question. General Secretary Xi Jinping has emphasized that "the people's desire for a better life is the goal we strive to realize."  The tax departments resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, adhered to the original mission of "gathering money for the country and collecting taxes for the people," and effectively organized tax revenue to provide solid financial support for safeguarding and improving people's livelihoods and implemented preferential tax policies to continuously release benefits for the people. Here, I will introduce the specific situation in three aspects:

First, we have been actively promoting employment as it is a major concern for people. Small and micro-business entities are the primary channels and driving forces for promoting employment and safeguarding people's livelihoods. In accordance with the arrangements of the CPC Central Committee and the State Council, tax departments have fully implemented preferential tax policies, such as VAT reductions and exemptions for small-scale taxpayers, preferential income tax for small and micro-profit enterprises and individual businesses, and halving of the "six taxes and two fees" for small and micro-business entities, to help stabilize employment and expand job opportunities. As a result, in 2022, these policies will benefit over 80 million business entities, with small and micro-enterprises and individual businesses enjoying beneficiary coverage rates exceeding 99%.

Second, we have focused on reducing burdens. The top concerns are education, healthcare, housing, and other key aspects of people's lives. The tax department has actively implemented preferential tax policies to alleviate the burden on people's livelihoods. Personal income tax reform, implemented in 2018, has yielded a significant tax reduction effect, benefiting workers in general. . In particular, the seven special additional deductions for child education, continuing education, housing loan interest, housing rent, serious illness medical treatment, elderly care, and care for infants under three years old have provided targeted tax relief, addressing livelihood concerns. According to the latest data from this year's personal income tax settlement in the first month, tax reductions through special additional deductions exceeded 150 billion yuan. Of this, taxpayers caring for children and the elderly have received a reduction of close to 110 billion yuan. Additionally, to support residents' reasonable housing needs, our country has continued to implement tax exemption policies for those buying their first house and the life-improving second house, as well as precise tax support policies for constructing and operating government-subsidized public rental housing. These two policies reduced taxes by over 200 billion yuan in 2022.

Third, we have enhanced social insurance services. Social insurance is the safety net for the people. Since the tax authorities began to take charge of levying social insurance premiums, the tax departments have extended their services to all units and the 1.3 billion-plus people covered by social insurance. We have actively optimized tax payment services and expanded their channels, ensuring the social insurance premium budget for years in a row while fully implementing the policies of reducing fees and postponing tax payments. In this way, the "pension money" and "life-saving money" of people can be guaranteed. At the same time, we have worked with relevant departments toward unified national management of basic old-age insurance funds, promoted provincial-level unified management of basic medical insurance, unemployment insurance, and work-related injury insurance; launched pilot programs on long-term care insurance and occupational injury insurance for people in new forms of employment ; and implemented tax support policies for enterprise annuities and individual pensions, further improving the world's largest social insurance system. 

People's livelihoods are no small matter, and we are concerned about each and every thing related to the people. Going forward, we will adhere to a people-centered philosophy of development, firmly fulfill the task of ensuring tax services and improving people's livelihoods, effectively consolidate the financial foundation, and earnestly implement tax and fee support policies so as to ensure tax contributions enhance people's livelihoods and wellbeing. Thank you. 

Wang Jun:

I would like to add one point: tax revenues are collected from, used for, and benefit the people. On March 30, we, along with the Ministry of Education and the Ministry of Justice, launched the 32nd Tax Publicity Month and a special activity of youth education on tax laws on campus. I noted that coverage of the event got lots of attention online. I will share one story about the event here. A student asked me why we publicized tax laws on campus. In response, I asked whether the sports facilities and the audio-visual equipment at their school were good or not, and the answer was yes. I asked whether they needed to pay tuition fees or textbook fees, and the answer was no. Then where did the money come from? I said that the money involved was collected in the form of tax from the student's, say, uncle, aunt, grandma, and grandpa, to develop and improve the compulsory education cause. Then I asked whether it was meaningful to publicize tax laws on campus so that everyone could abide by the laws to ensure tax collection for the sake of the country and the people, and the student gave a positive answer, which I was glad to hear. As you can see, providing for people's livelihoods is the basic responsibility of the tax departments. Thank you. 

The Beijing News:

Since last year, the tax departments have severely cracked down on tax-related legal violations and exposed some typical cases, drawing wide social attention. What are the plans going forward in this regard, and what are the specific arrangements for case exposure? Thank you. 

Luo Tianshu:

Thanks for your question. The tax departments have always focused on both constantly improving tax and fee services and strictly fighting against malicious legal violations such as tax evasion and fraud. Tax inspection departments nationwide investigated and punished 128,300 illegal taxpayers in accordance with the law in 2022, retrieving 195.5 billion yuan in tax losses of various kinds and publicly exposing nearly 900 typical tax-related cases of various types, strongly and effectively regulating the tax collection order. 

Looking ahead, the tax departments will follow the guidance of risk management based on precise and comprehensive analysis, combine punishment and clemency, and focus on improving the efficacy of regulation while ensuring deterrence through punishment. In this way, we aim to render tax law enforcement effective and mighty with a human touch and resolutely safeguard the national taxation security and the legitimate rights and interests of law-abiding enterprises. 

First, we will focus on tax-related risks and promote targeted governance in an orderly manner. We will continuously improve the dynamic supervision system of "credit plus risk." In terms of general tax-related legal violations, the tax departments will successively take five comprehensive steps. The first three are reminding and alerting, urging to rectify, and talking and admonishing, which will grant more taxpayers opportunities to rectify themselves and demonstrate the warmth and flexibility of tax law enforcement. Of course, for those who refuse to rectify or repeatedly break the laws, we will take the fourth step of filing an inspection case in accordance with the law. Regarding serious cases, we will take the last step, publicly exposing them to showcase the might and rigor of law enforcement. 

Second, we will closely monitor tax fraud through the use of falsified invoices and work together to enforce strict punishment. We will continue to collaborate with six departments, including the Ministry of Public Security, to crack down on serious illegal activities that do not create wealth for society and disrupt market order, such as issuing falsified invoices by "fake companies", receiving export rebates through "false exports" and taking advantage of tax concessions through "false declarations." We will strike a heavy blow to illegal activities as soon as they appear and continue to intensify our efforts to eradicate such activities.

Third, we will ensure the implementation of tax relief policies and conduct inspections to address problems promptly. The tax authorities will carry out special campaigns to ensure the implementation of multiple tax policies and crack down on tax-related intermediaries who engage in false advertising and malicious tax planning to firmly prevent the "red envelopes" of tax relief policies from falling into the hands of criminals. At the same time, we will investigate our own problems. Tax officials found to be derelict in their duties in tax evasion and fraud cases, especially those who collude internally and externally or engage in cheating, will be punished severely once discovered. We will also shore up the weak links in tax management after we find them through inspections and address both the symptoms and the root causes of the problems.

Today, the STA and tax authorities at the provincial and municipal level will also announce seven typical cases of tax-related violations. Please pay attention to them. Thank you.

China Securities Journal:

We all know that tax and fee revenue is the financial guarantee for national governance. Could you please tell us how the tax authorities organized tax and fee revenue in the first quarter and the situation going forward? Thank you.

Cai Zili:

Thank you. Organizing tax and fee revenue is the primary responsibility of the tax authorities. We have fully implemented the decisions and arrangements of the Central Committee of the CPC and the State Council, levied taxes and fees in line with laws and regulations, carried out the tax and fee preferential policies, and resolutely avoided collecting unwarranted taxes and fees. In the first quarter, tax authorities nationwide overcame the impact of the epidemic at the end of last year and early this year, along with a high base from the same period of the previous year and this year's continued implementation of tax reduction policies, and collected a total tax revenue (excluding export rebates) of 4.6756 trillion yuan, a year-on-year increase of 0.5%. This achievement marks a good start.

Mr. Wang Jun mentioned before that enterprise sales revenue increased by 4.7% year on year in the first quarter, which seems to be somewhat different from the growth rate of tax revenue. This is mainly because the tax declared by enterprises in the current month is the tax generated by their production and operation activities in the previous month. Therefore, the first quarter's tax revenue reflects economic activity of last December, and January and February of this year. In contrast, enterprises' sales revenue represents current production and operational activities, leading to a one-month difference between the two figures.

In the first quarter, tax revenue collected by tax authorities fell by 1.2% year on year in January, but increased by 0.1% in February and 5.2% in March. The increase has turned from negative to positive and is rising monthly, showcasing a positive trend of gradually improving growth. This also reflects the good momentum of China's accelerating economic recovery under a series of supporting policies issued by the Central Committee of the CPC and the State Council. Looking at different levels, tax revenue at local levels increased by 2.5% year on year in the first quarter, which was two percentage points higher than the overall national level. This will help guarantee local financial resources. Looking at different regions, in the first quarter, the tax revenue of the eight provinces and municipalities that have net contributions to central finance, including Beijing, Tianjin, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong and Guangdong, grew by 2.2% year on year, which was 1.7 percentage points higher than the overall national level.

Meanwhile, in the first quarter, tax authorities collected social insurance premiums totaling 1.9116 trillion yuan, guaranteeing timely and full payment of "pension money" and "life-saving money" to the public. In addition, tax authorities collected non-tax revenue and supplementary insurance premiums, occupational annuities, and other streams of revenue totaling 1.3849 trillion yuan.

In summary, in the first quarter of 2023, tax authorities nationwide collected 7.9721 trillion yuan in tax and fee revenue (excluding export rebates). In the second quarter, the pro-growth policies issued by the Central Committee of the CPC and the State Council will continue to play their role and China's economy will maintain a steady upward momentum. In addition, due to the large-scale VAT credit refunds handled in the second quarter of last year, the revenue base is relatively low. Tax revenue is expected to grow rapidly in the second quarter of this year. We will continue to organize tax and fee revenue in accordance with laws and regulations, strengthen the monitoring of revenue quality, resolutely avoid collecting unwarranted taxes and fees, and effectively build up a solid financial foundation for high-quality development. Thank you.

Bauhinia Magazine:

This year marks the 10th consecutive year since the launch of the campaign designed to streamline procedures for filing and paying taxes. How is the campaign progressing? What solid measures will be taken to bring convenience to taxpayers and fee payers? Thank you.

Wang Jun:

Thank you for your questions. I'm very glad to answer them. According to the requirements of General Secretary Xi Jinping, we should always serve the people and rely on the people. As the tax department, we are responsible for enforcing tax and fee collection.

Over the past nine years, the STA has introduced 539 innovative service measures, and local tax departments at all levels have issued a total of over 41,000 supporting measures. That has greatly contributed to the transition of tax and fee services in four aspects. First is the transition from mainly providing offline services to offering both online and offline services. Second is the transition from providing policy services based on people's queries to proactively delivering policy services. Third is the transition from offering generic services to gradually paying more attention to personalized services. Fourth is the transition from providing procedural services to offering services focused on protecting the legitimate rights and interests of taxpayers. Taxpayers and fee payers have responded that the methods of tax and fee payment have been optimized, with higher efficiency, friendlier services and lighter burden.

Since the beginning of this year, the STA has solicited over 1 million pieces of opinions and suggestions from taxpayers and fee payers and amasses over 100,000 pieces of opinions and suggestions from taxation staff at the community level. Based on that and according to the full implementation of new requirements of the CPC Central Committee and new policies of the State Council, the STA has introduced 42 new measures in two batches to improve tax and fee services. Last week, I made research trips to Henan and Shaanxi provinces and found that these measures have been well implemented. However, during face-to-face communication with taxpayers and fee payers, they offered one common demand. That is, a decision taken at the executive meeting of the State Council on March 24 that six preferential tax and fee policies will continue to be implemented and optimized, and they hope to have rapid, convenient and full access to these preferential policies. After learning about the strong demand, I immediately organized multiple rounds of research and discussions, and so last night, we determined the third batch of 20 measures to bring more convenience to taxpayers, focusing on solving this demand. These measures will be released after today's press conference. For example, in terms of speeding up the implementation of policies, focusing on different subjects, we will formulate themed lists of policies and deliver them to various types of taxpayers and fee payers individually to bring policies directly to people in a more targeted and meticulous way. For another example, when it comes to upgrading key services, we will develop specific policy guidance for additional tax deduction for R&D expenses and we will work with relevant departments to launch the "Self-Employed Businesses Service Month." As for the policy on reducing the average time to issue export tax refunds for first- and second-class export enterprises to three working days, we will also extend the duration of the policy to the end of this year to support the better development of foreign trade and export enterprises. And to make tax services more convenient, we will further optimize the functions of the e-tax system, expand the scope and channels of services that can be accessed online, through cellphone apps, and with an undertaking that relevant conditions have been met. We will provide more services to automatically calculate the tax reduction and exemption amounts, and automatically prefill the information for tax declaration. In doing so, we can both ensure that taxpayers and fee payers benefit from preferential policies and make tax services more convenient.

I just mentioned that we have carried out the 32nd tax publicity month nationwide with the theme of "Bringing Tax Benefits to Millions of Households and Jointly Building Modernization" starting on April 1. The campaign focuses on promoting the implementation of preferential tax and fee policies and service measures to further push for the effective and detailed implementation of the campaign designed to streamline procedures for filing and paying taxes.

We are fully aware that there is no end to the improvement in tax and fee services, and that the satisfaction of taxpayers and fee payers is the most important standard. Next, by applying new technologies, we will continue to innovate and improve our services, and we will introduce the fourth and fifth batches of service measures. For instance, we will soon begin piloting cross-border bilingual tax services for equity transfers of overseas enterprises, so that cross-border tax declaration can be handled without the need to be present in person. At the same time, we will pilot smart opening for enterprises newly founded in China in several regions. That is, as soon as an enterprise registers, the tax-related information will be matched automatically, making it possible for the enterprise to get invoices as soon as possible, and we will continue to expand the scope of the trials. For large enterprises with good credit, we will pilot making out invoices based on needs, without a cap on the invoice amount. For taxpayers running simple businesses, we will pilot simplified tax declaration and constantly expand the scope of the trials.

In summary, we will keep working to improve and enhance the quality and efficiency of tax and fee services to ensure that people can always enjoy convenience, and taxpayers and fee payers can not only have easy access to good services but also get things done well and receive timely feedback on their queries both online and offline. We also invite the media to provide their supervision. Thank you.

Xing Huina:

Today's briefing is hereby concluded. Thank you to all the speakers and friends from the press. Goodbye.

Wang Jun:

Thank you, chairperson and friends from the press. Thank you.

Translated and edited by Zhu Bochen, Huang Shan, Li Xiao, Zhou Jing, Liu Caiyi, Yuan Fang, Yan Bin, Yang Xi, Wang Yanfang, Liu Qiang, Wang Yiming, Zhang Rui, Ma Yujia, Xu Xiaoxuan, Zhang Junmian, Cui Can, Xu Kailin, He Shan, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Yu Jianhua, minister of the General Administration of Customs of China (GACC)

Mr. Sun Yuning, vice minister of the GACC

Mr. Zhao Zenglian, director of the General Office of the GACC

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 20, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are holding the 11th press conference in the series "Embarking on the New Journey — A Government Perspective." We are delighted to have invited Mr. Yu Jianhua, minister of the General Administration of Customs of China (GACC), to brief you on the efforts of China Customs to safeguard borders and advance Chinese modernization, and to take your questions. We also have with us Mr. Sun Yuning, vice minister of the GACC, and Mr. Zhao Zenglian, director of the General Office of the GACC.

Now, let's give the floor to Mr. Yu for his introduction.

Yu Jianhua:

Thank you. Ladies and gentlemen, friends from the media, good morning. My colleagues and I are delighted to be here today to meet and speak with you. First and foremost, on behalf of the GACC, I would like to express our gratitude to the media for your coverage of our work throughout the years, as well as for your oversight of our customs enforcement efforts. 

The GACC is the national agency responsible for border administration and supervision. As we embark on a new journey in the new era, the GACC has a deep understanding of the decisive significance of establishing Comrade Xi Jinping's core position on the Central Committee of the Chinese Communist Party (CPC) and in the Party as a whole and establishing the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and upholds Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and upholds the Central Committee's authority and its centralized, unified leadership. Guided by the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, we have fully and faithfully applied the new development philosophy on all fronts, worked to create a new pattern of development, promoted high-quality development, and pursued progress while ensuring stability. We have fulfilled the responsibility of better balancing the domestic and international situations, coordinating epidemic prevention and control with economic and social development, and development with security. We remain focused on safeguarding borders, promoting development and contributing to overall economic and social progress.

Safeguarding borders is a fundamental duty of customs, and an important responsibility in the pursuit of a holistic approach to national security. We carry out lawful and science-based supervision and employ advanced technologies, such as big data and intelligent inspection, to enhance the efficiency of port inspections and tax collection, ensuring the safety and order of imported and exported goods. In 2022, tax revenue collected by customs reached 2.28 trillion yuan, an increase of 13.6%. We have been the first line of defense in preventing imported COVID-19 cases, having detected 55,000 positive cases among inbound personnel, which accounts for 67% of all port detections in the past three years. We have made significant contributions to winning a decisive victory in national epidemic prevention and control. We carry out strict inspections and quarantines to prevent the entry of major animal and plant epidemics and the invasion of alien species, having detected a total of 580,000 harmful organisms. We have severely cracked down on smuggling, having filed and investigated more than 4,500 criminal smuggling cases worth over 120 billion yuan, thus ensuring national security and a favorable business environment. We launched a 100-day special action on integrated management of dangerous goods at ports, clearing more than 2,400 batches of dangerous goods that were stockpiled at ports due to the epidemic, and detecting over 1,600 batches of false or concealed reports. This timely elimination of the significant risk of stockpiled dangerous goods in high-temperature weather conditions ensured port safety.

Promoting development is the due responsibility of the GACC in serving the people. We have taken multiple measures to serve foreign trade stability and quality improvement, continuously optimized the business environment at ports, made cross-border trade more convenient, and significantly reduced overall clearance time for imports and exports. We regularly released foreign trade data and various trade indices to serve macro decision-making and foreign trade enterprises. We have taken the lead in serving high-level opening-up, promoting innovative customs supervision systems for the Hainan Free Trade Port, free trade zones (FTZs), the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, and comprehensive bonded zones. We have actively served the high-quality Belt and Road cooperation, promoted the "smart customs, smart borders, smart connectivity " concept to be included in the strategic planning of the World Customs Organization, and signed 80 customs cooperation agreements with many countries. We have supported the construction of international logistics corridors such as the China-Europe Railway Express. We have done everything possible to help enterprises overcome difficulties, issuing 23 support measures to promote the stable growth of foreign trade. We have launched activities inviting customs officials to the front line to promote policies, effectively doing practical things and solving problems for enterprises. We have conscientiously implemented tax reduction and preferential tax policies, with total tax cuts and refunds amounting to 285 billion yuan.

This year marks the first year of fully implementing the guiding principles of the 20th CPC National Congress. Customs across the country will focus on the "1+1+6" key tasks. The first "1" refers to deeply and solidly implementing the guiding principles of the 20th CPC National Congress by comprehensively studying it. The second "1" refers to promoting the construction of a socialist modernized customs with Chinese characteristics, with smart customs as a focal point. We will serve high-quality development and high-level opening-up with efficient customs supervision. The "6" refers to the six key tasks of building a full-chain safety supervision system, holding a strong first line of defense against the virus, implementing measures to promote stability and quality of foreign trade, serving high-quality Belt and Road cooperation, creating a high-level platform for opening-up, and exercising full and rigorous Party self-governance with high-quality standards. Customs across the country will keep in mind that we must never forget our original aspiration and founding mission, that we always stay modest, prudent and hardworking, and that we have the courage and ability to carry on our fight. The GACC will be loyal, responsible and dedicated to safeguarding the country's borders, promoting development, and working together toward a common goal. As per the new government's directives, we will continue to advance and refine our customs policies and practices to align with the grand blueprint. We will translate the key objectives outlined in the 20th CPC National Congress into concrete actions within customs, strive to achieve tangible outcomes and contribute to China's modernization efforts.

Now, my colleagues and I are happy to answer your questions. Thank you.

Shou Xiaoli:

Thank you. The floor is now open for questions. Please identify the media organization you work for before asking your questions.

CCTV:

China is the world's largest trading country in goods. What are the main challenges that the GACC is facing during its supervision work? How will you respond to these challenges? Thank you.

Yu Jianhua:

Thank you for your questions. It's often said that customs is the gateway to a country. As China opens wider to the outside world, the GACC will have an increasing responsibility to safeguard the entrance to the country.

In 2022, China's foreign trade exceeded 42 trillion yuan, hitting a record high in the history of trade and putting unprecedented pressure on the supervision work of customs authorities. Last year, the total freight volume of imports and exports under customs supervision reached 4.8 billion metric tons. We deployed a total of 13 million transportation vehicles including cargo ships, airplanes and freight trains, and supervised 320 million pieces of cross-border mail. Figuratively speaking, if we put all of these imported and exported goods on a freight train end to end, it would circle the equator 30 times; if we put all of the cargo containers end to end, it would make two rows between the Earth and the moon. This fully demonstrates China's momentum as the world's largest trading country in goods, and represents China's contribution to the world as well as the responsibilities and challenges for the GACC in its supervision efforts.

The huge quantity is one thing. On the other hand, in terms of the object of the GACC's services, the number of import and export enterprises registered with the GACC reached 1.85 million, three times that of 10 years ago. There are more and more enterprises engaged in trade. In terms of types of trade, in addition to general trade and processing trade, there are many new emerging business models such as cross-border e-commerce and market purchases. 

In terms of supervisory responsibilities, in addition to preventing epidemic diseases, such as COVID-19 and African swine fever, we should also prevent the invasion of alien species such as red imported fire ants and desert locusts; in addition to testing iron ore and dangerous chemicals, we should also ensure the safety of imported and exported food; in addition to cracking down on foreign garbage and drug trafficking, we should also search for "problematic maps" and illegal propaganda materials in postal parcels; and in addition to detecting concealed ivory and other cultural relics, we should also prevent the entry of mice, cockroaches and other pests hidden in cargo containers. In 2022, customs across China identified 55,000 positive cases of COVID-19, intercepted 580,000 pests, supervised 590 million metric tons of imported and exported dangerous chemicals, returned and destroyed 2,900 batches of defective food and cosmetics, and seized 1.2 million prohibited items of all kinds and 2.8 metric tons of drugs. If we fail to steadfastly hold these fronts, there will be severe consequences.  

You just asked what our main challenges are. In face of the super-sized trading scale, various kinds of trading models, demanding regulatory requirements and significant security concerns, how can we ensure "effective controls, moderate relaxation and quick clearance?" I believe these are the main challenges we are facing.

Of course, having challenges is not a bad thing. Instead, it is a driving force to promote reform and innovation of customs. We will adhere to the Party's comprehensive leadership over the GACC, insist on customs reform toward socialist modernization, take the driving role of both reform and technology, and vigorously promote the construction of "smart customs." We will take smart customs as a starting point to promote customs reform and modernization, and build world-class customs that leads the trend of international customs supervision and serves our country's high-quality development. We will strive to realize digital, automated and smart customs clearance and management, continuously improve supervision efficiency, strengthen the three lines of defense in and outside China and at ports, build a customs operation mechanism featuring "response, correspondence and reaction," and foster an all-round and whole-chain supervision system. At the same time, we should clearly recognize that fighting corruption is a common task facing customs authorities all over the world. Therefore, the GACC should not relax for a moment. We should resolutely eliminate the black sheep who "rely on customs and live off customs," continue sounding the bugle, and forge a loyal, clean and responsible high-quality customs team, to comprehensively improve the modernization of the customs governance system and governance capacity, and write a new chapter for customs along the Chinese path to modernization. Thank you.

The Poster News APP:

Business entities are key to promoting the development of foreign trade. Last year, we saw the GACC roll out a raft of measures to improve the quality and stability of foreign trade and help enterprises tide over difficulties and reduce costs. What results have been achieved? Will the GACC launch more policies this year? Thank you. 

Yu Jianhua:

Foreign trade has always been a great concern to all of us. The epidemic has directly impacted foreign trade. The GACC has frequently communicated with import and export enterprises, so we are well aware of the difficulties facing foreign trade enterprises. We have resolutely responded to the CPC Central Committee's call for assistance to enterprises. Last year, we released 23 support measures, which local customs authorities refined into over 1,300 detailed measures based on local conditions. It's fair to say that these policies have received massive support among business entities and achieved the desired results.

Regarding the smooth clearance, compared to other large trading countries, China's import and export of goods has not been hindered by the epidemic, and customs clearance has become even faster and more convenient. In December 2022, the overall customs clearance time for imports and exports across the country dropped 67% and 92%, respectively, from 2017.

In terms of reducing costs, we supported enterprises to enjoy various tax relief policies. Last year, total tax refunds and cuts for foreign trade companies were worth 285 billion yuan.

In terms of improving services, we implemented measures such as "delivering policy information to enterprises' doorsteps," adjusting the inspection and supervision mode for imported major commodities to "release before inspection," and opening "green channels" for agricultural and food products. We also removed 87 commodity codes from the catalogue of import and export commodities subject to inspection and quarantine and optimized the business environment at ports.

Currently, we are evaluating 23 measures and will retain them as much as possible to ensure policy continuity. In addition, we will consider new policies and measures to address the pains, difficulties, and bottlenecks faced by companies. We will mainly focus on the following aspects:

First, we will facilitate the logistics of imports and exports. We will accelerate the development of smart customs and support the building of smart ports and intelligent borders. Through technological means, we will further improve the efficiency of cross-border logistics.

Second, we will improve the business environment at ports. We will push forward the building of a single-window platform to facilitate international trade, offering one-stop customs clearance services for companies.

Third, we will reduce enterprise costs. We will help enterprises to make full use of the tariff preferences in free trade agreements, such as the RCEP, and reduce the costs during import and export.

Fourth, we will foster new forms of business. We will innovate ways of customs supervision for cross-border e-commerce to ensure targeted supervision and faster customs clearance. We will support the development of new business formats such as market procurement trade and bonded maintenance service. 

Next, we will conduct in-depth research and study and continue to provide the service of "delivering policy information to enterprises' doorsteps." We will step out of the office and go to enterprises, airports, and ports to find out their needs. We will work together with enterprises to tackle difficulties and challenges and spare no effort to promote the stable and high-quality development of foreign trade.

Thank you.

Yicai.com:

Cross-border trade is closely related to people's daily lives and has developed rapidly in recent years. How do customs authorities improve and maintain efficiency while ensuring safety during customs clearance?

Yu Jianhua:

Cross-border e-commerce is of great public concern and has achieved rapid development. In 2018, China's cross-border e-commerce transactions exceeded 1 trillion yuan and doubled to over 2 trillion yuan last year. We will have Mr. Sun answer your question.

Sun Yuning: 

Thank you. Cross-border e-commerce has evolved to a global platform for buying and selling goods. It has served as a new engine driving China's foreign trade development as well as a leverage to promote high-quality development. In the new decade, cross-border e-commerce has entered a stage of rapid growth. Over the past five years, China's cross-border e-commerce imports and exports increased from 1 trillion yuan in 2018 to 2.11 trillion yuan in 2022, showcasing significant growth both in volume and quality. An increasing number of Chinese-made products are entering the international consumer goods market through cross-border e-commerce. At present, there are 165 cross-border e-commerce comprehensive pilot zones nationwide, covering 31 provinces, autonomous regions and municipalities. They have become an essential carrier and platform for developing cross-border e-commerce.

As a new form of international trade, cross-border e-commerce has achieved vigorous growth and had a profound influence on international trade. It differs from traditional trade in that it is fragmented, IT-based, and involves a massive amount of goods. Data shows that the number of declaration lists of imports via cross-border e-commerce is 56 times that of the number of goods declarations during the same period, with an average value per list of less than three ten-thousandths of the value of the goods declarations. We have seized prohibited goods, such as firearms, explosives, drugs, controlled psychotropic substances, intellectual property rights-infringing items, and exotic pets. It can be said that these new situations have posed challenges to customs regulatory work.

We have introduced a management system that is different from customs clearance for traditional trade to cater to the development trends and characteristics of cross-border e-commerce. Through classification management and tailored measures, we have created a customs supervision model that is suitable for cross-border e-commerce. Building on the existing "Business to Consumer (B2C)" policy, we proposed a new regulatory policy that better serves "Business to Business (B2B)" and "Business to Business to Consumer (B2B2C)" transactions. In this process, we have strengthened the role of technology and developed and launched a unified IT-based system for cross-border e-commerce regulation, which integrates and manages transaction, payment, logistics, and other related data. At the same time, we have fully promoted the paperless registration of overseas warehouses for cross-border e-commerce export, allowing enterprises to register their information with one customs authority and use it nationwide. As of the end of February, there were 1,713 registered overseas warehouse enterprises.

Next, the GACC will continue to adhere to the regulatory concept of "innovation, inclusiveness, prudence and coordination," and put equal emphasis on regulation and development. It will mainly focus on the following two aspects: On the one hand, we will work harder to strengthen regulations. First, we will prevent the smuggling of cross-border e-commerce by checking the authenticity of customs declaration forms via intelligent means; second, we will strengthen cooperation with cross-border e-commerce platform enterprises and control risks in advance to further reduce the operation risks of enterprises and supervision risks of customs; third, we will expand the application of commodity barcodes and strengthen the management of commodity sources to boost consumers' confidence; and fourth, we will pay close attention to issues regarding global food safety and issue warnings in a timely manner. On the other hand, we will take effective measures to upgrade services. First, we will support the e-payment of taxes for cross-border e-commerce businesses to facilitate online procedures; second, we will promote "inspection before installation" for less than container load (LCL) export cargo to further facilitate logistics efficiency and reduce the costs of enterprises; third, we will advance data analysis services so as to provide strong anticipatory guidance for the high-quality development of new business forms; fourth, we will optimize declaration procedures for overseas warehouses to further expand exports for enterprises; and fifth, we will constantly improve measures on returning imported and exported goods to ease the worries of both enterprises and consumers. Thank you.

China News Service:

Combating smuggling is an inherent function of customs authorities. Could you explain how the GACC keeps up pressure against smuggling to ensure social security, economic security and fair competition? Thank you.

Yu Jianhua:

"Cracking down on smuggling will not cease as long as there is water in the sea." Smuggling has always been a cancer of international trade, endangering national security and economic order, and even affecting people's lives and health. After years of strict crackdowns, the momentum of smuggling has been contained, and the overall situation is stable and controllable despite the complex situation. There are two situations that deserve our particular attention: 

First, smuggling activities are becoming better organized and more professional. For example, smuggling has become more collectivized and professional in terms of refined oil products, foreign garbage and drugs. The collusion between domestic and cross-border groups, the more rigorous organization as well as the more professional division of labor have brought new challenges to customs authorities in their supervision and anti-smuggling work.

Second, smugglers are using more intelligent and covert means. For example, in cases involving the smuggling of cigarettes, red wine, cosmetics and high-end consumer goods, some smugglers use network technology to link transactions; some control "parallel traders" to transport goods, or use people who frequently cross the borders to escape the crackdown; some use offshore duty-free shopping to purchase on behalf of others on Hainan Island; and some even forge cross-border e-commerce documents to get through customs under a false pretense.

Considering these features, we, together with the public security department and the coastguard, launched a joint campaign to target the smuggling of key commodities through key channels and in key areas. Over the past five years, we have investigated and handled 20,000 smuggling cases worth more than 500 billion yuan. The number of foreign garbage smuggling cases dropped from a peak of 481 to 98 last year. The seizure of ivory products fell from 9.2 metric tons at its peak to 70 kg last year. The GACC is a four-time winner of the United Nations Asian Environmental Enforcement Award and a two-time winner of the Clark R. Bavin Wildlife Law Enforcement Award, demonstrating China's image as a responsible major country to the world.

This year, we will continue to maintain the high-pressure crackdown on smuggling, focusing on the following three aspects:

First, we will strengthen the special anti-smuggling campaigns. Special joint campaigns such as "National Sharp Sword" and "National Warriors" have been launched to combat smuggling activities involving refined oil products, foreign garbage, guns and drugs.

Second, we will advance comprehensive regulations. We will give full play to the comprehensive role of customs ports in their supervision, inspection and quarantine as well as auditing, and will promote all-round monitoring so as to form a multi-faceted anti-smuggling network.

Third, we will strengthen comprehensive governance. Setting the National Anti-Smuggling Office in the GACC, we will further encourage local governments to undertake their primary responsibility of comprehensive anti-smuggling control, and cooperate with the public security department, coastguard authorities, and other law enforcement departments to form a synergy.

Through these efforts, we will establish a comprehensive anti-smuggling network, making it impossible for smugglers to hide and their activities to go unnoticed. Thank you.

Cover News:

We have noticed that in recent years, customs authorities have been focusing on facilitating customs clearance and improving the business environment at ports. May I ask what new measures customs authorities are planning to introduce next? How can we continue to optimize the business environment at ports? Thank you.

Yu Jianhua:

This questions is very important. Creating a good and convenient business environment at ports is the main work of customs. Mr. Zhao will answer this question.

Zhao Zenglian:

The business environment at ports is directly related to the interests and sense of fulfillment of the majority of business entities. It has been a matter of broad concern across all sectors of society for some time. Over recent years, customs, in close cooperation with all parties, has launched a series of innovative measures aimed at optimizing the port business environment and has achieved certain results.

These measures can be summarized in several aspects: five consecutive years of special actions to promote cross-border trade facilitation; streamlining regulatory documents of import and export links; significantly reducing the overall clearance time of import and export goods through ports; further promoting the reform of customs clearance facilitation; standardizing and reducing the cost of import and export links; and continuing to improve informationization of port management.

Thanks to these measures, port clearance time is shorter, customs clearance costs are lower, and customs clearance procedures are more convenient. The effectiveness of these efforts was also acknowledged in this year's government work report .

In regards to optimizing the business environment at ports, there is always room for improvement, and we are constantly striving to refine our goals and maintain persistence. In the next step, we will continue to launch new and effective measures, which can be summarized in 15 words: optimize facilities, build platforms, promote connectivity, strengthen cooperation, and improve efficiency.

First, we will optimize port facilities. We are working with relevant parties to accelerate the expansion of important border port construction projects and further improve border crossing capacity. We are guiding the implementation of the free trade port layout program in Hainan province to accelerate the construction of the free trade port and to provide port facilities to realize independent customs operations as scheduled.

Second, we will build a service platform. Mr. Yu just mentioned the establishment of a single window for international trade. We will further play its role as a comprehensive service platform for export tax rebate declarations and automatic capture of invoice information to facilitate the process for businesses to apply for tax rebates. We will optimize services related to "customs clearance + logistics" and "foreign trade + finance" to provide enterprises with customs clearance and logistics information inquiries, export credit insurance, cross-border settlements, and financing services.

Third, we will promote internal and external connectivity. We are working with all parties to actively promote the reopening of land border ports. At present, land border crossings for freight have resumed as long as conditions permit and the relevant passenger transport routes have also resumed opening. We will further promote the development of cross-border trains, such as China-Europe freight trains and the new land-sea transit routes for the western region, and support the development of sea-rail combined transport and other forms of multimodal transport around the world.

Fourth, we will strengthen international cooperation. We are vigorously promoting international cooperation on smart customs, smart borders, smart connectivity based on the World Bank's new assessment system for the business environment to coordinate and promote the construction of smart ports. We are steadily promoting green lanes for fast customs clearance of agricultural and sideline products, promoting single window cooperation between China and countries along the Belt and Road, and promoting the exchange and sharing of documents related to cross-border trade.

Five, we will improve customs clearance efficiency. Based on preliminary assessments, we will continue to promote shipside direct deliveries, direct loading upon arrival, combined ports, and other customs clearance facilitation reform pilots. We will guide various regions to publish the port clearance process and the main operational time limits based on practical situations. By stabilizing customs clearance time within a reasonable range, we can provide enterprises with relatively stable customs clearance expectations. Thank you.

Zhonghongwang:

We noticed that in 2022, in response to backlogs of dangerous goods exported at some ports, customs organized a 100-day campaign for the comprehensive management of dangerous goods at ports. What is the specific content of this campaign, and how effective has it been so far? After the end of the special campaign, will the results be fixed as a long-term mechanism to continue to play a corresponding role? Thank you.

Yu Jianhua:

Port security is indeed a major responsibility of customs, and we have a high sense of responsibility to prevent and resolve risks in this area. Let's invite Mr. Sun to answer the questions.

Sun Yuning:

Coordinating development and security and giving full attention to every-minute workplace safety is an important instruction General Secretary Xi Jinping made for workplace safety. Customs have kept this instruction in mind, adhered to the principle that safety management must go with business management, and continuously ensured workplace safety at ports with a sense of responsibility to always remain alert.  

Since last year, some imported dangerous goods have been kept for long periods of time at ports due to the pandemic, and along with scorching weather, risks to workplace safety have risen. In response, we launched a 100-day special action campaign to comprehensively manage dangerous goods at customs ports across the country, cleared more than 2,400 batches of dangerous goods accumulated at ports because of the pandemic, investigated and found more than 1,600 batches that were not cataloged or spuriously reported, and filed over 500 administrative punishment cases. The overall clearance time for dangerous goods has been reduced by more than 60%, ensuring the safe and stable operation of ports.

We believe that the end of the 100-day special action campaign is not the end of our efforts. China is a big trader of dangerous goods. With the accelerated economic recovery, the country's import and export of dangerous goods have increased remarkably. At the same time, despite efforts to hit back against all types of illegal behavior, illegal issues still exist, such as companies not reporting, lowering the danger level while reporting, or underreporting dangerous goods, which has posed a serious challenge to customs' safe and efficient regulation. This year, we will focus on our work in the following three respects:

First, we will continue to enhance integrated management. Last year's 100-day special action campaign addressed the problem of dangerous goods stored for long periods of time at ports. This year, we launched a half-year special action to crack down on unreported or spuriously reported dangerous goods. We will combine efforts to crack down, regulate, and deter and fully strengthen risk prevention and control, on-spot supervision, and follow-up inspections to improve the regulation chain and realize coordination in law enforcement of customs nationwide. In the meantime, coordinated law enforcement will be enhanced to cement regulatory networks for workplace safety with relevant departments. 

Second, we will advance regular governance. The effective experience and practices gained from special actions should be fixed as regular governance measures. This aims to prevent the recurrence of the accumulation of goods at ports and keep up the pressure against unreported or spuriously reported goods so as to smooth the way for law-abiding companies and make law-breakers pay the price. Meanwhile, we will improve the regulatory efficiency of the entry and exit of dangerous goods and deepen the reform of the relevant supervision and inspection model. Currently, we have launched pilot programs at five ports, including Shanghai, and will soon summarize and assess the experience to apply these steps across the country. 

Third, we will prevent major safety risks. To be specific, while comprehensively managing dangerous goods at ports, we will focus on health and quarantine, animal and plant quarantine, food safety, law enforcement safety, laboratory safety, and other key areas. We will repeatedly and continuously ensure the identification, ranking, and elimination of security risks, prioritize prevention, and stick to the bottom line of safety and the red line for regulation.

Thank you. 

Phoenix TV:

Data recently released by the GACC showed that China's total foreign trade dropped by 0.8% in the first two months of this year. We also noticed many media reports of an increasing number of empty containers at ports, triggering the public's concern over this year's imports and exports. What is the GACC's judgment regarding this year's foreign trade? Thank you.  

Yu Jianhua:

Thank you for your question. This year's foreign trade is of deep public concern. As you said, the GACC has issued data for the first two months of this year, which was interpreted by the relevant departments. The GACC has closely monitored foreign trade developments since March. Overall, we believe that foreign trade has gotten off to a stable start and presented positive growth trends. In terms of scale, the total export value in the first two months surpassed our expectations and increased by 0.9%, hitting a record high. The total import and export value in the first two months exceeded 6 trillion yuan, only the second time in history. The peak for the same period before the pandemic was less than 5 trillion yuan. Regarding the composition, as China took the lead in reopening the economy during the pandemic, the export of anti-pandemic supplies and stay-at-home economy products significantly increased, raising the foreign trade baseline. Based on our calculations, excluding one-time factors, imports and exports in the first two months of this year grew by more than 10%. As for trends, based on weekly monitoring, China's foreign trade rebounded since February and increased by over 15% in the last week in February compared with the previous week. As to neighboring countries, China's foreign trade is performing better than neighboring economies that have released relevant data. 

Certainly, foreign trade does face many difficulties and challenges, with the weakening of foreign demand being the most concerning. High global inflation and sluggish growth in major economies have continued to impact global trade. The WTO recently predicted that global trade in goods during the first quarter of this year will be weak, and it expected it to grow by a mere 1% for the entire year. In addition, some countries' decoupling with others and severing supply chains, geopolitical risks, and recent fluctuations in the financial markets of some Western countries have impacted the global trade environment, which is also an external challenge for promoting stability and improving the quality of China's foreign trade.

However, we must also see the positive side. In the first two months, more companies have entered the field of foreign trade in terms of business types, and 46,000 new foreign trade businesses have been registered with Customs authorities, which shows that people's confidence is accumulating and recovering. In terms of orders, according to our tracking and monitoring, the proportion of companies with increasing export orders has continued to rise. In terms of new kinetic energy, the total exports of electric vehicles, lithium batteries, and solar cells increased by 60%. The imports and exports of cross-border e-commerce of concern to the public increased by 15.8%. As for trade diversification, China's imports and exports to countries along the Belt and Road increased by more than 10%, and the total imports and exports to other RCEP members increased by more than 3%.

You also mentioned the issue of empty containers, which we are also paying attention to. This is due to reasons including an excessive amount of new containers that were put into use in the previous period, lower domestic storage cost, and the short-term return of empty containers in large quantities after the easing of the epidemic situation abroad, as well as seasonality. A large number of empty containers are ready to depart at our ports, which to some extent can be viewed as a positive reflection of the international market's continued optimism about China's export capacity in the next stage. According to the latest customs data, since late February, the volume of export containers being used has continued to grow.

On the whole, the foreign trade situation remains severe and complicated, but it also contains many opportunities, and the difficulties are more global in nature. In comparison, China still possesses an obvious competitive advantage. With the overall improvement of China's economic situation, the momentum of the stable start of foreign trade in the first two months is expected to continue. Therefore, we are fully confident in achieving the goal of stabilizing and improving the quality of China's foreign trade this year. Thank you.

Shenzhen Satellite TV Zhinews: 

We have noticed that many young people are fond of keeping exotic pets nowadays. At the same time, we have also noticed that this year's No. 1 Central Document included the issue of exotic pets for the first time. How does the customs prevent the invasion of alien species caused by exotic pets and ensure the biological security of China's borders? Thank you.

Yu Jianhua:

Exotic pets are a threat to China's biological security. The GACC attaches great importance to the issue and has adopted a series of measures to intercept them. For details, I will invite Mr. Zhao Zenglian to answer your question.

Zhao Zenglian:

Thank you for your question, and I appreciate your interest in this topic. "Exotic pets" are a new term and a trending topic. They are called "exotic" because they are different from traditional companion animals such as cats and dogs. They are considered special because some of them were once feared and are now kept as pets. These include such animals as snakes, lizards, and horned frogs. These exotic pets are peculiar in appearance, colorful, and unique.

Just now, you said that the No. 1 Central Document mentioned "exotic pets" for the first time, which reflects that exotic pets are no longer just simple household pets but rather come with other concerns. These are mainly reflected in three aspects. First, these exotic pets are mostly foreign species, which poses a big threat to biodiversity of organisms. When such exotic pets escape or are abandoned in nature, they may multiply and spread rapidly without natural enemies, threatening to local ecosystem. Second, they threaten the safety of agriculture, forestry, animal husbandry, and fishery. Once in nature, they can pose a huge threat to local species and even leading to a sharp decline in their populations. Third, they pose a threat to the health and safety of the people. Some of these animals are aggressive, such as the fire salamanders and messor barbaruses, and others are highly poisonous, such as the giant centipedes and poison dart frogs. In addition, some exotic pets carry germs that can threaten people's lives.

Customs must take action when there are calls from the central government and societal concerns. We have taken a series of measures to strictly prevent the invasion of alien species such as "exotic pets." First, we have strengthened port inspections, and customs have used technological means such as X-ray and CT machines to prevent "exotic pets" from entering the country through mail. Customs supervise over 400,000 pieces of mail arriving from overseas every day. Second, we have carried out special operations, such as "Green Shield at Entry at the Border" and taken comprehensive measures to prevent the delivery of "exotic pets" in cross-border e-commerce, to crack down on criminal gangs and rings that illegally import "exotic pets" and other alien species. Third, we strengthened joint prevention and control. Internally, we enhanced inter-departmental cooperation to form law enforcement synergy. Externally, we strengthened source control to ensure that overseas competent authorities shoulder their responsibilities. Fourth, we have created a joint social governance atmosphere: If no one buys them, no one will sell them. Customs used a combination of online and offline methods to continuously strengthen publicity and education for delivery companies and inbound travelers and make every effort to enhance public awareness of biosafety.

In 2022, customs intercepted 991 types of "exotic pets" and other alien species in 2,012 cases, including large ants measuring 4 centimeters long, large beetles measuring 10 centimeters long, and large centipedes measuring over 30 centimeters long. I have brought some pictures here to show you today. The "exotic pets" we intercepted were safely and strictly disposed of according to laws and regulations.

Next, customs will resolutely implement the deployment and requirements of the "No. 1 central document," strengthen port inspections, crack down on illegal activities, and firmly guard the nation's gateways. We will continue strengthening policy interpretation, publicity, and education, exposing typical cases, and enhancing public awareness of ensuring biosafety.

I would also like to take this opportunity to make a public call through our media friends: Everyone has a responsibility in ensuring biosafety and can contribute. I hope that "exotic pet" enthusiasts will not purchase illegally imported small animals and will not harm nature with their personal hobbies. Thank you.

Shou Xiaoli:

The last two questions.

National Business Daily:

Could you provide an update on the current status of the development of China's special customs supervision zones? What are the difficulties and pain points in addressing the imbalances of developing these zones? What achievements have been made so far? Thank you.

Yu Jianhua:

Special supervision zones represent a crucial responsibility for customs supervision. As our nation continues to open up, an increasing number of these zones have been established, each with unique circumstances, and customs supervision pressure remains high. I will invite Mr. Sun Yuning, who oversees this work, to answer the questions.

Sun Yuning:

Thank you for your questions. With China's reform and opening-up policies, special customs zones emerged and after more than three decades of development, they have become an important platform and carrier for opening up to the outside world. Last year, the total import and export value of these special zones reached 8.4 trillion yuan, accounting for 20% of China's total foreign trade value. These zones, which account for less than 0.005% of the country's territorial area, contributed one-fifth of the country's total foreign trade.

To adapt to the development needs of foreign trade in different periods, China has established six kinds of special zones: bonded zones, export processing zones, bonded logistics parks, bonded port zones, comprehensive bonded zones, and cross-border industrial zones. Following the requirements of scientific and coordinated development, we are actively implementing the arrangements and requirements of the State Council and promoting the transformation and upgrading of various types of special zones into comprehensive bonded zones. Currently, there are 167 special zones in the country, of which 156, or 93.4% of the total, are comprehensive bonded zones, covering 31 provinces, municipalities, and autonomous regions.

In the new era, the development of special zones has shown three main characteristics. First, the scale of the zones continues to expand. Last year, the total import and export value of special zones doubled from 2012, and their proportion of foreign trade increased from 15.7% to 20%. Second, the industrial structure continues to be optimized. Bonded R&D, bonded maintenance, "Bonded Plus," and other industries are developing, and emerging business forms such as financial leasing and cross-border e-commerce are booming, showing a diversified development trend. In 2022, the total import and export value of bonded maintenance reached 198.4 billion yuan, a year-on-year increase of 32.7%. Third, the zones' development is more coordinated. There is an evident trend that the zones leverage the core role of leading enterprises to drive the clustered development of upstream and downstream enterprises. In provinces and municipalities such as Sichuan, Chongqing, Henan, and Shaanxi, the proportion of the total import and export value of special zones exceeds 50% or even 60% of the local foreign trade import and export total value. 

You mentioned that there are still imbalances in developing special zones. The development of special zones in the eastern region of China is better than those in the central and western regions. Uneven development is also a problem for some provinces where multiple special zones were set up. Also, some special zones face issues of insufficient development, such as reliance on a single industry, prominent homogenization phenomena, inadequate industrial supporting facilities, and unclear competitive advantages.

Regarding these issues, we will focus on the following three aspects. First, we will proactively contribute to the "dual circulation" development paradigm. We will accelerate our efforts to introduce reform measures for the high-quality development of comprehensive bonded zones in the new era, proactively join the unified domestic market, and promote the integrated development of domestic and foreign trade. Second, we will proactively support transforming and upgrading certain special areas. We will scale up support for the innovative development of the "Bonded Plus" business form. We will also foster industrial clusters such as those involving research and development in bonded zones, help make breakthroughs in core technologies in key areas, and contribute our part to achieving sci-tech self-reliance. Third, we will proactively promote the construction of smart comprehensive bonded zones. Taking deepening reform in comprehensive bonded zones as a focal point, we will develop new models for customs supervision, strengthen the enabling role of science and technology, and keep improving the business environment and boosting enterprises' sense of gain. Thank you.

Guangdong Radio and Television (GRT):

We noticed that the chief executives of the Hong Kong and Macao special administrative regions (SARs) recently met with Mr. Yu. What achievements has the GACC made in supporting the development of the Guangdong-Hong Kong-Macao Greater Bay Area? What measures will be taken next? Thank you.

Yu Jianhua:

Thank you for your interest in this issue. Last week, I met with Ho Iat Seng, chief executive of the Macao SAR, and his Hong Kong counterpart John Lee. The development of the Greater Bay Area is a topic we all care about. As one of the moves to advance "one country, two systems," the Greater Bay Area is home to three customs territories with three kinds of currency in circulation. The practice is the first of its kind for the construction of bay areas around the world. Last year, the foreign trade volume of the nine mainland cities in the Greater Bay Area, Hong Kong, and Macao reached $2.5 trillion, accounting for 5% of the world's total. It is fair to say that the Greater Bay Area is one of China's most open and economically vibrant regions. The customs authorities will shoulder their share of responsibility and play a greater role in contributing to the development of the Greater Bay Area.

We have made efforts in the following two areas in recent years.

First, to facilitate the flow of factors, we have expedited efforts to develop new customs supervision regulations and rolled out 54 measures to support establishing major cooperation platforms in Hengqin, Qianhai and Nansha. We have developed new customs clearance models, such as those combining different ports and offering one-stop clearance services, which have been implemented across the nine mainland cities in the Greater Bay Area. We also extended the Single E-lock Scheme (SELS ) to customs authorities between Guangdong and Hong Kong, as well as between Guangdong and Macao. The so-called SELS refers to the practice employed by customs authorities in the two cities, using e-locks on cross-border vehicles to strengthen supervision during transit. Vehicles under such a scheme can enjoy express customs clearance services in ports on the opposite side without undergoing inspections or unpacking examinations. This is one of the measures for trade facilitation, and we will extend this trial scheme to more areas. We have also successfully implemented the policy allowing private cars from Macao to enter and leave the mainland via the Zhuhai highway port of the Hong Kong-Zhuhai-Macao Bridge. A total of 53,000 private cars from Macao have entered and left the mainland in this way since the beginning of this year. We have also established express channels for fresh agricultural products. Moreover, we have carried out timely customs inspection and clearance services, making every effort to ensure supplies to Hong Kong and Macao.

Second, with regard to safeguarding trade security, the customs authorities of Guangdong, Hong Kong, and Macao have stepped up risk analysis and coordination efforts, and are exploring the development of an integrated risk prevention and control system for the Greater Bay Area. We have improved the long-term coordination mechanism to combat smuggling and launched joint campaigns, including the "San Cha Ji" (Trident) and "Qingwan" (Clean Bay) operations, among the three areas, in a bid to crack down on various illegal activities, such as maritime cross-border smuggling in areas including Guangdong, Hong Kong and Macao.  

Currently, the construction of the Guangdong-Hong Kong-Macao Greater Bay Area is being carried out at an accelerated pace. In the next step, the customs authorities will closely collaborate with related sectors to enhance the "hard connectivity" of facilities and the "soft connectivity" of cooperation. We will make efforts in three areas to help build a top-tier bay area and world-class city cluster in Guangdong, Hong Kong and Macao.

First, we will focus on the development of platforms. We will double our efforts to roll out pilot trials in the Hengqin Cooperation Zone. We will work towards promoting the implementation of the policy allowing goods from overseas and from FTZs to enter and exit China without customs supervision, while goods entering China from FTZs will be subject to integrated customs management. We will also support the innovation of customs supervision systems in the Qianhai Cooperation Zone and contribute to constructing an international shipping and logistics hub in Nansha.

Second, we will facilitate customs clearance. We will strengthen mutual recognition of customs inspections between the three regions and proactively extend the SELS to customs authorities. We will keep implementing the policy that allows private cars from Macao to enter and leave the mainland via the Zhuhai highway port of the Hong Kong-Zhuhai-Macao Bridge and expedite efforts to extend this policy to private cars in Hong Kong. We will further mutually recognize Authorized Economic Operator (AEO) status and deepen cooperation in single-window customs clearance system. We will work to build connectivity in trade data and explore methods that help enterprises complete declarations to both customs as well as inspection and quarantine authorities with a single submission. We will also optimize and simplify customs clearance models and facilitate the flow of people and goods. We will strengthen coordination and cooperation and jointly make effective use of and manage the Hong Kong-Zhuhai-Macao Bridge, which is a bridge of dreams coming true, concerted efforts, self-confidence, and rejuvenation.

Third, we will strengthen our cooperation with law enforcement. We will enhance information sharing and boost law enforcement coordination. We will also strengthen cooperation among Guangdong, Hong Kong and Macao in fields such as inspection and quarantine, intellectual property rights protection, and combating smuggling. These efforts will jointly maintain a sound development environment in the Greater Bay Area.

Thank you.

Shou Xiaoli:

Thank you to all the speakers and journalists. Today's press conference is hereby concluded.

Translated and edited by Wang Yiming, Wang Qian, Qin Qi, Wang Wei, Cui Can, Zhang Junmian, Zhang Tingting, Liu Qiang, Liu Caiyi, Yang Xi, Xu Xiaoxuan, Wang Yanfang, Yan Bin, Zhang Rui, Yuan Fang, Zhu Bochen, Zhang Rui, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Ms. Cao Shumin, vice minister of the Cyberspace Administration of China (CAC)

Mr. Yue Zhongming, director of the Economic Law Department of the Legislative Affairs Commission of the Standing Committee of the National People's Congress  

Mr. Wang Xiaoguang, director general of the Bureau of Law Popularization and Rule of Law of the Ministry of Justice (MOJ)

Mr. Li Changxi, director general of the Bureau of Law-Based Cyberspace Governance of the CAC  

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 16, 2023

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, the SCIO released a white paper titled "China's Law-Based Cyberspace Governance in the New Era," and organized this press conference to walk you through its main content. The white paper delves into Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and thoroughly puts into practice the guiding principles of the 20th National Congress of the Communist Party of China (CPC). Centering closely on Xi Jinping Thought on the Rule of Law and a series of important remarks on building China's strength in cyberspace made by General Secretary Xi Jinping, the document outlines the nation's integrated efforts to advance cyber legislation, law enforcement, judiciary work, as well as programs to spread legal knowledge via the internet, publicize cyber laws, and cultivate the public's awareness in laws. It introduces China's positive progress in ensuring law-based cyberspace governance and the country's markedly enhanced capacity in developing rule of law in cyberspace. It also notes that China proactively carries out international exchanges and cooperation on law-based cyberspace governance, contributing ideas and solutions to global internet governance.

At around 18,000 Chinese characters, the white paper consists of a preface, main body and conclusion. Specifically, the main body is divided into six parts: "Upholding the Rule of Law in Cyberspace," "Consolidating the Legal System for Cyberspace Governance," "Keeping Order in a Rule-Based Cyberspace," "Defending Fairness and Justice in Cyberspace," "Promoting Public Awareness and Competence in Law-Based Cyberspace Governance" and "Increasing International Exchanges and Cooperation in Law-Based Cyberspace Governance."

The white paper is published in eight languages — Chinese, English, French, Russian, German, Spanish, Arabic and Japanese — by the People's Publishing House and Foreign Languages Press. It is available at Xinhua Bookstores across the country.

To help you better understand the document, we have invited Ms. Cao Shumin, vice minister of the Cyberspace Administration of China (CAC), to walk you through the relevant information and take your questions. Also joining us today are Mr. Yue Zhongming, director of the Economic Law Department of the Legislative Affairs Commission of the Standing Committee of the National People's Congress (NPC); Mr. Wang Xiaoguang, director general of the Bureau of Law Popularization and Rule of Law of the Ministry of Justice (MOJ); and Mr. Li Changxi, director general of the Bureau of Law-Based Cyberspace Governance of the CAC.

Now, I'll give the floor to Ms. Cao Shumin for a brief introduction.

Cao Shumin:

Ladies and gentlemen, friends from the media, good morning. It is my pleasure to attend this press conference today. The white paper "China's Law-Based Cyberspace Governance in the New Era," released today, is the country's first of its kind regarding law-based cyberspace governance.

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to law-based cyberspace governance and made a series of major arrangements. Committed to upholding the rule of law in cyberspace, China has seen historic achievements in law-based cyberspace governance. The white paper systematically summarizes the concept and practices of China's law-based cyberspace governance since the country was fully connected to the internet in 1994 and especially in the new era, which has offered Chinese ideas and solutions to global internet governance. Next, I will brief you on the document's main content from three aspects.

People-centered development. In China, we must ensure that people's interests and wishes are reflected, their rights are protected, and their wellbeing is enhanced in every aspect throughout the entire process of law-based cyberspace governance,  so that the people's sense of fulfillment, happiness, and security can be strengthened.

Further development of the internet. The essence of law-based cyberspace governance is to guarantee the healthy and orderly development of the internet. Under law-based cyberspace governance, we will ensure the innovation-driven growth of cyberspace under the rule of law.

Proceeding from realities. Based on the realities of our cyberspace development practices, China handles the relationships between development and security, freedom and order, openness and autonomy, and administration and service in an appropriate manner. We have employed law-based thinking and approaches to deal with the problems in internet development.

Innovation-driven cyberspace governance. By focusing on new situations and problems of law-based cyberspace governance in the new era, we have made accelerated efforts to promote innovation in the concept, content, approach, and methods of law-based cyberspace governance so as to raise its capacity for internet governance in all areas. 

Openness and cooperation. China has played an active part in working with other countries to formulate rules for cyberspace governance and engaged in international exchanges and cooperation in law-based cyberspace governance, drawing from the experience of other countries and pioneering a distinctively Chinese model of internet governance in line with international best practice.

Second, China's achievements in law-based cyberspace governance in the new era. 

China has taken accelerated efforts to promote cyber legislation. We have promulgated more than 140 laws on cyberspace since 1994, forming a cyber legislation framework with the Constitution as the foundation, supported by laws, regulations, and rules, endorsed by traditional legislation, and underpinned by specialized cyber laws. The groundwork for cyber legislation has been laid.

China has been strengthening law enforcement in cyberspace. We have carried out actions against practices that illegally collect and use personal data, punishing online copyright infringement and piracy. Actions have been taken against the monopoly and unfair competition in the field of the platform economy. We have also launched Operation Qinglang special campaigns. Accelerated efforts have been taken to establish and improve a system for comprehensive cyberspace governance, and a sound cyber environment has been maintained.

China has fully implemented cyber justice. We have improved the rules of cyber justice, established internet courts, and promoted digitalizing procuratorial work. We have carried out activities to combat cybercrime in accordance with laws, strengthened judicial protection of minors' rights and interests in cyberspace, and safeguarded the people's rights and interests in cyberspace. 

China has promoted legal education in cyberspace in an innovative manner. We have carried out internet plus public legal education and strengthened legal literacy through online media, raising public awareness and readiness regarding the rule of law.

Third, China is fully engaged in international exchanges and cooperation in the field of law-based governance of cyberspace.

China is playing an active role in rule making. We resolutely safeguard the international system with the United Nations at its core and support the participation of all countries in global cyberspace governance on an equal footing. We have also taken an active part in the formulation of regional cyberspace governance rules.

China has conducted extensive exchanges and cooperation. We have increased international law enforcement and judicial cooperation on cybersecurity to crack down on cyberterrorism. We also cooperate with the United Nations Children's Fund and other organizations to jointly protect the rights and interests of minors in cyberspace. 

Third, we have created platforms for dialogue. By building exchange platforms, including the World Internet Conference, China has played an active role in promoting understanding and mutual trust in the rule of law in cyberspace between different countries. 

The 20th CPC National Congress made new plans for promoting China's strength in cyberspace and the rule of law. China stands ready to work with the international community in following the global governance philosophy featuring extensive consultation, joint contribution and shared benefits, and jointly promote law-based governance of the global internet so that digital development can deliver greater benefits to people in all countries. 

Next, my colleagues and I will take your questions. Thank you.

Xing Huina:

Thank you. The floor is now open for questions. Please identify the media outlet you represent before asking your questions.

Legal Daily:

The white paper summarizes the philosophy and practice of law-based cyberspace governance since China became fully connected to the internet, particularly since China has entered a new era, contributing Chinese solutions and wisdom to global internet governance. As such, what were the major considerations for releasing the white paper "China's Law-Based Cyberspace Governance in the New Era"? Thank you.

Cao Shumin:

Thank you. I will answer the question. Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has put forward a range of new philosophies, thoughts, and strategies in the great practice of law-based governance on all fronts and building cyberspace strength, and formed Xi Jinping Thought on the Rule of Law and the important ideas of General Secretary Xi Jinping on building China's strength in cyberspace. These thoughts have guided China to further enhance law-based cyberspace governance. The law-based cyberspace governance system with Chinese characteristics has continued to improve. Cyber legislation, law enforcement, and judiciary work have advanced alongside programs to spread legal knowledge via the internet. We have deepened international exchange and cooperation on this front. Historic achievements in law-based cyberspace governance have been made in the new era. A trail has been blazed in law-based cyberspace governance with Chinese characteristics in line with international best practices. 

Releasing the white paper "China's Law-Based Cyberspace Governance in the New Era" is conducive to domestic and international understanding of China's law-based cyberspace governance. Thank you. 

Thecover.cn:

Over the past decade in the new era, China has advanced the rule of law and improved legislation related to emerging sectors such as the internet. What progress has been made in law formulation, and what role has it played? Thank you. 

Yue Zhongming:

Thank you for your question about the legislation of cyber laws. Since the 18th CPC National Congress, the National People's Congress and its Standing Committee have implemented decisions and plans of the CPC Central Committee on building China's cyberspace strength and making China a digital country. We have advanced legislation of cyber laws, continued to optimize relevant laws, systems, and regulations, and formed a complete system of cyber laws. Remarkable achievements have been attained in cyber legislation providing legal guarantees for sustainable and healthy internet development. In the past decade, we have promulgated five laws in this field. 

First, the Cybersecurity Law was enacted in 2016. It has implemented the real-name system for internet users, established systems and measures for ensuring the security of online products and services, network operation and key information infrastructure, and safeguarded online information security.

Second, the Electronic Commerce Law was promulgated in 2018. It has provided a full set of regulations on e-commerce operation, with clear provisions on the responsibilities of e-commerce platform operators and business owners on these platforms. It has maintained fair market competition and strengthened the protection of consumer rights and interests, as well as intellectual property rights.

Third, the Data Security Law was formulated in 2021. In response to the risks and hidden dangers in data security, it has established mechanisms for categorized and classified data protection, risk monitoring and early warning, emergency response, and data security review. At the same time, it has facilitated data security and development, promoted the security and openness of government data, strengthened China's capacity for ensuring data security, and advanced the rational and effective use of data in accordance with the law.

Fourth, the Personal Information Protection Law was enacted in 2021. Focusing on the concerns of the people, it has further defined and refined principles on protecting personal information and rules on the processing of personal information, and specified the rights and obligations for processing personal information. It has improved the mechanism for protecting personal information and safeguarded citizens' rights and interests in personal information.

Fifth, the Law on Combating Telecom and Online Fraud was promulgated in 2022. It has built a comprehensive governance system for the telecommunications, finance and internet sectors and was specifically created to fight telecom and online fraud. Focusing on this specific area, the law has provided strong legal support for preventing, curbing and punishing telecom and online fraud.

Apart from these five specific laws, the NPC Standing Committee has continued to amend traditional laws and regulations to cover the internet area. Over the years, a series of laws has been revised, including the Law on the Protection of Consumer Rights and Interests, the Law on Food Safety, the Law on Advertisement, the Law on the Protection of Minors, the Law Against Unfair Competition, the Anti-Monopoly Law and others. Through the revisions, relevant institutions and regulations have been improved with regards to the protection of consumer rights and interests in online transactions, food safety responsibilities of internet platforms, internet advertisements, the protection of minors in cyberspace, and unfair competition and monopoly on the internet. Meanwhile, the Civil Code and the Amendment to the Criminal Law have been formulated, outlining specific stipulations concerning the protection of civil rights and combating online criminal activities in new internet business forms. Thank you.

Red Star News:

Many NPC deputies and CPPCC members proposed enacting a special law against cyberbullying during this year's two sessions. At the end of last year, the CAC issued a notice on taking stronger steps to deal with cyberbullying. What measures will be taken by relevant departments to curb cyberbullying? Thank you.

Li Changxi:

That is a good question. Recently, cases of cyberbullying have attracted widespread attention from the public. Relevant authorities have attached great importance to that and taken proactive steps to fight cyberbullying. In November, the CAC issued a notice on taking stronger steps to control cyberbullying. Major websites and platforms have fully implemented the requirements and built and improved relevant prevention and control mechanisms. 28.75 million pieces of information related to cyberbullying have been intercepted and removed. 1.65 million notices have been issued to netizens reminding them to post appropriately. One-click prevention notices have been sent to 28,000 users. 22,000 accounts have been issued with severe punishments for cyberbullying. And the risk of cyberbullying over hot issues has been effectively prevented. Recently, departments of cyberspace affairs have guided major platforms to issue guides on preventing cyberbullying and to help netizens effectively protect themselves from cyberbullying in multiple aspects, including risk notifications, one-click prevention, private message protection, reporting and filing complaints. Going forward, the departments of cyberspace affairs will continue to urge websites and platforms to fulfill their primary responsibilities for fighting cyberbullying, regularly publish information on the prevention and control of cyberbullying, and expose typical cases in a timely manner to resolutely safeguard the legitimate rights and interests of netizens.

During the recently concluded "two sessions," we observed that the NPC deputies and CPPCC members put forward proposals to crack down on online violence and create a healthy online environment. Many of them emphasized the urgent need to accelerate targeted legislation on online violence. These proposals are truly meaningful. Our research has shown that, current comprehensive laws, such as the Civil Code, the Criminal Law, and the Law on Penalties for Administration of Public Security, as well as specialized laws, like the Law on the Protection of Minors, the Law on the Protection of Women's Rights and Interests, and the Law on the Protection of Heroes and Martyrs, along with relevant judicial interpretations issued by the Supreme People's Court and the Supreme People's Procuratorate on defamation, infringement of personal information, and violation of personal rights, have all made provisions on online violence. However, the existing laws and regulations still need to be more targeted, better coordinated, and more effective, in order to bring more satisfactory results to the public. 

Moving forward, we will further intensify our efforts to establish regulations and systems from the perspective of combatting online violence. We will promptly introduce relevant departmental regulations and collaborate with relevant departments to conduct research and strive to improve the legal system. We will also strengthen protection and relief for affected parties and respond in a timely manner to the feedback and demands of the people. Thank you.

CCTV:

My questions are, how has China achieved quite a few results in law-based cyberspace governance in less than 30 years after being connected to the internet, and can you share your experiences in this area? Thank you.

Cao Shumin:

Thank you for your questions. In China, we refine the law-based cyberspace governance as we proceed with our work. We innovate while carrying forward previous practical approaches, and have gained valuable experiences in the process. And these can be summarized as follows.

First, we have adhered to the overall leadership of the Party in this area. We have implemented the Party's requirements for governing the cyberspace and ensured that the Party's leadership is present throughout all links and all aspects of law-based cyberspace governance, ensuring that related work always advances in the correct political direction.

Second, our approach in this area has always been people-centered. The law-based cyberspace governance directly influences more than one billion internet users and concerns the total population of more than 1.4 billion. We have continued to carry out a series of special operations such as "Jingwang" (purifying the cyberspace), "Qinglang" (promoting internet civilization and pooling positive energy), and "Humiao" (protecting minors). We have increased efforts to address prominent issues that are complained about strongly by people, such as online pornography, rumors, and violence, telecom and internet fraud, algorithm abuse, and minors addicted to online games. Our goal is to create a safe, fair, healthy, civilized, and clean cyberspace for the people.

Third, we have adhered to the path of law-based internet governance with Chinese characteristics. Based on our experience regarding the development of the internet, we have promulgated basic, comprehensive, and overarching laws such as the Cybersecurity Law, the Data Security Law, the Personal Information Protection Law, the E-commerce Law, and the Anti-Telecom and Online Fraud Law. Our focus has been on improving the legal rules for the digital economy, establishing a legal system for protecting internet-based rights and interests, drawing the legal red line for cybersecurity, improving the norms for cyberspace governance, and promoting various systems to become more systematic, mature, and fully formed.

Fourth, we have adhered to a sound work pattern in advancing law-based cyberspace governance. We have coordinated the relationships between development and security, freedom and order, openness and autonomy, and administration and service in an appropriate manner. We have also adhered to governing the internet according to the law while improving the online environment by promoting civic morality. We have also encouraged the development of the internet with support and better regulation, and taken a coordinated approach to the rule of law at home and in matters involving foreign parties, so as to boost the innovative development of the internet through high-quality rule of law. So far, China's internet users have reached 1.067 billion. From 2012 to 2021, the compound annual growth rate of China's digital economy reached 15.9%. It has become a main driver of our economic growth. China's Internet of Things (IoT) now connects more cellular terminals than mobile phone users. The world's largest and most advanced fiber-optic broadband and 5G networks have been built in China, forming the world's largest, most widely applied, most innovative, and most vibrant network society.

Fifth, we have continued to promote innovation in the work of law-based cyberspace governance. We have accelerated all-around innovation in the concept, content, and measures of the rule of law in cyberspace. We have created and improved the rules on new technologies and new fields, established legal rules for deep synthesis and algorithm-based recommendation, and used network information technology to empower the traditional judiciary, so as to expand the new model of 'internet plus public legal education' and give the people direct access to the government's public legal education information .

Sixth, we have made cohesive efforts in law-based cyberspace governance. We have ensured that the whole country has been involved. We have also given full play to the enthusiasm, initiative, and creativity of various departments, local governments, enterprises, and internet users, and we have also coordinated and promoted the rule of law in various fields, such as online content and management, cybersecurity, and information technology , so as to keep the internet develop within the confines of the law. 

The valuable experience has been an important guarantee for advancing law-based governance in all respects and building up our strength in cyberspace in the new era. Such experience must persist over a long time and be continuously enriched, improved, and developed. Thank you.

Southern Metropolis Daily:

The internet has become a new space where people study, work, and live, and it has also become a new channel and new method for popularizing the law. Publicity and education on the rule of law via the internet have been long-term basic work for the law-based governance of cyberspace. Since the 18th CPC National Congress, what has been done to publicize the law via the internet?

Wang Xiaoguang:

Thank you for your care about our work on popularizing cyber laws. Since the 18th CPC National Congress, the Ministry of Justice and the National Office of Law Popularization have earnestly implemented Xi Jinping Thought on the Rule of Law and the important ideas of General Secretary Xi Jinping on building China's strength in cyberspace. They have taken the popularization and education on the rule of law on the internet as long-term basic work for the law-based governance of cyberspace, organized localities and departments to employ the internet to spread knowledge of the law, and enhanced people's awareness of and literacy in cyber laws and regulations. I will use four keywords, "system, platform, product, and activity," to brief you on our work in this regard.

First, in terms of institutional improvements, the system of online law popularization continues to improve. The Fourth Plenary Session of the 18th CPC Central Committee made a clear requirement to expand the applications of new media and new technologies for law popularization. The seventh five-year plan on improving legal awareness (2016-2020) emphasized promoting the campaign of spreading the knowledge of the rule of law via the internet. The eighth five-year plan (2021-2025) proposed to carry out smart legal publicity from an internet thinking and all-media perspective.

Second, in terms of platforms, we have given full play to various online platforms and media in law popularization. For example, many platforms such as the Xuexi Qiangguo app, people.cn, xinhuanet.com, and legaldaily.com.cn, have launched special columns focusing on the rule of law. The Ministry of Justice has strengthened the functions of its smart legal publicity platform, and facilitated information sharing with online platforms, such as China Court Trial Online and China Judgements Online . As of now, over 30,000 accounts for law popularization have been set up on online platforms, including Weibo accounts, WeChat official accounts, mobile applications and WeChat video channels. The total views of the WeChat official account "China legalinfo" reached 667 million in 2022, with its followers exceeding 30 million.

Third, in terms of products, we have provided a diverse range of online law popularization products. Combining the needs of different groups for law popularization, we have adopted various forms such as graphics, cartoons, comics, short videos, livestream, and online music to provide knowledge of the law, interpret relevant laws and regulations, and promote the socialist spirit of the rule of law through multiple channels such as microblogs, WeChat official accounts, and so on.

Fourth, in terms of activities, we have further integrated online and in-person law popularization activities. All localities and departments have conducted a variety of law popularization activities both online and in-person during important dates such as the National Constitution Publicity Week, the National Security Education Day, and the Civil Code Publicity Month. The CAC has actively implemented the responsibility system of "whoever enforces the law shall popularize the law," conducted a series of relevant activities, and adopted a case-based method to address the issues of public concern such as the use of the internet to spread illegal information, infringement of personal information rights, telecommunications network fraud, and internet protection of minors. All this work has greatly promoted law-based cyberspace governance.

Using the internet to popularize the law has increased the arrival rate, popularization rate and awareness rate of the knowledge of the law. The concept of the rule of law combining rights and obligations, individual freedom and social responsibilities has been well-received by the public. Respecting the law, abiding by the law, and learning and using the law have increasingly become the prevailing consensus and basic principle in cyberspace. Thank you.

People.cn:

According to the white paper, the groundwork for cyber legislation has been laid, contributing to and improving the socialist legal system with Chinese characteristics. I would like to ask, what are the characteristics of cyber legislation in the new era? What else needs to be done to advance the work and improve cyber legislation in the future? Thank you.

Li Changxi:

This is a very good question. A critical aspect of law-based cyberspace governance is legislation. The groundwork for cyber legislation has been laid. China has formulated a system of laws on cyberspace governance with distinct Chinese characteristics through the creation of basic, comprehensive, and overarching laws such as the Electronic Commerce Law, Electronic Signature Law, Cybersecurity Law, Data Security Law, and Personal Information Protection Law. It presents the following three characteristics.

The rank of cyber legislation has gradually moved up over time. Early-stage cyber legislation primarily consisted of administrative regulations and departmental rules, such as the Regulations on the Security and Protection of Computer Information Systems and the Provisions on Protecting the Personal Information of Telecommunications and Internet Users. Now, with the promulgation of laws such as the Cybersecurity Law and the Personal Information Protection Law, cyber legislation has played an increasingly overarching role built on a more solid foundation.

Secondly, cyber legislation values a scientific and democratic legislative process. The multiple challenges brought by the technological nature, rapid development, broad scope, complex regulatory objects, and the internet's constantly evolving issues require a scientific and democratic legislative approach to accurately address these issues. In the process of drafting cyber legislation, the Standing Committee of the National People's Congress, the State Council, and relevant departments have made the draft available to the public and solicited opinions from various parties through seminars and symposiums. This approach truly promotes development and ensures good governance through effective laws.

Thirdly, cyber legislation is innovative and forward-thinking. China places great importance on future needs and continuously explores and researches relevant legislation to address new problems and challenges. Cyber legislation keeps up with technological developments and practical needs, exemplified by the Data Security Law, which achieved a breakthrough in China's legal governance of data security from scratch. It made top-level institutional designs in important areas such as data classification and grading, important data protection, and data security review. As the world's first specialized legislation on data security, it also provides valuable insights and solutions for other countries and regions to consider.

In the future, we will continue to consider cyber legislation as an important part of China's socialist legal system. We will implement the strategic deployment of "exercising law-based governance on all fronts" and "stepping up legislation in key, emerging, and foreign-related fields" proposed in the report to the 20th CPC National Congress. We will attain the objectives of promoting development and regulating supervision simultaneously and continue to make progress in institutionalizing cyber legislation while further refining legislation in areas such as data, platforms, and technology. Thank you.

CRI:

Mr. Yue just mentioned the Law on Combating Telecom and Online Fraud formulated last year. I want to inquire further about the reasons behind its formulation and the specific measures it provides for combating telecom and online fraud. Thank you.

Yue Zhongming:

Thanks for your question. Telecom and online fraud has been rampant, and the general public hates it. The Law on Combating Telecom and Online Fraud, which was enacted last year, adheres to a problem-oriented, result-oriented and precise prevention approach. The law strengthens the systematic concept, pays attention to the source of treatment and comprehensive treatment, and carries out the comprehensive management of the whole chain of personnel, information, technology and funding chains related to telecom and online fraud. The main systems and measures include the following five aspects.

First, we have strengthened the responsibilities of all sectors. The responsibilities of each department, each unit, and each link have been clearly defined, and strict legal action will be taken against those who fail to fulfill their duties.

Second, we have intensified punishment. We have built comprehensive measures to punish and prevent criminals involved in telecom and online fraud and crack down on all kinds of illegal and semi-legal industries engaged in fraud.

Third, we have strengthened industrial governance. We have made institutional provisions for the outstanding problems reflected in each chain and each link. We have closed loopholes, established rules and regulations, and also stipulated corresponding responsibilities and penalties for non-performance of industry governance obligations.

Fourth, we have strengthened countermeasure technology. We have promoted sharing risk information and providing technical support for combating and curbing illegal and criminal activities.

Fifth, we have adhered to joint management and coordination. We have mobilized the forces and resources of all sectors of society, clarified responsibilities, and created a strong anti-fraud atmosphere in the whole society. Thank you.

Science and Technology Daily:

New technologies and applications, which have driven the internet's vigorous development, have also challenged internet governance. What experiences can China share in this regard? Thank you.

Li Changxi:

Thanks for your attention to new technologies and applications. To regulate new technologies and applications in accordance with the law, we should proceed from the overall situation of national and social development. We believe that we should not only strengthen the research and judgment of the situation, grasp and adapt to the trend of the development of new technologies and new applications, but also improve laws, regulations, policies and systems. We should improve the system and mechanism while promoting new technologies and new applications to better serve the high-quality development of the economy and society. 

First, we need to strengthen overall planning. We should adhere to the rule of law to promote the development and governance of new technologies and applications. With a focus on promoting development, we need to improve the regulatory system, thinking and methods and explore a regulatory model that adapts to the characteristics of new technologies and applications and is conducive to innovative development and fair competition. We will promote the formation of a collaborative governance situation where government management, corporate responsibilities, social supervision, and netizens' self-discipline work together. At the same time, we must practice the principles of extensive consultation, joint contribution and shared benefits in global governance and actively participate in the global governance of new technologies and applications.

Second, we need to improve the regulatory basis. According to the development needs, we should formulate and revise relevant legislation on a timely basis, refine relevant policies, explore and study specialized legislation on the application of new technologies, strengthen risk analysis and forward-looking research, and establish effective regulatory systems and rules in various fields of technology application.

Third, we need to improve the oversight mechanism. The oversight of new technologies and applications involves many subjects, making the situation complex and fast-changing. We should promote establishing a comprehensive, multi-tiered, and multifaceted system to regulate all stages, from start to finish, in all sectors. We need to put in place a multifaceted and comprehensive oversight system featuring coordination across different levels while actively exploring new types of supervision mechanisms.

Fourth, we need to innovate the means of oversight and supervision. Differential and tiered supervision shall be carried out according to the characteristics of new technologies and applications featuring dynamic changes, cross-sectoral integration, etc. We need to improve tiered regulatory tools and comprehensively use regulatory measures such as access permits, technology registration, and dynamic assessments to limit the risks brought about by technological development to an appropriate range. We need to leverage technology to control technology, use the new generation of information technology to improve and innovate existing regulatory tools, and make our regulation more digital and smarter. Thank you.

Hong Kong Bauhinia Magazine:

The public is both an audience and a participant in enhancing public awareness of laws on the internet. How can we fully mobilize the public to participate in raising public awareness of the law? Thank you.

Wang Xiaoguang:

Thank you for your question. This is a very good question. We know that China has the largest number of internet users in the world. Raising public awareness of the law requires a people-centered approach. Wherever the people are, promoting public awareness of the law must be followed up, and the work of increasing legal awareness must be extended. The internet has become the main battlefield for promoting legal awareness and has also become the largest growth area for raising legal awareness. Since the eighth five-year plan for increasing public knowledge of the law, we have firmly put the people at the center of our work of law popularization, paid more attention to using cases to explain the law around issues that the people are concerned about, and attached more importance to harnessing the advantages of online legal education, such as its broad-based participation, strong interaction, immediacy, and better services. The one-way publicity has been transformed into interactive, service-oriented, and scene-based communication. The public is no longer just a passive audience, but rather active participants, supporters, and advocates. We have realized that the vast potential for promoting legal awareness lies wthin the people and in cyberspace. Here, I will give two examples.

The first example is the MOJ's WeChat account called "China Law Popularization," which organizes special quizzes on China's Constitution and the Civil Code during important periods such as the Constitution Publicity Week and the Civil Code Publicity Month every year. In 2022, more than 1.7 billion entries were received. The WeChat account interacted with netizens and organized activities such as selecting selected comments from netizens, "My Offer for Law Popularization," and red envelopes for answering questions during the Spring Festival. Improving public participation and experiences increases people's satisfaction and happiness. Currently, the WeChat account is organizing a quiz about the Criminal Law, and all interested friends are welcome to participate.

The second example is that the MOJ and the National Office for Law Popularization have, in conjunction with the Publicity Department of the CPC Central Committee and the CAC have held legal-themed comic and micro-video collection and promotion activites for 18 sessions. The event has widely motivated internet users to innovate and collect their works online, of which the award-winning ones are exhibited and broadcast online. These works, created by internet users, are in turn used to educate them, which is coming from the public and going back to them. I think this vividly embodies the online mass line of public legal education for a new era. Thank you. 

China Daily:

The white paper released today mentions that China's law-based internet governance has developed into one with Chinese characteristics. We also noticed that China has introduced Cybersecurity Law, Data Security Law, Personal Information Protection Law, and other laws in recent years. Does this mean that China is competing with other countries and regions for discourse power in making cyberspace governance rules and promoting the Chinese internet model? Thank you.

Cao Shumin:

Thank you for your question. It is of public attention, and I will answer it. 

The rule of law is one of the important achievements of human civilization. It has become a global consensus to advance cyberspace development and governance with law-based thinking, mindsets, and approaches. At the same time, given the different national realities, political systems, and cultural backgrounds countries have, each country is entitled to choose a suitable path of internet governance and development. China's law-based internet governance has always been based on our national context that China is the world's largest developing country with the largest number of internet users. China's law-based internet governance has actively adapted to the trend of the information age, widely drawn from the advanced experience and mature practices of other countries in law-based cyberspace governance, and pioneered a distinctive Chinese model in line with international best practice, embarking on a road of law-based internet governance with Chinese characteristics. 

China's development of the rule of law has drastically increased its capacity in internet governance, which has ensured fast, sound, and orderly internet development in the country and contributed Chinese ideas and solutions to global internet governance. Countries around the world, boasting varied and distinctive variations on rule of law for their populations, should and can find a suitable path for the development and governance of the internet. "A single flower does not make spring, while one hundred flowers in full blossom bring spring to a garden." We will adhere to the guiding principles by General Secretary Xi Jinping on building a community with a shared future in cyberspace and take law-based cyberspace governance as a vital guarantee for advancing transformation of the global internet governance system and building a community with a shared future in cyberspace. We will respect sovereignty in cyberspace and revere other countries' rights to independently choose their own internet development path and governance model as well as the right to equally participate in global cyberspace governance. We will strengthen international exchanges and cooperation in law-based internet governance and work with the international community to relentlessly explore effective ways through which the internet can better benefit the people. We will make more influential, distinctive, and effective achievements in practicing the rule of law so as to actively contribute to build a cyberspace featuring justice and fairness, openness and inclusion, security and stability, and vigor and vitality.

Xing Huina:

Today's press conference is hereby concluded. Thanks to all the speakers and friends from the media. Goodbye. 

Translated and edited by Zhu Bochen, Gong Yingchun, Liu Jianing, Xu Kailin, Yuan Fang, Zhang Rui, Yan Xiaoqing, Qin Qi, Wang Yiming, Xiang Bin, Yan Bin, Xu Xiaoxuan, Wang Wei, Ma Yujia, Wang Yanfang, Liu Sitong, Zhang Junmian, He Shan, Liu Qiang, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Mr. Zhao Chenxin, vice chairman of the National Development and Reform Commission (NDRC)

Mr. Li Chunlin, vice chairman of the NDRC

Mr. Yang Yinkai, vice chairman of the NDRC

Chairperson:

Ms. Shou Xiaoli, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 6, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 10th briefing in the series "Embarking on the New Journey — A Government Perspective." We are honored to have invited Mr. Zhao Chenxin, vice chairman of the National Development and Reform Commission (NDRC); Mr. Li Chunlin, vice chairman of the NDRC; and Mr. Yang Yinkai, vice chairman of the NDRC, to brief you on promoting high-quality development to set the stage for building a modern socialist country in all respects, and take your questions.

Now, I'll give the floor to Mr. Zhao Chenxin for a brief introduction.

Zhao Chenxin:

Friends from the media, good morning. It is a pleasure to attend today's press conference with my two colleagues and speak with you. First of all, on behalf of the NDRC, we would like to take this opportunity to express our heartfelt thanks to friends from the press and all walks of life for their long-term care, support and assistance regarding the development and reform work.

Over the past year, China has encountered various challenges, including a turbulent global environment, and the complex and demanding domestic reform, development and stability agendas. However, with the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, our nation has responded effectively to these uncertainties and achieved remarkable progress in economic and social development. We have basically met our primary objectives and tasks for the year. Yesterday, the Report on the Implementation of the 2022 Plan for National Economic and Social Development and the 2023 Draft Plan for National Economic and Social Development, drafted under the efforts led by the NDRC, was submitted for review to the first session of the 14th National People's Congress (NPC) and members of the Chinese People's Political Consultative Conference (CPPCC). The report presents a comprehensive overview of the implementation of the 2022 national economic and social development plan, and a summary of the previous year's performance can be condensed into a few key points. The first noteworthy point is the overall strong performance of the economy. We reached a new level of GDP at 120 trillion yuan, which was an increase of 6.1 trillion yuan, equivalent to the annual GDP of a medium-sized country. Despite global inflation hitting a new four-decade high, China's consumer price index (CPI) only rose by 2%. China created 12.06 million new urban jobs in 2022, exceeding the government's annual target, and our balance of payments maintained a basic equilibrium. By the end of last year, our foreign exchange reserves exceeded $3.1 trillion. Overall, China's economy has performed exceptionally well among major economies. Achieving such remarkable progress amid numerous uncertain factors is a significant accomplishment that we should cherish. The second point is the steady improvement in the quality of our development. Innovation has played a vital role in leading our progress, and for the first time, China's investment in research and development (R&D) surpassed 3 trillion yuan, with the proportion of GDP rising to 2.55%. Our ranking in the global innovation index rose to 11th place. We have accelerated the pace of structural adjustments in various fields, such as industries, regions, investment, consumption and trade, while also promoting green, circular and low-carbon development. Additionally, we have also consolidated our gains in poverty elimination, improved the social security system, and enhanced the level of public services. Lastly, we have continued to consolidate the foundation of our secure development. Fiscal and financial operations remain stable, and our balance of payments is sound, providing a crucial foundation for our safe development. Grain production has achieved "19 consecutive bumper harvests," with a stable output of over 650 million metric tons for eight consecutive years. The building of the energy production, supply, storage and marketing system has accelerated, and the overall energy supply has been stable. The security and guarantee capabilities of important industrial and supply chains have been continuously improved.

The achievements during the year can also be viewed in a longer time frame, which can provide a more comprehensive, profound and objective understanding of our country's progress. Looking back over the past five years, it has been an exceptionally unusual and extraordinary period for our country. During this time, our nation has consistently adapted to the global and domestic situations, social conditions and public opinion to promote economic and social development. We have effectively and efficiently responded to multiple challenges, including the accelerating changes unseen in a century, the impact of the COVID-19 pandemic, and the domestic economic downturn. As a result, we have achieved an average annual economic growth rate of 5.2%, significantly higher than the global growth rate of around 2.3% over the same period. China's position as the world's second-largest economy, largest manufacturing country, and largest trader in goods has been further consolidated and improved. We have also made sustainable and healthy progress in various undertakings, resulting in a significant improvement in the people's sense of gain, happiness and security. Especially in the past three years, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, we have achieved major and decisive victories in epidemic prevention and control. Furthermore, looking at the last 10 years in the new era, the country has achieved historic achievements and undergone historic changes in economic and social development. It was a decade marked by a turn toward high-quality development. The economic output of China has continuously surged to new heights, and its contribution to world economic growth ranked first. In particular, we have secured a historic success in eradicating absolute poverty, achieving a miracle in humankind's history of poverty reduction. We have built a moderately prosperous society in all respects on schedule, providing a more comprehensive institutional guarantee, a more solid material foundation, and a more vibrant spiritual force for Chinese modernization.

This year marks the first year of implementing the guiding principles of the 20th CPC National Congress, a crucial juncture to implement the 14th Five-Year Plan (2021-25), and an important period to lay the foundation for building China into a modern socialist country in all respects. Therefore, it is of great significance to ensure economic performance. We will uphold the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the guiding principles of the 20th CPC National Congress and the Central Economic Work Conference, and follow a unique Chinese path to modernization. We will adhere to the general principle of pursuing progress while ensuring stability, fully and faithfully apply the new development philosophy on all fronts, accelerate the creation of a new development pattern, and work hard to pursue high-quality development. We will better balance both domestic and international situations, coordinate epidemic prevention and control with economic and social development, and development with security. We will comprehensively deepen reform and opening up to strongly boost market confidence. We will make sure that our implementation of the strategy to expand domestic demand is integrated with our efforts to deepen supply-side structural reform. We will make more efforts to stabilize economic growth, employment, and prices and effectively fend off and defuse major risks. We will strive to achieve an overall upturn in economic performance and effectively upgrade and appropriately expand China's economic output. We will continue to improve the people's well-being and ensure social stability, making sure our efforts to build a modern socialist country in all respects get off to a good start and making new and greater contributions with our concrete actions.

That's my introduction. Next, my colleagues and I would like to answer your questions.

Shou Xiaoli:

The floor is open for questions now. Please identify the media outlet you represent before raising questions.

China Media Group:

Since the beginning of this year, China's economy has continued to recover, with a bump in both investment and consumption. Will such economic recovery continue in the future? What do you think of the 5% annual GDP growth target ? What measures will the NDRC take to help achieve such a goal? Thank you. 

Zhao Chenxin:

Thank you for your questions. Your questions cover three specific issues: whether the economy will continue its recovery, how to comment on the growth target of around 5%, and what measures will be adopted to help achieve the goal. I will answer them one by one.

Over the past three years, China has fought an extraordinary battle against COVID-19. Our practices have fully demonstrated that the Party Central Committee's major judgments on the pandemic, major decisions on pandemic-related work, and major adjustments to response strategies were appropriate. Its effective measures have been recognized by the people and helped deliver great effects. Under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, China has achieved major decisive success in preventing and controlling the COVID-19 pandemic. At present, indeed, as you mentioned, as COVID-19 response measures have been improved and adjusted, and policies have been implemented effectively, leading to an accelerated resumption of transportation and logistics, and a steady improvement in economic operation. You also mentioned consumption and investment. We have seen sound momentum in consumption since the Spring Festival. Consumption related to tourism, transportation, restaurant, and retail services has increased substantially, laying a solid foundation for the first quarter of 2023 and even the entire year. From the perspective of investment, a host of major projects have started across the country recently. Measure, such as policy-backed and developmental financial instruments, medium- and long-term lending to the manufacturing sector, and equipment upgrading in key areas, have effectively ensured that projects are bolstered by funds and production factors. Such efforts have provided strong support to the economic recovery. All of the above have fully proved that China's economy has strong resilience and enormous potential, and the sound momentum for its sustainable and healthy economic growth has been maintained. Moreover, the fundamentals of China's economy remain unchanged, and they will maintain long-term growth. 

We can view the annual growth target of around 5% from three aspects. First, China remains a developing country with development high on its agenda. We need to keep long-term economic growth within a proper range on the basis of improving the quality and effectiveness of the development so as to achieve the targets and fulfill the tasks set at the 20th CPC National Congress. Meanwhile, we also need to maintain a certain growth rate to promote and expand employment, improve people's well-being, and fend off and defuse risks. Second, the target of around 5% is in accordance with economic development trends and the law of economic development. It is also conducive to guiding all sectors of society to put more focus on improving both the quality and the efficiency of economic growth so as to accelerate the building of the new development paradigm and promote high-quality development. Third, local governments have shown confidence in growth and have geared up for development. Moreover, people's congresses at the local level have made their economic growth target for this year. Based on our statistics and analysis, 27 of China's 31 provinces, regions, and municipalities directly under the central government have set a growth target higher than the national one, with 23 provinces aiming at 5.5% or above. Their strong confidence and practical measures have contributed to favorable conditions and laid a solid foundation for realizing the growth target of the country.

The third question is, what measures should be taken? The Central Economic Work Conference has laid out a comprehensive plan for this year's economic work. The next step is to work with other stakeholders to take substantial and meaningful measures to implement those decisions and arrangements of the Party Central Committee. Generally speaking, the overarching goal is to achieve both stability and progress, firmly implement the guidelines on better coordination in six aspects emphasized by General Secretary Xi Jinping at the Central Economic Work Conference, and prioritize stabilizing growth, employment and prices. Specifically, we should focus on the following five priorities. First, we will intensify our macro-policy control and regulation, ensuring that policies are consistent, coordinated, effective, and targeted; increase linkage and coordination between various policies; and conduct evaluations to ensure their consistency with the direction of macro-policies. Last year, under the arrangements of the CPC Central Committee and the State Council, we successfully conducted consistency evaluations and achieved positive outcomes. This year, in accordance with the requirements of the CPC Central Committee and the State Council, we will do a better job in this consistency evaluation based on our experiences to ensure policies form synergies and work together effectively to achieve our targets. Second, we will coordinate our efforts to expand domestic demand with the deepening of supply-side structural reform to fully unleash the potential for consumer spending. We will also promote investment to achieve substantial progress, intensify our work in implementing the innovation-driven development strategy, accelerate the development of a modern industrial system, and meet, lead, and create new demands through higher-quality products and services. By doing so, we aim to promote a virtuous cycle of supply and demand at a higher level. Third, we will work towards building a more advanced socialist market economy system and further enhance our level of openness to continually stimulate development momentum and vitality. Fourth, we will coordinate development and security, prudently handle and resolve risks in areas such as real estate, finance, local government debts, and effectively enhance our security capabilities in fields such as grains, energy resources, and major industrial and supply chains. Fifth, we will implement solid and targeted employment-first policies, strengthen basic public services, and continuously safeguard and enhance people's livelihoods. Meanwhile, we will further enhance economic monitoring, predictions, and early warning, conduct early policy analyses before their implementation, enrich policy tools, prepare for worst-case scenarios, and be better equipped to address complex and difficult situations. We will maintain a firm hold on the initiative in our work and promote overall improvements in economic performance.

That concludes my remarks. Thank you.

Cover News: 

Despite the soaring inflation rates worldwide, China's consumer prices remained generally stable last year. How do you view the situation of China's consumer prices this year? What measures will be taken to stabilize prices?

Li Chunlin:

I'm happy to answer your questions. In 2022, amidst staggering inflation rates not seen in many years and increasing pressure for imported inflation, various localities and relevant departments have taken forceful and effective measures to ensure the supply of major products and stabilize their prices, with a focus on grain and energy. They have resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council and achieved remarkable success. Domestic prices have remained stable, with the monthly CPI consistently kept below 3% and the annual CPI at only 2%. This has demonstrated a stark contrast to the soaring inflation rates seen worldwide.

Due to various factors such as geopolitical conflicts and pressures from imported inflation, domestic prices in China face several uncertainties and instabilities. However, it is important to note that China has achieved a bumper harvest in grain output for 19 consecutive years, with total output exceeding 1.3 trillion jin for many years, which provides a solid foundation for the country to maintain stable prices. Furthermore, we have ample hog production, a sufficient supply of products, stable energy sources, and an improved system to ensure supply and stabilize prices. It is fair to say that China has a solid foundation to stabilize prices, and we are confident in our capacity to meet this year's CPI target.

The Central Economic Work Conference highlighted the importance of stabilizing growth, employment and prices. Looking ahead, we will firmly implement a range of decisions and arrangements aimed at stabilizing prices made by the CPC Central Committee and the State Council, with particular attention to the following four areas: First, we will strengthen monitoring, prediction, and early warning. This requires close monitoring of both domestic and international commodity markets as well as the markets for major products that impact people's livelihoods. It is essential to analyze and predict changes in supply and demand and price fluctuations and implement targeted regulatory measures in a timely manner. Second, we will further strengthen our efforts in guaranteeing supply and stable prices for products affecting people's livelihoods. We will fully implement the national strategy for food security and the system of city mayors assuming responsibility for the "vegetable basket," stabilize the supply of output, improve links between production and sales, regulate food reserves, and ensure a stable market supply of these products. Third, we will take further steps to ensure supply and stable prices for major commodities such as energy. We will stabilize coal production, enhance our reserve capacity, and continuously regulate coal prices to ensure they are within an appropriate range. Furthermore, we will continue to increase exploration and development of China's oil, gas, and mineral resources; expand reserves and output; and strengthen the country's supply capacity. Fourth, we will also strengthen market regulation and guidance over expectations. This will involve coordinated efforts to regulate both spot trading and the future market. We will crack down on illegal activities such as hoarding and price gouging that violate laws and regulations. In addition, we will improve policy interpretation and press releases and promptly address public concerns. Thank you.

Phoenix TV: 

Last year, China's economic growth came in at 3%, while U.S. economic growth reached 2.1%. However, many analyses showed that the increment of the U.S.' GDP was larger than China's, and the gap between China and U.S. in economic aggregate was widening. How do you view these changes? Thank you.

Zhao Chenxin:

Thanks for your question. It's an important question that you have raised. The question also reminds us that many friends may have some questions when looking at the relevant data. I would like to make a few points for your reference regarding your question.

First, I want to stress that China has made remarkable progress in ramping up economic and social development in 2022 despite the impact of multiple unexpected factors. I summed it up in three sentences at the beginning of the conference: the overall performance of China's economy was very impressive, the quality of development has been steadily improved, and the foundation for safe development has been consolidated. Meanwhile, taking multiple economic indicators into overall consideration, the performance of China among the world's major economies was very outstanding. If we look at the longer time span of five or ten years, we can take a comprehensive and in-depth look at last year's achievements. The outstanding comprehensive performance highlights the quality and level of our country's economic development.

Second, when reading and observing economic data, we need to analyze the precise meaning of these data. Last year, China's economic growth came in at 3%, while U.S. economic growth reached 2.1%, and some other major economies grew by around 1.9% or less than 1%. This data was calculated using constant prices, which can reflect the growth of an economy relatively objectively and accurately. However, regarding the comparison of total GDP between China and the U.S., all countries use nominal GDP calculated at the current price of their own currencies when calculating the total GDP, which are prone to be heavily impacted by commodity prices. Last year, the U.S. experienced elevated inflation, with CPI and PPI recording a year-on-year increase of 8% and 16.5%, respectively. However, China's commodities price remained stable last year as CPI and PPI increased by 2% and 4.1% year-on-year, respectively. The high inflation in the U.S. has largely raised the country's nominal GDP. Whether Americas can feel a sense of gain under the high inflation, I assume that the residents of the country have the most experience. The comparison between China-U.S. GDP aggregate should be calculated after adjusting China's GDP from yuan to U.S. dollars, in which the exchange rate plays a significant role in impacting the final numbers. To curb high domestic inflation, the Federal Reserve resorted to seven interest hikes by 425 basis points, raising the federal funds rate to the highest level since 2007, which also caused a passive depreciation of many other currencies. The increase in U.S. dollar interest rates has caused depreciation of other currencies against the U.S. dollar, and the renminbi exchange rate has also been affected to some extent. When considering the gross GDP scale, there has also been a certain degree of reduction. I provide this information for your reference so that you can analyze the precise meaning of economic data when you read and observe it.

Third, China pursues a people-centered approach to development, and the purpose of China's development is to benefit the people. We have always been committed to running our own affairs well, constantly improving and surpassing ourselves to build a better China. We have always been committed to delivering better lives for our people through development and making more and more contributions to world peace and development through China's development. As the world's largest developing country, with a population of more than 1.4 billion, the fact that China has focused on completing its own tasks is a major contribution to human development. We have upheld a mutually beneficial and win-win opening strategy, actively participated in economic globalization, and strived for the common development of all countries. We are willing to make new contributions to world economic development with the new achievements of China's development. We also reach out our arms and welcome other countries aboard the express train of China's development.

Fourth, China's economy is currently operating well on the whole. Many international institutions have recently raised their expectations for China's economic growth. This year is a very important year and the first year to fully implement the guiding principles of the 20th CPC National Congress. Accomplishing the work for economic and social development this year is of major significance. All of us throughout the country have a high degree of agreement on this issue. All regions and all government departments have taken solid, practical, and effective measures. We are confident in achieving this year's targets and advancing the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. Thank you.

Lianhe Zaobao:

The contribution of consumption to China's economy shrank significantly last year. China's top leaders emphasize giving top priority to restoring and expanding consumption. How do you assess the current consumption situation in China? What measures will the Chinese government take to boost consumption? Thank you.

Li Chunlin: 

I am glad to answer your questions. You've raised three questions. How to evaluate the current consumption situation in China? What are the unfavorable factors restricting consumption? And what measures will be taken to boost consumption?

Final consumption is the enduring driving force for economic growth. Overall, China's consumer market has shown a trend of rapid recovery. With increasingly frequent regional population flows, there has been a significant increase in cross-provincial travel and tourism. Catering, culture, entertainment and other industries have picked up rapidly. And with the impact of traditional Chinese holidays, including the Spring Festival and the Lantern Festival, China's consumption got off to a good start at the beginning of the year. I'll share the statistics. During the Spring Festival, domestic tourism revenue reached 375.8 billion yuan, up 30% year on year, and 308 million domestic tourist visits were made, up 23.1% from last year. These two numbers are equal to 73% and 89% of the same period in 2019, respectively. Sales revenue of China's consumption-related sectors rose by 12.2%, and online retail sales of physical goods increased by 14.5%. So, judging from the numbers seen during the Spring Festival, the recovery of consumption has accelerated since the beginning of the year. As uncertainties restricting the release of consumption are gradually eliminated and consumption potential is unleashed rapidly, the growth rate of major indicators in the consumption sector is expected to increase gradually in the first half of this year. Looking ahead to the whole year, consumption can also become the main driving force of economic growth and play a more fundamental role. This is a prediction for the consumption situation of this year.

The Central Economic Work Conference emphasized that the recovery and expansion of consumption should be given top priority. As Mr. Zhao Chenxin mentioned, last year's Central Economic Work Conference stated that stability should be taken as the priority, and progress should be made while stability is ensured. Moreover, growth, employment and prices should also be stabilized. Consumption has played a fundamental role and made a key impact on stabilizing growth.

In the next step, we will fully implement the guiding principles of the 20th CPC National Congress and the Central Economic Work Conference, and promote the sustained recovery and expansion of consumption. Our work will focus on the following four aspects.

First, we will take multiple measures to promote the steady growth of consumption. We will issue policies for the recovery and expansion of consumption. We will introduce practical and effective policies and measures to stabilize bulk consumption, increase services consumption, expand rural consumption, and create a safe consumption environment to release residents' consumption potential.

Second, we will enhance the consumption capacity of residents. Consumption capacity is based on employment and income. We must come up with an innovative mechanism to promote a full-chain, virtuous cycle of employment, income distribution, and consumption. We will increase the income of urban and rural residents through multiple channels, and work to ensure the supply of basic consumer goods and keep their prices stable, so that residents can consume with stable incomes and have the confidence to spend.

Third, we will improve the consumption environment. We will develop the consumption promotion system and mechanisms, formulate polices to create a safe consumption environment, improve the quality management system, and optimize the diversified settlement mechanism for consumption disputes and the mediation mechanism for online consumer disputes. We will continue to optimize the consumption environment so that people will have a stronger sense of gain and are more willing to consume.

Fourth, we will foster new areas for consumption growth. We will vigorously advocate green consumption and new types of consumption. We will support consumption in key areas such as housing improvement, new energy vehicles, elderly care services, education, medical care, culture, health and sports. We will encourage the development of new forms, models and scenarios of consumption to further stimulate the vitality of the consumer market.

Over the coming year, we will adopt various policy tools to deal with the unfavorable factors restricting consumption. We have the confidence and capability to implement measures to boost consumption so that consumption will contribute more to the annual GDP growth of around 5% this year. Thank you.

Bloomberg: 

Investment last year was a key driver of economic growth, but local government finances are seeing increasing stress because of the cost of COVID zero and the housing slump. What's your estimate for infrastructure investment this year? And based on the information we have, are there enough quality projects qualified to use that 3.8 trillion yuan quota for local special government bonds? Thank you.

Yang Yinkai:

Thank you for your questions. Last year, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, the NDRC worked together with relevant parties to actively expand effective investment. In 2022, China's fixed-asset investment increased by 5.1% year on year. Infrastructure and manufacturing investment grew by 9.4% and 9.1%, respectively, playing an important role in stabilizing the overall macroeconomic market.

This year, we will fully implement the guiding principles of the 20th CPC National Congress and the Central Economic Work Conference. We will continue to expand effective investment and make solid progress on major projects. We will effectively drive investment of the whole society through government investment and policy incentives. We will consolidate the sound momentum of steady growth in infrastructure investment and manufacturing investment and enhance the key role of investment in improving the supply structure. We will focus on the following four aspects.

First, we will focus on weak links and accelerate construction in key areas. We will implement the 102 major projects listed in the country's 14th Five-Year Plan (2021-25) in an orderly manner. We will strengthen food security, energy security, and the security of industrial and supply chains. We will accelerate the construction of major infrastructure in transportation, water conservation, energy and other fields. We will also strengthen investment in manufacturing and high-tech industries and develop a systematic layout for new infrastructure. Moreover, we will accelerate the renovation of aging urban gas pipelines, address urban waterlogging, and promote social programs regarding people's livelihoods.

Second, we will give full play to the role of a package of investment policies and advance the development of major projects in a coordinated way. We will adhere to the requirement that projects follow their planning and that investment funds and other production factors stay with the projects they are allocated to. We will fully use our experience and actions in promoting the coordination mechanism for key projects of effective investment and continue to improve and expand the long-term working mechanism for effective investment. According to the report from the State Council on the execution of the central and local budgets for 2022 and on the draft central and local budgets for 2023, as well as the draft central and local budgets for 2023 submitted to the first session of the 14th National People's Congress for deliberation yesterday, investment from the central government budget will reach 680 billion yuan this year. Next, we will further improve the investment mix and pool all resources to accomplish major tasks and deal with difficulties and emergencies at the national level. We will organize relevant authorities to prepare for special-purpose bond projects for local governments, urging local governments to accelerate the issuance and use of special-purpose bonds, and kick-start and advance the projects. We will continue to accelerate the creation of policy-based and developmental financial instrument projects, which began last year, and make efforts to do much more work.

Third, we will build up the number of investment projects in reserve and continue to raise the quality of preliminary work for investment projects. We will guide local governments to keep building up a reserve of major projects securing both short-term and long-term benefits to lay the foundation for expanding effective investment. We will urge local authorities to launch in-depth preliminary research and demonstration for projects, effectively improving the quality and efficiency of preliminary work for projects. We will coordinate with relevant authorities to strengthen the support of land use, environmental protection assessments, and other factors of production.

Fourth, we will further stimulate private investment and continue to improve the investment environment. We will establish and enhance the mechanism of private investors' participation in the development of major projects. We will fully use the mechanism for facilitating cooperation on investment and financing of nongovernmental capital to encourage more private capital to get involved in developing major national projects to strengthen areas of weakness. We will promote advanced experience and earnestly implement the policy documents supporting the development of private investment. We will guide private capital to use idle assets in various ways and promote high-quality private investment projects to issue infrastructure REITs.

Concerning your question about special-purpose bonds for local governments, special-purpose bonds have now become important sources of funding for construction projects of local governments. According to the arrangement and requirements of the State Council, next, we will take practical measures to fulfill the duties of establishing criteria for investment and screening projects. We will guide local authorities to continue to plan for and build up a reserve of special-purpose bond projects. Rolling groups of projects will be applied and launched one after another. We will tighten the review of projects and urge local authorities to follow the principle that investment funds and other production factors stay with the projects they are allocated to and choose projects from a list of projects in reserve we have screened and established for bond issuance. I would like to emphasize that all projects included in the list of projects in reserve are infrastructure and public service projects that conform to planning, are led by governments, will be launched sooner or later, and have certain benefits. Meanwhile, in addition to the bond issuance in the areas of transport, energy, agriculture, forestry and water conservancy, social programs, utilities and industrial parks, and new types of infrastructure, we will follow the decisions and arrangements of the Party Central Committee and the State Council and work with relevant authorities to actively explore and further expand the areas for the issuance of special-purpose bonds. Thank you.

Xinhua News Agency:

This has been the third year since the implementation of the outline of the 14th Five-Year Plan. During the process of implementing the previous five-year plans, the mid-term assessment was conducted. Can you provide an update about the progress of the mid-term assessment this year? Thank you.

Yang Yinkai:

Thanks for the attention of all sectors of society to the mid-term assessment of the implementation of the 14th Five-Year Plan. This year is crucial to continuing to implement the 14th Five-Year Plan. The mid-term assessment is of great significance for promoting the smooth implementation of the 14th Five-Year Plan. According to the Law on Supervision by the Standing Committees of the People's Congresses at All Levels and arrangements of the CPC Central Committee and the State Council, we are working with relevant departments to carry out the mid-term assessment of the 14th Five-Year Plan. We will comprehensively review the progress in implementing the 14th Five-Year Plan, thoroughly analyze the difficulties and challenges, and put forward upcoming targeted policies and measures to further implement the 14th Five-Year Plan.

In terms of the scope of assessment, the mid-term assessment mainly includes three aspects, i.e., the implementation of the outline of the national 14th Five-Year Plan, the implementation of special plans at the national level, and the implementation of local 14th five-year plans. Concerning the implementation of the outline of the national 14th Five-Year Plan, the mid-term assessment is led and placed under the responsibility of the National Development and Reform Commission and supported by other relevant departments performing their respective functions. Departments that have formulated the plans are responsible for the mid-term assessment of the implementation of the special plans at the national level. Concerning the implementation of local 14th five-year plans, the mid-term assessment is led and placed under the responsibility of the local development and reform commissions.

Regarding the key assessment areas, the mid-term assessment focuses on the macro, meso and micro levels. It comprehensively reviews major objectives and indicators, the promoting of high-quality development, major strategic tasks, major projects and changes in the conditions facing development. At the same time, we will step up innovation in the subjects, methods, processes and assessment criteria. We will take practical measures to ensure that the assessment combines self-assessment with third-party assessment and comprehensive assessment with thematic assessment. It adopts objective- and problem-oriented approaches, assesses both process and effect, and combines standard assessment with customized assessment and objective assessment with subjective experience.

Previously, we officially released a notice asking relevant departments of central and state organs and local development and reform commissions to conduct self-assessments simultaneously. At the same time, we will entrust relevant institutions to carry out a series of thematic research and third-party assessments based on actual circumstances. At present, all our work is progressing in an orderly manner.

Next, we will conduct in-depth research and studies, solicit opinions from all parties, and make a comprehensive, accurate and objective assessment of the progress of implementing the 14th Five-Year Plan. We will make every effort to promote the implementation of major objectives and tasks in an orderly manner to get off to a good start in advancing Chinese modernization. Thank you.

CRNTT:

Due to significant fluctuations in the global food market in recent years, food security has become an issue of common concern to all parties. How do you perceive China's food security at present and in the following period, and how to ensure food security in a large country with a population of over 1.4 billion? Thank you. 

Zhao Chenxin:

Thank you for your question. It's quite an important one. Just now, Mr. Li mentioned food security when taking other questions. Now, I will give you a detailed introduction. 

Food security concerns the country's most fundamental interests. General Secretary Xi Jinping has reiterated that we must always have control over our own food supply and fill the rice bowl of Chinese people mainly with Chinese grain. In recent years, uncertain and unpredictable factors have been intertwined worldwide, and the global food market has encountered frequent and substantial fluctuations. We have earnestly implemented the decisions and plans of the CPC Central Committee and the State Council with relevant parties and ensured stable domestic grain production and supply in response to the uncertainty of the external environment. The domestic food market has maintained a sound momentum of ample supply and stable operation. Last year, in the face of unexpected factors such as a prolonged COVID-19 pandemic and extreme weather, with joint efforts from all parties, China saw a bumper grain harvest with a record-high output of 686.55 million metric tons. It was the eighth consecutive year that the grain output exceeded 650 million metric tons. We also achieved notable results in expanding the plantation of soybean and oil crops, carried out grain purchases in a steady and orderly manner, and significantly improved our logistics and emergence response capabilities. In general, China has a solid foundation in ensuring grain supply and stabilizing prices as bumper grain harvest continued for many straight years. With the constant improvement of market regulation, a secure and reliable logistics system, a relatively high level of stock, and an enhanced ability to respond to severe natural disasters and public emergencies, China has delivered a good job in ensuring food security. Our food supply can meet people's daily consumption needs and the need to develop relevant industries. 

As China has a population of over 1.4 billion, ensuring food supply always remains a top priority in the governance of the country. We must never relax our efforts to ensure national food security. Following Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will implement the food crop production strategy based on farmland management and technological application, and uphold the national strategy on food security featuring self-sufficiency based on domestic grain production, guaranteed food production capacity, moderate imports, and technological support. We will take comprehensive measures concerning all links of grain production, purchase, storage, processing, and sales, and coordinate to enhance our abilities to produce, transport, and store grain so as to consolidate the all-rounded foundation of food security. On the one hand, we will make every effort to increase grain production. We will see that the Party and the government will be equally responsible for food security and arable land protection, and improve policies to support major grain-producing areas, major areas of grain sales, and balanced areas of grain production and sales, in a bid to ensure stable grain acreage. We will launch a new round of actions to increase China's grain production capacity by 50 million metric tons and continue to advance projects to improve soybean and oil production capacity. We will invigorate the seed industry and accelerate breakthroughs in key and core agricultural technologies. On the other hand, we will make every effort to safeguard market supply. We will continue to improve our ability to regulate grain harvest and storage, enhance the balance of grain production and consumption as well as market regulation, and deliver a good job in grain purchases. We will enhance the construction of grain storage and logistics facilities and make good arrangements for the sale of excess grain stockpiles. Continued efforts will be made to optimize a national grain emergency response system. In a word, we have the foundation, conditions, abilities, and confidence to safeguard a secure food supply for Chinese people. We will speed up building a national food security system that is higher-level, higher-quality, more efficient, and more sustainable, providing strong support for the stable and sound development of the economy and society. Thank you. 

CNBC: 

I have two questions. First, what are this year's new plans for attracting foreign investment, and in which sectors specifically? Second, the unemployment rate of young people and college graduates was relatively high during the pandemic. What are this year's employment trends, and what policies are going to be released to support employment? Thank you. 

Zhao Chenxin:

Let us invite Mr. Li to answer the question about employment and Mr. Yang about the utilization of foreign investment. 

Yang Yinkai:

I will answer your question about the utilization of foreign investment. In 2022, China achieved fruitful results in attracting foreign investment. Overall, we saw the quality of foreign investment in China improving amid a steady growth, and three new changes emerged in this regard. First, the quality of foreign investment in China continued to improve, with the actual use of foreign capital in manufacturing and high-tech industries up by 46.1% and 28.3%, respectively. Second, sources of foreign investment were more diversified. Investment from the EU and countries along the Belt and Road increased by 92.2% and 17.2%, respectively. Third, the regional distribution of foreign investment tended to be more balanced. The actual use of foreign investment in China's central and western regions grew by 21.9% and 14.1%, respectively. In January 2023, foreign direct investment into the Chinese mainland, in actual use, expanded 14.5% year on year to 127.69 billion yuan, getting off to a good start. The increasing foreign investment in China and its optimized structure have fully demonstrated the confidence of global investors in the country's development. 

This year, in terms of attracting foreign investment, we will further implement the decisions and plans of the CPC Central Committee and the State Council and expand institutional opening up regarding rules, regulations, governance, and standards in a steady manner. We will strive to foster a market-oriented and law-based world-class business environment to support global investors to invest in China and promote the high-quality development of our work to attract more foreign investment. We will focus on the following three aspects. 

First, we will implement the plans listed in the Outline of the 14th Five-year Plan (2021-25) and advance opening up in telecommunication, internet, education, culture, medical care, and other sectors in an orderly manner. We will further ease restrictions apart from the foreign investment negative list to ensure that foreign-invested enterprises enjoy all policies on an equal basis. 

Second, we will ensure the implementation of all policies that have been issued. We will fully implement several policies and measures focusing on the manufacturing industry to promote the expansion of foreign investment, stabilize the stock and improve investment quality. This includes the new version of the Catalogue of Industries for Encouraging Foreign Investment, guiding more foreign investment toward sectors such as advanced manufacturing, modern services, high and new technology, energy conservation and environmental protection, and toward the central, western and northeastern regions.

Third, we will enhance foreign investment promotion and services, leveraging major foreign investment projects in China to set better examples, and promoting the improvement of local mechanisms. We will work in unison between the higher and lower levels of government, and provide full-process services. We will organize and conduct a series of international industrial investment cooperation activities to create a platform for multinational companies and local investment attraction.

I would also like to emphasize that China has always been proactive in implementing high-level opening-up policies. We will encourage foreign investors to invest in the Chinese market with a more open and inclusive attitude. Global investors are welcome to invest and do business in China. They can play a greater role in building a new dual circulation development paradigm, with the domestic economy and international engagement reinforcing each other and achieving more significant progress.

Li Chunlin:

I will answer the employment question. Employment is pivotal and fundamental to people's livelihoods. The Party Central Committee and the State Council attach great importance to stabilizing employment, further implementing the employment-first policy, promoting the gradual stabilization and recovery of the employment situation, and maintaining overall stability. The report at the conference yesterday also mentioned that our goal this year is to create around 12 million new jobs, a net increase of 1 million compared to last year. We are fully confident that we will achieve this goal.

Judging from the situation this year, the external environment has become increasingly volatile and grave. The number of domestic college graduates and urban employment demand has reached new highs, and there are still some pressure and challenges to expand employment opportunities and improve employment quality. However, we should also acknowledge that the continuous efforts and effectiveness of various policies and measures aimed at ensuring stable growth, employment, and prices have taken effect. Businesses, including enterprises, continue to recover and grow, leading to an expansion of labor demand and an increase in employment opportunities, resulting in an increase in jobs and a stable and positive employment situation. Last year we set a goal of creating 11 million new jobs, but we actually achieved 12.06 million, exceeding the planned target by 1 million. This year's goal is to create about 12 million new jobs, which is 1 million more than last year's targe, fully reflecting our confidence and determination to stabilize employment.

The second question you raised about employment is regarding what kind of policies will be introduced to stabilize and maintain it. The Central Economic Work Conference clearly stated that promoting the employment of young people, especially college graduates, should be a top priority. The NDRC will firmly follow the decisions and arrangements of the Party Central Committee and the State Council, intensify our support for employment-oriented macro-regulation policies, and take well-coordinated steps toward the promotion of "job expansion, job stabilization, services, and entrepreneurship" to facilitate high-quality and full employment of young people, including college graduates. We will focus on four key aspects.

First, we will focus on expanding the market-oriented employment of college graduates. We will proactively expand effective investment, accelerate the recovery in consumption of consumer services, and expand market-oriented employment space by increasing domestic effective demand. We will encourage the manufacturing industry's high-end, intelligent, and green development, promote the deep integration of modern services with advanced manufacturing and modern agriculture, and create more knowledge-based and technical jobs. We will provide stable employment for college graduates and young people with specific technical expertise.

Second, we will focus on accelerating the efforts to ease the difficulties faced by enterprises and self-employed individuals. We will promptly adjust, optimize and effectively implement policies that alleviate burdens and difficulties, continue to reduce costs, strengthen the security of energy resources and important industrial and supply chains, promote the integration and sharing of credit information related to enterprises, enhance the financial service capabilities for MSMEs, promote the recovery and development of business entities, and improve employment absorption capacity.

Third, we will focus on strengthening employment services for young people. We will increase efforts and improve mechanisms to provide precise, efficient, and continuous employment services for college graduates, as well as provide comprehensive support for young people facing employment difficulties. We will deepen industry-education integration and school-enterprise cooperation for vocational education, promote the joint-construction and sharing of vocational skills training resources, enhance the skills of young people, including college graduates, and closely align what students have learned with market needs.

Fourth, we will focus on unleashing the vitality of youth innovation and entrepreneurship. We will give full play to the leading and serving role of the demonstration bases for innovation and business startups and promote the opening and sharing of entrepreneurial resources. We will strengthen the construction of entrepreneurial parks for people returning or moving to the countryside and guide college students interested in and capable of starting a business to return to their rural hometowns or settle in rural areas to start their own businesses. We will make a big push to develop the digital economy, enhance regular supervision, support platform enterprises to play a greater role in driving development and creating jobs, and encourage young people to rely on platforms to start their own businesses and find flexible employment opportunities. Thank you all.

The Paper:

The international energy supply and demand situation has been challenging since last year, which has exerted huge pressure to China's energy provisions. How do you view the current and future energy security situation in China? What are the NDRC's plans to ensure a stable and sufficient supply of energy ? Thanks.

Li Chunlin:

Like food safety, energy security is also a crucial part in China's national security. It is typically a "matter of national significance." In recent years, despite the complex global energy supply situation and rising prices, we have made solid progress in developing the energy production, supply, storage, and marketing systems. We have continuously enhanced our energy supply capacity, diversified our energy imports, improved reserve capacities, gradually optimized market systems, and achieved remarkable results in green and low-carbon transformation. In recent years, China's energy self-sufficiency rate has remained above 80%. In 2022, domestic crude oil production rebounded to over 200 million tons, reaching 205 million tons; natural gas output reached 220.1 billion cubic meters, increasing by more than 10 billion cubic meters for six consecutive years; by the end of 2022, the national installed power capacity registered 2.56 billion kW, among which the installed capacity of renewable energy exceeded 1.2 billion kW; and the newly installed capacity of wind power and photovoltaic exceeded 100 million kW for three consecutive years. In general, China's energy security is guaranteed.

In 2023, the international energy supply and demand situation remains complicated, with many uncertain factors, and domestic economic recovery and development drive steady growth in energy demand, while problems still exist regarding energy supply and demand between regions and periods. In order to keep the energy supply and prices stable, we will continue to reinforce systems for energy production, supply, storage, and marketing on the basis of our previous efforts and take comprehensive measures to ensure safe and stable energy supply. We will mainly focus on the following four aspects:

First, we will increase energy production and supply. We will continue to improve power supply capacity by vigorously promoting the construction of large-scale wind and photovoltaic power stations mainly in desert and barren areas, particularly in the Gobi desert. We will also develop necessary peak-shaving power sources and coordinate to increase effective power generation. We will increase investment in domestic oil and gas exploration and development to boost oil and gas reserves and production. We will stabilize coal production and supply while strengthening its clean and efficient utilization. We will also ensure the diversified and stable energy imports.

Second, we will constantly consolidate energy reserves. We will establish and improve a sound energy reserve system, bolster coal reserve capacities, and create a stable and efficient oil and gas reserve system so as to continuously enhance our capacity for backup power supplies for national emergencies and peak-shaving power sources.

Third, we will maintain stable energy prices. We will pay close attention to changes in supply and demand and the prices of the energy market and take coal as an "anchor" to ensure the supply and price stability of energy. We will take a combination of measures to regulate and supervise coal price and stabilize electricity prices by keeping coal prices stable. In this way, we will be able to maintain stable energy prices across the country.

Fourth, we will safeguard the bottom line of people's energy use. We will expand the coverage of medium and long-term contracts involving coal supply for power generation, heating, and household gas supplies. We will improve the complementarity of energy sources, including coal, natural gas, electricity, and refined oil, and enhance our capabilities to ensure peak-hour energy supplies. We will also make more efforts to strengthen the monitoring and early warning of power supply and demand. Furthermore, we will refine demand-side combined load management plans and firmly uphold the bottom line of energy use for people's livelihoods. Thanks.

Shou Xiaoli:

Thank you to the three speakers from the NDRC, and thank you to all my friends in the media. Today's press conference concludes here. Goodbye.

Translated and edited by Wang Yiming, Wang Qian, Zhou Jing, He Shan, Guo Yiming, Zhang Rui, Dong Qingpei, Yang Xi, Yan Xiaoqing, Wang Wei, Xu Kailin, Zhou Jing, Liu Jianing, Yan Bin, Zhang Tingting, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Yi Gang, governor of the People's Bank of China (PBC)

Mr. Pan Gongsheng, deputy governor of the PBC and head of the State Administration of Foreign Exchange (SAFE)

Mr. Liu Guoqiang, deputy governor of the PBC

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 3, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to the press conference held by the State Council Information Office (SCIO). This is the ninth press conference in the series “Embarking on the New Journey — A Government Prospective.” We have invited Mr. Yi Gang, governor of the PBC, to brief you on forging ahead with confidence, upholding fundamental principles, breaking new ground and supporting the high-quality development of the real economy, and to take your questions. Also present at today's press conference are Mr. Pan Gongsheng, deputy governor of the PBC and head of the SAFE, and Mr. Liu Guoqiang, deputy governor of the PBC.

Now, let's give the floor to Mr. Yi for his introduction. 

Yi Gang:

Friends from the media, ladies and gentlemen, good morning. I am very glad to attend today's press conference. Over the years, you have paid much attention and given much support to the financing sector and the PBC's work. Here, on behalf of the PBC, I would like to express my sincere gratitude to all friends from the media and media outlets.

This year marks the first year in the implementation of the guiding principles of the 20th National Congress of the Communist Party of China (CPC). The PBC will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the decisions and arrangements of the CPC Central Committee, and provide strong financial support to achieve stable and sound economic growth. Now, I will brief you on the relevant ideas, policies and measures of our work. 

First, we will implement a prudent monetary policy in a targeted and effective manner to foster a favorable monetary and financial environment for high-quality economic development. The top priority is to stabilize the value of the renminbi (RMB). The stable value of the RMB has two implications, the first of which is stable prices. In recent years, we have persevered with a prudent and normal monetary policy, providing a solid foundation for stabilizing prices. As you know, the world experienced serious inflation last year. Many countries including the United States and some European countries registered inflation rates of 8%, 9% and even 10%, hitting a record high in the past four decades. China's consumer price index (CPI) rose by 2%, indicating an ideal inflation level. Over the past five years from 2018 to 2022, and even over the past 10 years from 2013 to 2022, China's inflation rate has averaged 2%. Over the past decade, China's CPI has reached as high as 2.9% and as low as 0.9%, with an average of 2%, which has not come easily. The second implication of stable value of the RMB is basically stable exchange rates. Over the past five years, the RMB breached the 7 per U.S. dollar level three times and fell back to below 7 per dollar. The RMB exchange rate has fluctuated in both directions with more flexibility. Compared with other currencies around the globe, the RMB is very stable and robust, and such flexible market-based exchange rate system has also helped regulate the macroeconomy and actively stabilized the international balance of payments. 

Next, we will comprehensively leverage multiple monetary policy tools, maintain reasonably ample liquidity, and see that increases in broad money supply (M2) and aggregate financing are generally in line with nominal economic growth. We will keep the RMB exchange rate generally stable at an appropriate, balanced level. 

Second, we will improve the ability, quality and efficiency of financial services for the real economy, and better support key areas and weak links. We have introduced moderate monetary policies. Some people call them structural monetary policies, but they are also moderate. Currently, the outstanding value of these structural monetary policies stands at 6.4 trillion yuan, accounting for around 15% of the PBC's balance sheets — a generally moderate proportion and level. The structural monetary policies support two key areas: one is micro- and small-sized enterprises and the private economy, and the other is green financing. In 2022, the outstanding balance of inclusive loans to micro- and small-sized businesses reached nearly 24 trillion yuan and more than 56 million micro- and small-sized businesses received inclusive loans. In terms of green financing, we have two supporting tools, which led to carbon emission reductions equivalent to 100 million metric tons of carbon dioxide last year.

In the next stage, we will intensify support for sci-tech innovation, manufacturing, green development and energy supply. Inclusive financial services will be further improved in fields such as micro- and small-sized businesses, rural revitalization and employment.

Third, we have strengthened the system to ensure financial stability, safeguarding the bottom line of preventing systemic risks. We all know that in recent years, China has made great efforts to ensure that financial risks have been contained. Currently, China's four major banks have become global systemically important banks and the top four banks in the world in terms of capital strength. Meanwhile, the operation of most banks in China, including share-holding banks and small and medium banks, is also stable. Important progress has been made in advancing reform and defusing risks for a few small and medium financial institutions with difficulties.

In the next step, we will move to ensure responsibilities for the prevention and disposal of financial risks are fulfilled by all parties concerned. The National People's Congress has completed the first review of the law on financial stability. We will push for enacting the law, placing all types of financial activities under regulation according to laws and protecting the interests of the overwhelming majority of people, small- and medium-sized investors and the insured. Moreover, we will strive to achieve the intended goals of rectifying the financial services of internet platform enterprises, stepping up regular oversight, and supporting platform enterprises' standardized and healthy development.

Fourth, we have deepened the reform of the financial system and orderly advanced higher-level opening-up in the financial sector. All have witnessed our achievements in this regard in recent years. In the next stage, we will continue to foster a market- and law-based, internationalized and world-class business environment. We will steadily promote institutional opening-up that covers rules, regulations, management and standards in the financial sector. We will also uphold multilateralism and actively participate in global financial cooperation and governance.

Next, my colleagues and I would like to answer your questions. Thank you.

Chen Wenjun:

Thank you, Mr. Yi. Now you are welcome to ask questions. Please identify the media outlet you represent before raising your questions.

CCTV:

My question is for Mr. Yi. Special plans and arrangements have been made in the report to the 20th CPC National Congress and at the Central Economic Work Conference to prevent and defuse major economic and financial risks. My question is, up to now, what progress has been made in preventing and defusing financial risks? What are the considerations for the work in the next stage? Thank you.

Yi Gang:

In recent years, under the strong leadership of the CPC Central Committee and the State Council, we have taken many effective measures to fend off and defuse financial risks, safeguarding the bottom line of preventing systemic risks. Financial risks have been contained overall. In dealing with financial risks, we have acted in accordance with market- and law-oriented policies to uphold the stable and sound operation of the financial market and infrastructure. We have ensured overall economic and social stability and effectively protected the interests of all our people. Also, we have adopted market- and law-oriented policies to guard against moral hazards and tighten market discipline. By doing so, he that does good shall find good; he that does evil shall find evil. All stakeholders can see the rules and thus have correct expectations. I would like to speak more about the following aspects: 

First, we have properly defused the risks of key institutions. We decisively took over Baoshang Bank, resolutely broke down rigid payments, and protected the interests of the general public in accordance with related laws. The bankruptcy of Baoshang Bank was the first case of its kind in China since reform and opening-up began. Meanwhile, we steadily defused risks for small and medium financial institutions, including Hengfeng Bank, the Bank of Jinzhou, and other city commercial banks in Liaoning province. Over the past three years, we supported local governments in issuing 550 billion yuan of special bonds to replenish the capital of small and medium banks. The number of high-risk small and medium financial institutions declined by half, from more than 600 to more than 300. There are no high-risk financial institutions in many provinces. Meanwhile, through targeted efforts, we have resolved the risks of high-risk financial groups, including Tomorrow Holdings Group and its units, Anbang Group and its units, China CEFC Energy Company Limited and its units, and HNA Group, avoiding the risk of their sudden collapse and preventing the spread of risks.

Second, we have made significant efforts to address acute problems in the financial sector. We have comprehensively implemented the new rules for asset management. The scale of high-risk shadow banking business, also called "quasi-credit," has shrunk by about 30 trillion yuan. We have promoted a campaign to address risks related to internet finance. Nearly 5,000 P2P online lending institutions have been closed. We have promoted the rectification of financial services of big internet platform enterprises in an orderly manner, placed all types of financial activities under regulation according to laws, regulated private equity, and stepped up efforts to reduce risks of both legal and illegal financial assets exchange. During the past five years, about 25,000 illegal fundraising cases have been investigated and dealt with.

Third, we have improved institutions and mechanisms for preventing and controlling financial risks. According to the decisions of the central government, we have advanced the establishment of financial risk disposal mechanisms led by major local leaders of the Party and the government. All provinces have set up financial risks disposal committees led by provincial leaders to see the responsibilities of financial institutions and their shareholders, supervisory departments, as well as local Party committees and governments. This creates a positive incentive for defusing financial risks. At present, all depository financial institutions nationwide have joined the deposit insurance scheme, which can provide full deposit guarantees for more than 99% of depositors. 

In general, China's financial performance is characterized by prudent, with financial risks shrinking and general risks under control. The banking industry account for more than 90% of China's financial sector, so it is prudent. China's foreign exchange reserves have ranked first in the world for many years. Last year, after continued efforts in the past decade and beyond, the PBC completed writing off the costs of financial reforms for state-owned commercial banks and rural credit cooperatives. This accomplishment further solidified the financial foundation of the modern central bank system and helped ensure currency stability in the financial sector. 

Moving forward, the PBC will collaborate with other financial management departments to enhance and modernize financial supervision, strengthen the system for ensuring financial stability, and tackle financial risks in major sectors. We will maintain high pressure on illegal financial activities and see the responsibilities of all parties to tackle risks fulfilled. In doing so, we can forestall systemic financial risks. Thank you. 

Tide News: 

As China continues to focus on economic growth in 2023, what monetary policies can we expect the PBC to implement in support of high-quality economic development? Thank you. 

Yi Gang:

This is a question everyone is concerned about. Monetary policies matter in support of high-quality economic development. The Central Economic Work Conference proposed the adoption of prudent monetary policies. Looking back on what we did over the past few years, we can gain a clear understanding of the key points in taking our future measures. There are several features in how momentary policies have supported high-quality economic development in recent years. 

First, our monetary policies have effectively supported the real economy in terms of economic aggregate, which is very important. The monetary policy, as part of macro policy, must adequately support the economic aggregate. Since 2018, we have reduced required reserve ratios 14 times and injected more than 11 trillion yuan to maintain long-term, reasonable, and ample liquidity. We maintained a reasonable increase in total credit, which played a crucial role in stabilizing employment and meeting basic living needs. We have created a favorable monetary and credit environment specifically for the maintenance of operations of micro and small-sized enterprises and market entities. The core of our policy lies in keeping price levels stable, which requires us to ensure that the M2 money supply and aggregate financing should generally increase in step with the nominal growth of GDP. This enables us to maintain a suitable aggregate monetary supply to keep price levels stable in China. 

Second, in terms of interest rate policies, mainly considering the domestic economy, we have kept a reasonable level of real interest rates to moderately lower financing costs. Let us review what we have achieved in the past several years. In 2018, when central banks worldwide raised interest rates, we kept a stable interest rate. In 2020, facing the impact of the COVID-19 pandemic, major central banks around the world lowered interest rates substantially. The PBC cut interest rates by 20 to 30 basis points while keeping them stable. Particularly in 2022, due to high inflation worldwide, major central banks significantly raised interest rates. In comparison, the PBC didn't raise interest rates but rather reduced them twice by 20 to 50 basic points. Meanwhile, loan prime rates by financial institutions were also reduced twice. Therefore, our financing costs last year were reduced, which greatly supported the real economy. Last year, the average interest rate of new loans for enterprises was 4.17%, 1.28 percentage points less than in 2018. The interest rate of inclusive loans to small and micro businesses was reduced from 6.3% in January 2018 to 4.9% in December 2022, both at historically low levels. We also supported micro and small-sized enterprises to lower their financing costs. 

Third, regarding the financial structure, we have shored up support for major sectors and weak links. We have upheld the principle proposed by the central government to work unswervingly both to consolidate and develop the public sector and to encourage, support, and guide the growth of the non-public sector. Our support has been extended to private enterprises and micro- and small-sized enterprises. In response to the difficult times caused by the COVID-19 pandemic, we have rolled out policies to assist micro and small-sized businesses by deferring principal and interest repayments on loans and providing collateral-free loans. These measures have been instrumental in ensuring the operation of market entities as well as employment. We have introduced a series of structural monetary policies that focused on the high-quality development of green finance, scientific and technological innovation, and infrastructure construction, as well as ensured the delivery of pre-sold housing projects. This year, we will further intensify efforts in these four aspects. 

Going forward, on the one hand, the total amount of money and credit should be moderate, and the pace should be stable to consolidate the results of the decline in real loan interest rates. On the other hand, the role of structural monetary policy should also be played moderately, and strong support should continue to be given to inclusive finance lending to micro and small businesses, green finance, scientific and technological innovation, and other areas.

The above is my brief answer to the focus of monetary policy to support high-quality development. Thank you.

Reuters:

In the case of continued interest rate hikes by the Federal Reserve, will the space for the Central Bank to continue to cut interest rates this year be further squeezed? In this situation, will we increase the use of structural monetary policy tools? Is the Central Bank concerned about the rise in inflation against the backdrop of the recent acceleration in domestic consumer demand recovery? Thank you.

Liu Guoqiang:

Thanks for asking. These are three questions, and I'll answer them individually.

First, on the issue related to the interest rate cuts, Mr. Yi said that last year our corporate loan interest rate was 4.17%, which was a record low. This year, the People's Bank will, in accordance with the decision and deployment of the CPC Central Committee and the State Council, continue to accurately and fully implement the prudent monetary policy, which is the general direction. But how to use specific policy tools, we will consider in an integrated manner, and choose accordingly. First, we will give prominence to the domestic target. Currently, the domestic economy is improving, but there are also some uncertainties. So for the next step, we will strengthen research, coordinate growth and prices, and adjust monetary policy tools in a timely and appropriate manner according to the changes in economic development and needs. Second, we will coordinate short-term and long-term, strengthen the cross-cyclical and counter-cyclical adjustments, adhere to normal monetary policy, maintain positive interest rates and an upward yield curve, and refrain from resorting to a deluge of strong stimulus policies. Third, we will keep in mind both domestic and international situations. We will focus on domestic development and reinforce sound regulation, and also pay close attention to international developments and better manage expectations, taking into account both the internal and external balance.

Second, structural monetary policy. Structural monetary policy has been leveraged more in the past few years. By the end of last year, there were a total of 15 structural monetary policy tools, with a balance of about 6.4 trillion yuan, which have effectively guided financial institutions to reasonably grant loans and promoted the tilting of financial resources to key areas and weak links. Structural monetary policy tools mainly play the leading role and work as a driving engine; that is, structural monetary policies drive financial institutions' subsequent loans, and these loans are actually those institutions' main way to support the development of the national economy. In the next step, we will continue to evaluate structural monetary policy tools and do a good job of classifying and managing them. For some key areas and weak links that need long-term support, structural monetary policy will give longer-term, continuous support, such as in the field of inclusive finance. Some tools with more pronounced phase characteristics should be withdrawn in a timely manner. Of course, we should emphasize a slow exit, making sure not to withdraw sharply. There are also a number of tools that can be considered to interconnect with other policy tools.

Third, regarding inflation, as Mr. Yi said earlier, China's CPI increased at 2% last year. Over the past five and even ten years, the CPI increased also at 2%. These achievements are not easy to come by. We attach great importance to the issue of prices, and we judge that the overall level of inflation in China in 2023 will remain moderate. In the short term, inflationary pressures are generally manageable because the economy is in the process of recovery and development, with inadequate effective demand still being the biggest challenge. The industrial and supply chain is running smoothly. Supply is relatively adequate, and the inflation expectations among citizens are relatively stable, so there are favorable conditions to help maintain the basic stability of prices. For the long term, there remain many unpredictable factors in the external environment, but demand is still gradually recovering. However, while the probability of inflation is not large, that does not mean that there is no chance of it increasing, so we must keep in mind the worst scenarios and remain vigilant against inflation.

In the next step, the PBC will remain committed to the general principle of pursuing progress while ensuring stability, and implement a prudent monetary policy with precision and vigor, so as to help keep major economic indicators within an appropriate range and ensure price levels are kept generally stable. Thank you.

Yicai:

The PBC and the China Banking and Insurance Regulatory Commission (CBIRC) jointly issued the 16-point set of financial measures at the end of last year in a bid to ensure the property market's stable and healthy development. Could you please share with us information regarding the implementation of these measures? Thank you. 

Pan Gongsheng:

Thank you for your question. Before answering it, I'd like to briefly discuss the background of the issue and relevant policies from a broader perspective. 

The CPC Central Committee has attached great importance to the healthy development of the property market. Since the 19th CPC National Congress, the CPC Central Committee has made clear its guidelines and policies for regulating the real estate sector, namely, adhering to the principle that housing is for living in and not for speculation, ensuring the long-term mechanism of keeping land costs, housing prices and market expectations stable, and implementing city-specific measures to facilitate positive circulation and sound development in the real estate sector. Under the leadership of the CPC Central Committee and the State Council, departments and lobal governments have ensured the implementation of the long-term mechanism of the real estate sector. This has helped curb the rapid expansion of the sector, sharp increases in housing prices, and real estate bubbles. 

Since the second half of 2021, some real estate enterprises, such as Evergrande, have been facing high risks with their balance sheets, because they have long been running business with a strategy characterized by “high leverage, high debt and high turnover.” As a result, they found it difficult to continue their business, which led them into crisis. Moreover, the average level of the medium- and long-term property market demand dropped, and the pandemic continued for three years and negatively impacted employment and income expectations. Given the multiple aforementioned factors, the spillover of the real estate sector's risks has increased.

Given the new situations in the real estate sector, the PBC, following the deployments of the CPC Central Committee and the State Council, released the 16-point set of financial policy measures at the end of last year to ensure the sound and stable development of the real estate sector. We have worked with departments concerned to step up efforts on both the supply and demand sides to promote the stable development of the sector. 

On the demand side, differentiated real estate credit policies have been implemented in places according to varied conditions, promoting declines in real lending rates and down payment ratios to provide more support for those buying their first homes or improving their housing situation. In December 2022, the average interest rate for newly issued individual housing loans was approximately 140 basis points lower than the level at the end of the previous year. The minimum down payment ratio allowed by local policies in most cities, apart from several hotspot cities, has reached the lowest national level. 

On the supply side, we have promoted the implementation of the 16-point set of measures to ensure the stable and healthy development of the real estate sector. We have implemented the program to improve the balance sheets of high-quality real estate enterprises, prevented financial institutions from getting overly risk-averse, and guide them to provide normal financing services. Real estate developers have been included in a program that supports private companies' bond financing. As such, financing in the real estate sector has been stable and in an orderly manner. We have rolled out 350 billion yuan of special lending set aside for presold projects' delivery, and set up a 200-billion-yuan loan support program for the same reason and a 100-billion-yuan loan support program for rental housing. We have made great efforts to guide financial institutions to promote mergers and acquisitions in the property sector, thereby accelerating the clearing up of risks by giving full play to the role of the market.

With the easing epidemic situation and the adjustment of the pandemic prevention and control measures, the policies put in place earlier have been able to bring greater positive influence and work more effectively. The recovery of market confidence has recently accelerated, and transactions in the real estate market have increased. Moreover, the financing environment of the real estate sector, especially high-quality real estate enterprises, has significantly improved. I'd like to share some figures. From September to December last year, real estate development loans increased by 230 billion yuan, 420 billion yuan more than in the same period in the previous year. In the fourth quarter, real estate companies issued 120 billion yuan of domestic bonds, up 22% year on year. In January this year, new loans for real estate development exceeded 370 billion yuan, an increase of 220 billion yuan year on year; 40 billion yuan of domestic real estate bonds were issued, up 23% year on year.

With China's ongoing urbanization, its residents and families have a great deal of demand potential for housing improvement. Moreover, the model of encouraging both housing rentals and purchases has great potential. Going forward, we will implement the deployments made by the 20th CPC National Congress and the Central Economic Work Conference, upholding the principle that housing is for living in and not for speculation. We will sum up experience and draw lessons from the development of the Chinese real estate sector and work with financial departments concerned to ensure the implementation of policies that have already been released. By doing so, we aim to support people in buying their first homes or improving their housing situation, help satisfy new urban residents' housing demand, and facilitate a housing market that prioritizes both housing rentals and purchases. We will improve the foundational system of real estate finance and the macro-prudential management system to promote the smooth transition of the real estate industry to a new development model. Thank you. 

Bloomberg:

I have two questions. First, from the perspective of weakening external demand, boosting domestic demand, and a widening service trade deficit this year, the current account surplus may provide less support for exchange rates. How does the central bank view the exchange rate situation this year and how will the central bank manage the RMB exchange rate? Second, China has shown a relatively good economic performance so far this year. Does the central bank still need to consider lowering the reserve requirement ratio or interest rates to stimulate economic growth?

Yi Gang:

As many have analyzed, the overall economic situation is improving regarding the exchange rate, but imports, exports and external demand are still relatively weak and face uncertainties. Just now, you asked how to view the exchange rate in this context. In the past few years, the mechanism through which the market sets the exchange rate has become increasingly more flexible , so it has acted well as an automatic stabilizer. In the past five years, the exchange rate has fluctuated at a ratio of about 4%, similar to that of major countries in the world. In the past, the fluctuation ratio of the RMB exchange rate had been minimal. However, in recent years, the ratio has gradually increased reasonably. In the past few years, the RMB exchange rate against the U.S. dollar has surpassed the "7" threshold three times, but it quickly fell back below the threshold. As you can see, the "7" threshold is not a psychological barrier. Though the exchange rate has surpassed the "7" threshold three times and fallen below, the overall economy has remained stable, and so have people's expectations. It is convenient for companies and people to enjoy foreign exchange services. The stability of economic and social expectations matters.

We have maintained a managed floating exchange rate regime based on market demand and supply, as well as a basket of currencies. It has worked very well and allowed businesses and the public to access foreign exchange services relatively freely to meet their reasonable foreign exchange needs concerning education, tourism, and imports and exports. Our view is that these policies should continue to be upheld in such a context. If you take a longer view, the stability of exchange rates is closely related to the well-being of the people. China's GDP last year was 121 trillion yuan, or about $18 trillion, with a per capita average of 86,000 yuan, or $12,700. Therefore, our comprehensive national strength and the well-being of our people are reflected not only through the RMB but also through the hard currency converted from the RMB. This is an important aspect of our modernization drive. Over the past 20 years, the RMB, despite fluctuating, has generally appreciated 20% against the U.S. dollar over the past 20 years, or 1% annually on average. At the same time, the real effective exchange rate of RMB calculated by the Bank for International Settlements has appreciated by about 40% over the past 20 years. A 40% appreciation over two decades is equivalent to an annual appreciation of 1% to 2%, which is a relatively appropriate level.

It is very important to maintain the stability of exchange rates because we have seen some cases in the world in which some countries are not able to avoid falling into the “middle-income trap” because of the sharp depreciation of exchange rates. So, on the one hand, we will keep exchange rates stable; on the other hand, our exchange rates must have flexibility . Just now, you asked about our considerations for this year and if we will continue implementing the mechanism. Overall, the RMB exchange rate will remain stable at a reasonable and balanced level. Some small fluctuations may appear driven by the market, but such fluctuations benefit the economy, China's imports and exports, and the people's expectations. In addition, more and more of our companies have learned to use hedging and forward settlement and foreign exchange tools to secure profits.

Your second question was whether we will cut the reserve requirement ratio or interest rates. We believe that the current level of some of the main variables of our monetary policy is relatively appropriate, as is the level of real interest rates. As for the reserve requirement ratio cut, we have cut it 14 times since 2018. These 14 cuts lowered the average statutory reserve requirement ratio from nearly 15% to less than 8%, a drop of over 7 percentage points. The less than 8% statutory reserve requirement ratio after the 14 cuts in the past five years is not as high as it used to be, but considering all things, cutting the reserve requirement ratio is still a relatively effective way to provide long-term liquidity and support the real economy so that overall liquidity remains at a reasonably ample level. I would like to invite Mr. Pan to share more about the exchange rate.

Pan Gongsheng:

Thank you. Mr. Yi has already given a very good and comprehensive answer. In recent years, China's ratio of current account surplus to GDP has stayed at about 2%, and the figure for last year was 2.3%, according to preliminary estimates. This year, there are many discussions about a potential slowdown of the global economy and trade and the potential gradual recovery of international flows as China's personnel flows adjust to anti-COVID policies and how this will affect trade in goods and services under the current account. We have done much research on it, and we believe that our current account has the basis and conditions to maintain a reasonable surplus.

The factors affecting the foreign exchange market and exchange rates are very diverse, such as economic growth, monetary policy, financial market, occasional risk event, and geopolitics. I would like to talk about our perspective of observing and analyzing the problem for your reference.

First, economic growth. With an easing epidemic situation, the optimized COVID-19 containment measures, and the effectiveness of earlier government policies to support businesses, domestic and foreign institutions predict that China's economic growth will be around 5% this year. On the other hand, it is also widely believed that major developed economies such as the United States may enter an economic recession, but there is a considerable divergence in opinions on how deep the recession could be. The growth gap between major economies such as China and the United States is expected to widen. China's economic growth will rebound to 5.2% in 2023, and US growth will slow to 1.4% in 2023, according to a report recently published by the International Monetary Fund (IMF).

Second, changes in the external financial environment. The market has different views on the peak interest rate of the Fed's current rate hike cycle and how long it will remain at a high level. However, there is a relatively high degree of consensus regarding the end of this round of interest rate hikes and the weakening momentum of the continued appreciation of the dollar. Therefore, the interest rate differential between China and the United States will remain stable or tend to diminish, the Fed's tight monetary policy will tend to ease this year, and the overall spillover effect will be marginally weakened.

Third, the investment value and attractiveness of Chinese yuan assets. As the Chinese economy is on course for a robust comeback and the country further advances its financial opening-up, the investment and risk-aversion attributes of yuan assets are highlighted. At present, the valuation of the domestic stock market is relatively low, and the interest rate differential between China and the United States is stable and narrowing, so yuan assets will show good investment value.

Fourth, if journalist friends observe and analyze carefully, you will feel that in recent years, the operation of China's foreign exchange market has shown a new feature. The operation of the foreign exchange market has shown relatively strong resilience, the main players in the market have become more mature, and the trading behavior has become more rational. In addition, the PBC and the SAFE, as regulators of the foreign exchange market, have also become more composed, calm, and experienced in the face of market changes.

Therefore, we are confident and capable of maintaining the stable operation of China's foreign exchange market and the basic stability of the RMB exchange rate at a reasonable and balanced level. Thank you.

China Securities Journal:

With the continuous opening-up of China's financial industry, we can see that the international status of the renminbi has greatly improved, and it has remained among the world's major currencies. My questions are, what are the achievements in promoting the internationalization of the renminbi? In 2023, what are the considerations of the PBC in promoting the internationalization of the renminbi? Thank you.

Pan Gongsheng:

Thank you for your questions. The process of renminbi internationalization has gone through more than a decade. With the growth of the Chinese economy and the increase in openness, renminbi's functions as an international currency in cross-border payments, investment and financing, reserves, and pricing, have been comprehensively enhanced. The international status of renminbi has also greatly improved, manifested in the following aspects:

First, renminbi accounts for about 50% of the country's total cross-border receipts and payments. In 2022, China's cross-border receipts and payments settled in renminbi totaled 42 trillion yuan, an increase of 3.4 times compared to 2017.

Second, renminbi's weighting in the IMF's Special Drawing Rights (SDR) ranks third currently. More than 80 countries and economies around the world have included renminbi in their reserve currencies, making it the fifth major reserve currency in the world.

Third, the use of renminbi in financial transactions continues to expand. China's bonds have been included in the three major international bond indices. By the end of last year, the balance of foreign entities holding renminbi assets in China was 9.6 trillion yuan, an increase of 1.2 times from 2017. The scale of stocks and bonds held by foreign entities was 3.2 trillion yuan and 3.5 trillion yuan, respectively. Overseas issuers have issued a cumulative total of 630 billion yuan in Panda bonds in China's bond market.

Fourth, the PBC has signed bilateral currency swap agreements with central banks or monetary authorities of 40 countries and regions, with a total amount of more than 4 trillion yuan. Last year, the PBC and the Hong Kong Monetary Authority upgraded the currency swap agreement to a long-standing one, increasing the swap size to 800 billion yuan. Moreover, we have expanded the arrangement of offshore renminbi clearing banks. Currently, 31 renminbi clearing banks have been authorized in 29 countries and regions, covering major international financial centers around the world.

The above is about the progress in RMB internationalization. We believe that we are currently facing a relatively favorable environment and opportunities in advancing RMB internationalization. First, over more than ten years of development, with the establishment of RMB clearing banks and local currency swap networks, the growth of the offshore RMB market, the opening-up of the domestic financial market, and the continuous improvement of the overseas layout of Chinese-invested financial institutions, we believe that the RMB has preliminarily shown the network effect of its international use. Second, as we deepen the reform of the RMB exchange rate formation mechanism, the RMB exchange rate has become more flexible, and enterprises are more willing to use the RMB in cross-border trade, investment and financing to avoid the risk of currency mismatch. Third, as China's economy gains growth momentum and its financial market further opens up, the investment and risk-hedging functions of RMB assets have been gradually enhanced. Fourth, the international monetary system is more diversified with the change in the global geopolitical and economic development environment. Therefore, we can conclude from these factors that RMB internationalization still faces a better environment and opportunities.

Next, we will earnestly implement the guiding principles of the 20th CPC National Congress, coordinate development and security based on the market-driven operations and independent choices of enterprises, and promote the internationalization of the RMB in an orderly manner. Our main work priorities are as follows: First, we will focus on trade and investment facilitation, improve the fundamental systems for RMB settlements in cross-border investment and financing transactions, improve cross-border RMB infrastructure, and expand the clearing bank network. Second, we will accelerate the institutional opening-up of the financial market, enhance the opening-up of China's foreign exchange and financial market and ensure better access to it, in a bid to build a more friendly and convenient investment and financing environment. Third, we will support and promote the healthy development of the offshore RMB market, improve the supply mechanism of RMB liquidity in the offshore market, and enrich RMB product systems in the offshore market to promote a virtuous cycle of the onshore and offshore RMB markets. Fourth, we will enhance the management, risk prevention and control capabilities of cross-border capital flow based on a broader opening-up environment. We will also establish and improve an integrated macro-prudential management framework for the cross-border capital flow of local and foreign currencies to guard against risks related to cross-border capital flow.

That's all about the current progress, situation and our next plan.

Yi Gang:

I fully agree with Mr. Pan's answer; please continue.

The Paper:

Data from the PBC shows that China's deposits hit a record high last year. How does the central bank view this data? Thanks.

Liu Guoqiang:

Thank you for your question. The significant increase in household deposits has been an eye-catching change in financial indicators since last year. In 2022, China's new household deposits increased by 17.84 trillion yuan, 7.94 trillion yuan more than the previous year. Since the beginning of this year, household deposits have maintained a fast-growing momentum. In January, household deposits rose by 6.2 trillion yuan, up 790 billion yuan year on year.

The rise in household deposits is mainly affected by consumers' spending and investment status and increased preference for liquidity. On the one hand, the COVID-19 epidemic has had a certain impact on consumption. As consumption decreases, savings will grow. A survey of depositors by the PBC showed that 61.8% of residents intended to save more money in the fourth quarter of 2022, up 10 percentage points year on year. About 22.8% of residents preferred to spend more, down 1.9 percentage points year on year. After the optimization of epidemic prevention and control policies, consumption has been significantly released, but it still needs time to recover. On the other hand, residents' lower appetite for risk and slower investment growth has led to a corresponding increase in deposits. In the fourth quarter of 2022, 15.5% of residents preferred to invest more, down 8 percentage points from a year earlier. By the end of January 2023, the asset management products of China's financial institutions totaled 95.9 trillion yuan, a figure directly summarized, down 2.4% year on year. Among them, household assets amounted to 40.9 trillion yuan, down 2.5% year on year. In addition, this year's Spring Festival fell in January. As enterprises paid wages and bonuses ahead of the Spring Festival, some of the deposits of enterprises were transferred to household savings, thus bringing an increase in household deposits.

As the macroeconomic performance improves, our residents' confidence in consumption and investment will increase, and their savings will gradually return to normal. The 20th CPC National Congress emphasized that we need to better leverage the fundamental role of consumption in stimulating economic growth. Clear requirements were put forth at the Central Economic Work Conference for prioritizing consumption recovery and expansion this year. After the optimization of epidemic prevention and control, the shortage in logistics and labor flow has been significantly improved, and consumption scenarios expansion has been sped up. Precautionary savings aggregated in the early stages are expected to be gradually released to meet actual consumption demand. A series of policies to promote consumption have been unveiled and implemented, and the policy effects will gradually become evident. In addition, as the economy improves, it will help enhance residents' confidence in investment, and residential investment will gradually return to normal levels.

Going forward, the PBC will act upon the spirit of the 20th CPC National Congress and the Central Economic Work Conference, accurately and strongly implement a prudent monetary policy, provide good financial services for residents to expand consumption and reasonable investment, and provide strong financial support for the development of the real economy. Thank you.

Cover News:

At the end of 2022, M2 money supply growth increased 11.8% year on year. In January this year, M2 achieved an increasing growth rate of 12.6% over the same period last year, the highest in six years. How do you view the rapid growth of M2? Thank you.

Liu Guoqiang:

Thank you for your question. At the end of January this year, the balance of M2 was 273.81 trillion yuan, a year-on-year increase of 12.6%, which was 0.8 and 2.8 percentage points higher than the end of December and the same period of last year, respectively, continuing its rapid growth since 2022.

The high growth rate of M2 is mainly due to the intensified measures of counter-cyclical adjustments in macro-regulation and the strengthening of financial support for the real economy by the financial system. Since 2022, due to the impact of unexpected domestic and foreign factors, China's economy has experienced acute downward pressure. In order to maintain macroeconomic performance, vigorous efforts have been made in counter-cyclical control policies, credit has maintained rapid growth, and derivative currencies have increased accordingly.

China has a financing structure dominated by indirect finance. Indirect finance is mainly based on credit loans, and direct finance mainly covers stocks and bonds. The assets of depository financial institutions in China account for more than 60% of the financial sector, which is much higher than that of developed countries in Europe and the United States. Indirect finance will lead to more derivatives of deposits, driving up the total amount of money. Since last year, M2 has been mainly generated through the expansion of assets in indirect financing. At the same time, due to fluctuations in the financial market, funds from wealth management and other asset management products have returned to the balance sheet, which has also led to the expansion of bank balance sheets, so the growth rate of M2 has been relatively high. If we combine the on-balance and off-balance sheets and look at social mobility in a comprehensive manner, the M2's growth rate is about 9.4%.

In addition, there are certain differences between China's M2 threshold and major countries. China's M2 threshold is relatively low, and there are no restrictions on the length and number of deposits, while other countries implement restrictions. For example, the U.S.'s M2 only includes fixed-time deposits of less than $100,000 and does not include fixed-time deposits greater than $100,000. In the European Central Bank ECB's M2, fixed deposits only include those of two years or less. The differences in these thresholds also makes the total size of China's M2 appear relatively large.

In general, while we are making counter-cyclical adjustments to maintain stable macroeconomic performance, our monetary policy remains prudent, and we will resolutely refrain from resorting to a deluge of strong stimulus policies.

In the next stage, the PBC will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly study and put into practice the spirit of the 20th CPC National Congress and the Central Economic Work Conference, and continue to maintain a prudent monetary policy. While focusing on expanding domestic demand and vigorously supporting the real economy, we will refrain from resorting to a deluge of strong stimulus policies. Thank you.

Financial Times:

Since China put forward the "dual carbon" goals, green finance has ushered in a broad space for development. What role does the PBC play in supporting green development? What are the further considerations? Thank you.

Yi Gang:

As you all know, in 2020, General Secretary Xi Jinping made a major policy decision for peaking carbon dioxide emissions and achieving carbon neutrality and announced China would strive to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060. The key to achieving these goals is to reduce carbon emissions. We know that carbon emissions have a negative externality . That is, companies or units that emit carbon do not pay for the carbon they emit, so their carbon emissions have a negative impact on society. What we can do in finance is to reduce this negative externality and gradually reduce the green premium. How to do this? We need to strengthen information disclosure. This way, the public will know who is emitting carbon and how much is being emitted, helping them to gradually realize that whoever emits carbon will bear the cost of their carbon emissions. This will reduce the green premium and make our green and clean energy cheaper so that households and enterprises are more willing to use green products.

In 2021, the PBC introduced the carbon-reduction supporting tool, whereby it rolled out re-lending programs for financial institutions with an interest rate of 1.75%, allowing them to offer concessional loans in accordance with market principles for sectors involving clean energy, energy conservation and environmental protection, and carbon-reduction technologies. Financial institutions receiving low-interest re-lending loans from the PBC must abide by one condition: they must promise to release their carbon emission-related loan balance, interest rate, and effect. The release of this information should be subject to the oversight of independent third-party institutions and the public while also being conducive to the promotion of the green development philosophy. The goals of peaking carbon emissions and achieving carbon neutrality require the people and society to develop concepts about eco-friendly lifestyles, green manufacturing, energy conservation, and carbon emission reduction. To achieve this goal, we have made plenty of efforts to promote carbon accounting and the release of environmental information.

So far, re-lending loans worth over 300 billion yuan have been issued via the carbon-reduction supporting tool, and supported commercial banks in issuing loans worth more than 500 billion yuan. This has helped reduce carbon emissions by the equivalent of 100 million tons of CO2. Two foreign banks were also included in the scope of the tool last year.

We also strengthened international cooperation on green finance. As co-chair of the G20 Sustainable Finance Working Group, China took the initiative to formulate the G20 Transition Finance Framework . Approved last year at the G20 Summit in Bali, Indonesia, the framework has become a guidebook for all countries' financial sectors to support green and low-carbon development. Meanwhile, China and the European Union also jointly issued two editions of the ''Common Ground Taxonomy.'' According to the latest version of this classification, the convergency between Chinese and EU economic activities for climate change mitigation has reached 80%.

Looking ahead, we will improve the standard systems for green finance and strengthen financial institutions' capacity for releasing environmental information. We will also support the development of green finance tools, enhance international cooperation on green finance, and bolster the green transformation of the national economy in a bid to make our ways of production and life more eco-friendly.

Chen Wenjun:

The last question, please.

China News Service:

Due to the impact of multiple factors, global economic and financial governance faces new challenges and requires joint efforts from all countries to cope with the difficulties. In the past few years, what progress has China made regarding global financial cooperation? What are the next plans? Thank you.

Yi Gang:

In recent years, China has adhered to multilateralism and the win-win principle. It has proactively participated in global multilateral governance and played a positive role in pandemic responses, international financial cooperation, and green finance. I'd like to elaborate on global cooperation from the following aspects:

First, we have strengthened communication and coordination with all countries in terms of macroeconomic policies. As we know, the pandemic has dealt a heavy blow to the world's economy since its outbreak. This makes it very important for the world's central banks and finance ministries to communicate their financial and economic policies. We have worked to push global macro policies to jointly support economic recovery so that the world economy can overcome the impact of the pandemic and achieve sustainable growth.

Second, regarding global cooperation, China has proactively participated in the G20's Common Framework for Debt Treatments . In line with the principle of common actions and fair burden-sharing, China has worked to address the debt issues of heavily indebted poor countries and made positive progress.

Third, in the context of a safe and manageable development, we have expanded high-quality financial opening up in an independent and orderly manner. In recent years, in accordance with the arrangements of the CPC Central Committee and the State Council, financial authorities have rolled out over 40 measures to open up the financial sector for both domestic and overseas companies. This has greatly expanded market access to financial services. Since 2018, over 110 financial institutions have been established with foreign capital in China. Meanwhile, we have also worked to promote the opening up of the capital market in both directions. This was applauded by investors both at home and abroad. Just now, Mr. Pan also elaborated on the foreign investment in China's stock and bond market, which has seen significant growth over the years. Chinese bonds and stocks have also been added to multiple global flagship indices, making Chinese assets one of the options for asset allocation among global institutional investors. China's asset allocation also has relevant benchmarks, indices, and sound supporting infrastructure facilities.

There are many other aspects in terms of financial opening up and global financial cooperation. Looking ahead, the PBC will keep strengthening global cooperation in the financial sector, work to make the voice of China and other developing countries more heard in global governance, and see that Chinese ideas can make new constructive contributions to the entire global economic and financial order. Thank you.

Chen Wenjun:

Thanks to all the speakers and friends from the media. Today's press conference is hereby concluded. Goodbye.

Translated and edited by Xu Xiaoxuan, Li Xiao, Liu Jianing, Liu Caiyi, Gong Yingchun, Zhang Jiaqi, Wang Mengru, Zhang Tingting, Yan Bin, Zhu Bochen, Wang Qian, Yang Xi, Li Huiru, Huang Shan, Liu Sitong, Ma Yujia, Wang Wei, Zhou Jing, Yuan Fang, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Wang Wentao, minister of commerce

Mr. Wang Shouwen, China international trade representative and vice minister of commerce

Mr. Chen Chunjiang, assistant minister of commerce

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 2, 2023

Xing Huina:

Ladies and gentlemen, good afternoon. Welcome to the press conference held by the State Council Information Office (SCIO). Today, we are holding the eighth press conference in the series "Embarking on the New Journey — A Government Perspective." We have invited Mr. Wang Wentao, minister of commerce; Mr. Wang Shouwen, China international trade representative and vice minister of commerce; and Mr. Chen Chunjiang, assistant minister of commerce, to brief you on building up confidence, making great efforts and taking new steps for the high-quality development of commerce, and to take your questions.

Now, I'll give the floor to Mr. Wang Wentao for a brief introduction.

Wang Wentao:

Ladies and gentlemen, friends from the media, it's my great pleasure to meet with you here again. First of all, on behalf of the Ministry of Commerce (MOFCOM), I would like to express my sincere gratitude to you for your long-term interest in as well as support and help for China's commerce development.

In the past year, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, MOFCOM resolutely implemented the requirements for keeping the epidemic at bay, stabilizing the economy and ensuring safe development, coordinated epidemic prevention and control with commercial development, and pursued steady progress in commercial operations, which exceeded expectations. The consumer market remained basically stable; foreign trade and investment reached another record high, and has become a highlight of the national economy; outbound investment grew steadily, and new steps were taken in the high-quality development of the Belt and Road Initiative (BRI); and breakthroughs were made in bilateral economic and trade cooperation, with the Regional Comprehensive Economic Partnership (RCEP) Agreement entering into force and the work team for China's accession to the Digital Economy Partnership Agreement (DEPA) being formally established.

The 20th CPC National Congress drew up a grand blueprint for comprehensively building a modern socialist country, emphasizing that we will make sure that our implementation of the strategy to expand domestic demand is integrated with our efforts to deepen supply-side structural reform, and boost the dynamism and reliability of the domestic economy while engaging at a higher level in the global economy. Commerce development is an important component of the domestic economy, serves as an important intersection linking the domestic and global economy, and plays an important role in fostering a new development pattern. These are the "three important roles" that we proposed for commerce development. We will shoulder an important mission on advancing the path to Chinese modernization. We will bear in mind the country's most fundamental interests, never forget the mission, stick to the "three important roles," promote the high-quality development of commerce, better serve the fostering of a new development pattern, and make greater contributions on the new journey in the new era.

2023 is the first year in fully implementing the guiding principles of the 20th CPC National Congress. MOFCOM will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely implement the guiding principles of the 20th CPC National Congress and the decisions of the Central Economic Work Conference, fully and faithfully apply the new development philosophy, better balance both domestic and international situations, coordinate epidemic prevention and control with commercial development, and development with security, recover and expand consumption, keep foreign trade stable and improve its structure, make greater efforts to attract and utilize foreign investment, promote high-level opening up, and pursue effective improvement of quality and reasonable growth of quantity to help set the stage for building a modern socialist country in all respects.

Next, my colleagues, Mr. Wang Shouwen and Mr. Chen Chunjiang, and I will take your questions. Thank you.

Xing Huina:

The floor is now open for questions. Please identify the media outlet you represent before asking your questions.

China News Service:

At the Central Economic Work Conference, it was said that the country would prioritize the recovery and expansion of consumption. At present, domestic consumption is showing a steady recovery and good development momentum, but at the same time, it is also affected and restricted by factors such as citizens' consumption willingness and consumption environment. What measures will MOFCOM take to recover and expand consumption this year? Thank you.

Wang Wentao:

Let me take this question. Thank you for the question. Recently, the consumer market has been the focus of much attention. Since the beginning of this year, from New Year's Day to now, the entire consumer market has been gradually and steadily recovering with an obvious momentum. Monitoring by big data business platforms showed that during this year's Spring Festival holiday, the passenger flow in key business districts in 36 large and medium-sized cities across the country increased by 27.8% compared with the same period in the previous lunar year. Some business districts were filled with people. The sales of key retail and catering enterprises increased by 6.8% compared with the same period of the previous year. Some shopping malls, supermarkets, theaters and tourist attractions in various places were bustling. Lines could be seen outside many restaurants, and the table turnover rate was high in some restaurants enjoying popularity online. Bookings for hotels and flights began to heat up again, and culture, entertainment, sports and fitness consumption rapidly increased. It's fair to say that consumption got off to a good start at the beginning of this year, showing an obvious trend of recovery.

It was stated at the 20th CPC National Congress that we would work to expand domestic demand and better leverage the fundamental role of consumption in stimulating economic growth. The Central Economic Work Conference emphasized that priority should be given to restoring and expanding consumption. I think these statements attach importance to the function and status of consumption, respectively. "The fundamental role" focuses on the function of consumption, while "being given priority" puts an emphasis on the status of consumption. In your question, you mentioned two keywords: restoring and expanding, so I would like to answer your question and introduce our specific thought and measures through these two words. Restoring mainly refers to our present work. Part of consumption was affected by the COVID-19 pandemic, especially contact-based offline consumption. Therefore, our main task at present is to restore it, working to increase consumers' confidence and restore market vitality. Expanding refers to the future. On the basis of recovery, we will improve consumption conditions and innovate consumption scenarios, making efforts to promote consumption upgrading and the release of potentials. Based on stabilizing consumption in key areas and innovating and developing new-type consumption, we will focus on three aspects to restore and expand consumption.

First, we will carry out a series of "Year of Consumption Promotion" activities to boost consumers' confidence and consumption vitality. MOFCOM has designated 2023 as the "Year of Consumption Promotion" and will coordinate with relevant government departments and all localities, industries, associations, enterprises, and organizations to carry out a series of events to encourage purchases. We will create a strong consumption atmosphere with the theme of "Joys for All Year, Benefits for Everyone." Specifically, we have a plan of "6+12+52+N." "6" refers to six major themed activities. The months of January and February are the Spring Festival consumption season, and March is designated as the national consumption promotion month, for which we held a launch ceremony with the city of Beijing the evening before last. Following these events, we will also have consumption seasons focused on low-carbon, summer, autumn, and international exchanges, respectively, among others. "12" refers to 12 key expos, including the China International Import Expo (CIIE), which will help promote supply-demand matching and lead consumption trends. "52" indicates the 52 weeks in a year, during which various activities will be held regularly across the country, such as "A Happy Spring Festival with Ice and Snow, " "New Appliances, Green Lifestyle," and "Celebrating Asian Games, Enjoying Asian Specialties." "N" refers to supporting localities in holding distinctive consumption boost activities that align with their unique characteristics and consumption scenarios, such as the Beijing-Tianjin-Hebei Consumption Season, Shanghai 5·5 Shopping Festival, and Zhejiang's "Consumption in Zhejiang." With such activities being held one after another, we will ensure that there are constantly brilliant consumption promotion activities, achieving the goal of "holding activities of different themes for each quarter, new expos for each month, and new scenarios for each week." These activities are expected to bring about waves of consumption.

Second, we will stabilize and improve consumption in key areas, consolidating consumption fundamentals. Automobiles, home appliances, home furnishing, and catering are four major fields of consumption, contributing to one-fourth of the overall consumption. Therefore, they are key areas for restoring and expanding consumption. Last year, a series of policies were introduced to promote the sales of new energy vehicles and their positive impact was evident. The sales of new energy vehicles nearly doubled to exceed 6.8 million. The sales of new energy vehicles accounted for a bigger part of the sales of all types of automobiles. For every four cars sold, one is a new energy vehicle. This year, we will not only fully implement existing policies but also proactively introduce new policy measures. For instance, we will guide local departments to introduce new energy vehicles to rural areas, improve the operational charging environment and other services, and support purchases of new energy vehicles. Certainly, promoting new energy vehicles in rural areas presents more complicated issues than in cities, such as how to improve the supporting facilities including charging stations. We will coordinate with relevant departments to make proper plans and work harder to make steady progress. We will also expand the circulation of second-hand cars, promote purchases of green and smart home appliances in rural areas, and encourage the exchange of old appliances for new ones to stimulate household consumption of appliances and furnishings. Meanwhile, we will support the healthy development of new consumption forms and models to boost consumption vitality.

Third, we will advance the fostering and development of international consumption center cities, and innovate carrier scenarios. It is an important decision and arrangement made by the Party Central Committee to foster and develop international consumption center cities. In recent two years, we have collaborated with five cities, including Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing, to strengthen top-level design and overall planning. Backed by steady progress, we have achieved preliminary results. Shanghai has become a benchmark of the "first-store economy," Beijing has completed the upgrading and renovation of 22 traditional business districts, Tianjin's Golden Street and the Florentia Village outlet mall have been upgraded, Guangzhou has gathered new momentum through expos, and Chongqing has focused on cultivating the night economy and shaping the city brand of "sleepless Chongqing." Going forward, we will continue to focus on the three keywords: international, consumption, and center. We will strengthen the functional orientation and distinctive features of each city, and promote the implementation of plans for fostering and developing center cities through project-based management and checklists. We will also improve consumption carriers and the environment, navigate new consumption fashions and trends, and play a demonstrative and leading role in the expansion and restoration of consumption. Thank you.

CCTV:

China has spent a decade on building and improving its pilot free trade zones (FTZs). The 20th CPC National Congress proposed implementing a strategy to upgrade pilot FTZs. What will MOFCOM do next to constantly promote the country's FTZ construction, and how can we best play FTZs' role of testing ground for China's reform and opening up? Thank you.

Wang Wentao:

Thanks for your questions. The construction of pilot FTZs is a crucial strategic measure taken by the CPC Central Committee to deepen reform and opening up in the new era. It has been ten years since China established its first FTZ in Shanghai in September 2013. So far, we have established 21 pilot FTZs across the country, including the Hainan Free Trade Port, and basically shaped an innovative pattern of reform and opening up covering the east, west, north, south, and central regions. Over the past decade, we introduced a series of pioneer practices, continuously broke new ground, and had many institutional innovations on reform and opening up replicated in other places across the country, giving full play to the role of FTZs as testing grounds for China's reform and opening up. These are mainly demonstrated in the following aspects.

First, FTZs became a leading force for China's high-quality opening up. Many "firsts" occurred in FTZs. The first negative list for foreign investment access was rolled out at an FTZ, marking China's first step in adopting a foreign investment administration model of pre-establishment national treatment plus a negative list. After seven reductions, the number of items on the FTZ negative list for foreign investment have been reduced to 27 from 190, and the number of items regarding the manufacturing sector on the list has dropped to zero. The expansion of opening up in the service sector illustrates that the country's opening up is widening. In the Hainan Free Trade Port, we put in place the first negative list for cross-border service trade, achieving fundamental change in the management model of service trade.

Second, the FTZs became vanguards for China to deepen its reforms. In FTZs, we first implemented the reform separating operation permits from business licenses, first carried out reform on foreign investment access system, established the first Single Window system for international trade, and opened the first batch of free trade accounts. Many "firsts" have been practiced and explored in FTZs and then applied nationwide. At present, 278 institutional innovations have been applied across the country, involving investment facilitation, trade facilitation, financial openness and innovation, operational and post-operational supervision, and reform of state-owned enterprises, which continuously released reform dividends. 

Third, the FTZs became a lead for China's high-quality development. Relying on the advantages of China's super-large market and its own resources, FTZs have attracted global high-quality resource elements and seen more and more high-end industrial clusters taking shape. In 2022, the actual use of foreign capital in new and high-tech industries of the 21 pilot FTZs increased 53.2% year on year, far exceeding the national average. Their ability to attract investment and shape industrial clusters showed clearly. The FTZs have been building on their ability to support major national strategies, leveraging their strategic positions and advantageous situations.

The 20th CPC National Congress proposed accelerating the development of the Hainan Free Trade Port and implementing a strategy to upgrade pilot FTZs. To implement the strategy, we should focus on the word "upgrade." To upgrade pilot FTZs, we will try and align with high international standards to promote opening up through institutional guarantees and give full play to the role of FTZs as comprehensive testing platforms for China's reform and opening up so as to explore new paths to comprehensively deepen reform and expand opening up. Our efforts will mainly be made in three aspects:

First, we will align with international economic and trade rules that hold high standards. We will focus on key fields like trade and investment, government procurement, intellectual property rights, and the environment and formulate and issue pilot reform measures. We will carry out trials in the free trade port and in some qualified FTZs, and be the first to establish institutional systems and regulatory models that are in line with high-standard international economic and trade rules in order to make breakthroughs in deepening reforms in relevant areas at home.

Second, we will improve the market access management. We will enhance stress tests, an important function of the FTZs, in investment and service trade. Next, we will further shorten the negative list for foreign investment and expand opening-up in the modern service industry. In the service trade sector, we will introduce negative lists for cross-border trade in services, one for FTZs and one for other places across the country, and implement a new model for managing cross-border trade in services on a larger scale.

Third, we will promote integrated reforms and collaborative innovations. We will enhance trans-department, trans-sector, and trans-industry coordination and intensify systematization, integration, and collaboration of pioneer projects so as to adapt to the current situation of new industries, new models, and new forms of business. We will further improve liberalization and the facilitation of trade and investment, strengthen institutional and integrated innovation, and focus on a new generation of information technology and biomedicine. We will also explore institutional innovation to accelerate the building of a modern industrial system and maintain security and stability for the country's industrial and supply chains. Thank you.

Hong Kong Bauhinia Magazine:

This year marks the 10th anniversary of the BRI. I would like to ask, what achievements have been made in economic and trade cooperation under the framework of the initiative? What new measures will MOFCOM take to promote the high-quality development of the BRI? Thank you.

Wang Wentao:

Mr. Chen will answer this question.

Chen Chunjiang:

Since General Secretary Xi Jinping put forward the BRI in 2013, MOFCOM has worked with relevant parties to steadily promote economic and trade cooperation along the Belt and Road and made noticeable progress. Trade and investment between China and participating countries have steadily expanded, infrastructure connectivity has been strengthened, and cooperation in industrial chains and supply chains has been constantly enhanced. In terms of trade, from 2013 to 2022, China's trade in goods with countries along the Belt and Road doubled from $1.04 trillion to $2.07 trillion, with an average annual growth rate of 8%. In terms of investment, from 2013 to 2022, China's two-way investment with countries along the Belt and Road exceeded $270 billion. As of the end of 2022, Chinese enterprises had invested a total of $57.13 billion in overseas economic and trade cooperation zones in countries along the Belt and Road, creating 421,000 jobs for local people. In terms of project construction, from 2013 to 2022, the total value of newly-signed contracts and the total turnover of completed projects in countries along the Belt and Road exceeded $1.2 trillion and $800 billion, respectively, accounting for more than half of the total value of overseas projects contracted.

This year marks the 10th anniversary of the BRI. Standing at this new starting point, MOFCOM will thoroughly implement the guiding principles of General Secretary Xi Jinping's important speeches on jointly building the BRI, and decisions and deployments made at the 20th CPC National Congress. We will jointly prepare for the third Belt and Road Forum for International Cooperation and continue to deepen and consolidate economic and trade cooperation along the Belt and Road. We will lay more focus on the following five aspects.

First, we will concentrate on improving quality. We will optimize the trade structure and expand imports of quality goods while continuing to expand trade with participating countries. We will get more deeply involved in the global industrial division of labor and cooperation and improve the two-way investment structure. We will also promote the negotiation and signing of free trade agreements with more participating countries and speed up the building of a free trade zone network covering the Belt and Road countries. We will make good use of trade corridors, promote cooperation in building the New International Land-Sea Trade Corridor, and improve the quality and efficiency of the China-Europe Railway Express service.

Second, we will expand areas of cooperation. We will meet the development needs of participating countries and seek the conclusion of bilateral cooperation agreements on green development, the digital economy, and the blue economy. We will promote all-around cooperation in green infrastructure, green energy, green industries, and green trade and further bolster the green development of the BRI. We will actively foster new forms and models of digital cooperation, promote the development of "Silk Road e-commerce," and create pilot zones for "Silk Road e-commerce" cooperation.

Third, we will launch more quality projects. We will promote the construction of high-quality infrastructure projects with participating countries and expand tripartite and multi-party market cooperation. We will focus on the areas of poverty reduction, health, education, and others, and introduce more "small but beautiful" projects to enhance local people's sense of gain and recognition. We will promote the upgrading of overseas economic and trade cooperation zones and jointly build demonstration zones for economic and trade innovative development with ASEAN countries. 

Fourth, we will build more platforms. We will give full play to the role of multilateral and bilateral economic and trade mechanisms and platforms and promote the establishment of more working groups on unimpeded trade and investment cooperation. We aim to successfully deliver various kinds of exhibitions, such as the China and Central and Eastern European Countries Expo, the China-Arab States Expo, and the China-Africa Economic and Trade Expo. We will earnestly implement the outcomes of the Shanghai Cooperation Organization summits, the China-Arab States Summit, and the China-Gulf Cooperation Council Summit and promote the implementation of the nine programs for China-Africa cooperation.

Fifth, we will strengthen guarantees. We plan to provide high-quality public service products and continuously issue guidelines for overseas investment and cooperation by country and region. We will also promote the signing and upgrading of investment protection agreements with participating countries to provide more guarantees for the high-quality development of the BRI. Thank you.

CNBC:

Some time ago, foreign enterprises were faced with multiple investment options, and some of them even considered options other than China. But recently, many senior executives have said they plan to visit China for market research. What's MOFCOM's comment on this situation? What's your considerations and plans for attracting foreign investment in 2023?

Wang Wentao:

Thank you for your question. The first half of your question refers to some considerations and choices among foreign enterprises, which are temporary and exceptional cases. The second half mentioned that many senior executives from foreign companies plan to visit China, which represents a long-term trend. Recently, my colleagues and I have had many face-to-face exchanges with senior executives of foreign enterprises. From our meetings, we can tell that many executives are still optimistic about China's economic prospects and willing to continue to invest in China and further explore the Chinese market. Some companies have said that the Chinese market is indispensable, rather than optional. We truly appreciate their remarks. 

Statistics showed that China utilized 1.2 trillion yuan of foreign investment last year, up 6.3% year-on-year, or 189.1 billion US dollars, up 8% year-on-year. Since the beginning of this year, it has continued to grow. In January, the utilization of foreign investment was 127.7 billion yuan, up 14.5% year on year, or $19 billion, a year-on-year increase of 10%. Clearly, there have been ups and downs during different months or years. On many occasions, a major project may bring about an increase in foreign investments, which was normal. Over the long run, the Chinese market is an irreplaceable option for global enterprises. 

The Chinese government has attached great importance to the utilization of foreign investments. Not long ago, Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, published an important article in the Qiushi Journal, elaborating on several major issues involving current economic work, one of which was that we would make greater efforts to attract and utilize foreign investments. It was a strong signal and an important deployment of the goals set at the Central Economic Work Conference as well as a guiding principle for our key tasks of this year. We will step up efforts to promote investment, improve services, expand opening up, optimize the business environment, strive to retain high-quality foreign investment, and bring in more high-quality foreign investment. I would like to answer this question in the following four aspects.

In promoting investment, the ministry will initiate a "Year of Investing in China" program. We will pool all resources and work with local governments to attract investment through a series of regular and diversified activities. These activities mainly integrate moves to bring in outside resources with the drive to go global. The focus is to establish platforms and open more channels, thus demonstrating investment opportunities offered by different provinces and regions across the country and showcasing the golden brand of "Investing in China." In terms of "bring in outside resources," we will launch activities such as ceremonies, themed forums, and special promotion campaigns hosted by certain local governments. In addition, events like "Multinational companies tour in China" and CIIE in provincial regions will be held to boost foreign investment. In terms of "going global," we will support local governments and companies to visit the United States, Europe, and some places in Asia and the Gulf region, and launch some key promotion projects in a targeted way. At the same time, we will make use of exhibitions and fairs, give full play to the role of overseas business agencies and investment promotion agencies and carry out investment promotion activities at various levels and in different forms so as to create a better platform and bridge to facilitate investment.

In improving services, we will provide targeted services to foreign-funded enterprises. During the pandemic, we held regular discussions with foreign-funded enterprises and chambers of commerce to acquire an understanding of the problems they had encountered and help solve their problems. Under the foreign trade and foreign investment coordination mechanism, there is a special work group for major foreign investment projects, which collects information on issues concerning foreign-invested enterprises, promoting the settlement of those issues, and providing better services for foreign investors, thus creating a sound business environment for foreign-funded enterprises.

In pursuing higher-quality opening-up, we will explore to reasonably shorten the negative list for foreign investment and further lift or ease restrictions on access for foreign investment. In particular, we will give full play to the pioneering and leading role of platforms such as the pilot FTZs, the Hainan Free Trade Port, the demonstration and pilot projects for wider opening-up of the service sector, and national-level economic development zones. We will promote opening-up at a greater and higher level in line with high-standard international economic and trade rules, and steadily move ahead with institutional opening-up.

Besides, we will optimize the business environment for foreign investors. We will thoroughly implement the Foreign Investment Law and its implementing regulations to apply national treatment to foreign enterprises with high standards. Issues many foreign enterprises raise, such as those regarding government procurement, bidding and standards formulation, will be key focuses of our work. We will work with relevant departments to conduct research and roll out policy measures to ensure foreign enterprises have equal access to those opportunities. We will establish cross-department complaint and coordination mechanisms at all government levels, improve complaint handling, step up the protection of the legitimate rights and interests of foreign investors, and foster a market-oriented, law-based, and internationalized business environment. Thank you.

CGTN:

China has been following the trend of regional economic integration, and actively promoted the building of FTZs. At the 18th CPC National Congress, the CPC decided to advance the Free Trade Area Strategy. Then, at the Fifth Plenary Session of the 19th CPC Central Committee, it announced that the nation would implement the strategy of upgrading FTZs. Moreover, the report to the 20th CPC National Congress proposed to expand the globally-oriented network of high-standard free trade areas. My questions are, what achievements have been made so far in relation to these fields? What kinds of considerations will the ministry take into account for the next step?

Wang Wentao:

Mr. Wang Shouwen will answer this question.

Wang Shouwen:

Thank you for your questions. The Party Central Committee has attached great importance to the construction of FTZs and free trade agreements. Since the 18th CPC National Congress, a series of arrangements have been made. The Ministry of Commerce has paid great attention to the Free Trade Area Strategy and adopted measures to implement this strategy, as made by the Party Central Committee. As such, we have seen many achievements.

First, the circle of friends of the free trade zone is expanding. Before the 18th CPC National Congress, we built 10 FTZs; after the 18th CPC National Congress, we added nine FTZs in the past 10 years. There were 18 free trade partners before the 18th CPC National Congress, and now we have 26. It can be said that we have initially established a network of free trade agreements with neighboring countries as the basis that will also benefit the Belt and Road participants and serve the whole globe. In particular, we made some new progress in the construction of the FTZ last year. The Cambodia-China Free Trade Agreement (CCFTA) and the protocol on upgrading the China-New Zealand free trade agreement were launched. We also signed an FTA early harvest agreement and launched FTA negotiations with Nicaragua. We also started the Version 3.0 China-ASEAN Free Trade Area negotiations and made positive progress in the FTA negotiations with six countries of the Gulf Cooperation Council (GCC). After these FTAs came into effect, they played a vital role in our foreign trade. So far, the import and export volume with our FTA partners reached 14.25 trillion yuan last year, rising by 7.7% over the same period, accounting for 34% of our total foreign trade.

Second, the world's largest free trade bloc was officially launched, that is, the RCEP agreement officially entered into force on Jan. 1 last year, giving a strong impetus to the growth of trade and investment within our region and globally. After this agreement entered into force, the Ministry of Commerce attached great importance to it, and we, together with five other departments, issued the Guidelines on High-Quality RCEP Implementation to promote the formation of good experiences and innovative practices in the implementation of RCEP in more than 30 provincial-level regions. We have also carried out a series of external works to enhance the implementation of RCEP. For example, some countries have signed the RCEP agreement, but their parliaments have yet to ratify them. Therefore, China and other countries have worked together on it, and now all 15 member countries have ratified the agreement. Last year, China's exports to other RCEP members grew by 17.5%, accounting for 27.6% of China's total exports. RCEP has played a vital role in the development of our foreign trade.

Third, we have made progress in actively promoting accession to high-standard economic and trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the DEPA, which represent the highest international standards in the field of economic and trade rules. In relation to the CPTPP, China has had extensive contact and exchanges with its members at different levels. For the DEPA, we have also had excellent communication with its members. On Aug. 18 last year, members of the DEPA agreement decided to set up a working group for China's accession. In November last year, the three members of DEPA and China held a quadripartite ministerial conference. In December last year, the quadripartite held a kick-off meeting of chief negotiators. In addition, we attach great importance to the construction of the Free Trade Area of the Asia-Pacific (FTAAP) and support the promotion of some work plans within the framework of APEC to promote the FTAAP to take more steps forward.

The reporter mentioned earlier that the 20th CPC National Congress proposed to expand the globally-oriented network of high-standard free trade areas. Last year's Central Economic Work Conference also stressed that China will actively seek to join high-standard economic and trade agreements such as the CPTPP and the DEPA, and to deepen domestic reforms to align with high-standard international economic and trade rules, regulations and management. In this regard, the MOFCOM, in accordance with the deployment of the CPC Central Committee, will continue to expand its globally-oriented network of high-standard free trade areas, and we are prepared to take a series of measures to fully implement the guiding principles of the 20th CPC National Congress.

First, we will seek progress while maintaining stability and improving the comprehensive utilization rate of existing FTAs. We will improve the utilization rate of the 19 FTAs just mentioned and give full play to their benefits. Last year, the comprehensive utilization rate of the 19 FTAs was nearly 80%, with some exceeding 98%, but the utilization rate of some FTAs is still relatively low. Therefore, we have to take a series of measures to guide enterprises through training to use these FTAs well and give full play to them, laying a better foundation for expanding the globally-oriented network of high-standard free trade areas.

Second, we will comprehensively promote the Version 3.0 China-ASEAN FTA negotiations this year. We hope to create new highlights like the digital and green economy to make this agreement stay up-to-date with the times and make it more modern. In February this year, we completed the FTA with Ecuador and aimed to sign it this year formally. We also strive to complete the FTA negotiations with Nicaragua this year. We continue to promote the FTA negotiations with the GCC, Israel, and other countries and regions and strive to make more progress. We also have some upgraded FTA negotiations with Peru, South Korea, and Singapore and we strive to achieve good results.

Third, we will continue to facilitate the process of joining CPTPP and DEPA. In terms of CPTPP, Mr. Wang Wentao mentioned that our domestic pilot FTZs should deepen reforms in accordance with the high standards and rules of CPTPP, and we will work on these goals. As for DEPA, we have made a series of arrangements, including ministerial-level as well as department or bureau-level negotiations, to make substantive progress in joining DEPA. Regarding APEC, we will continue to promote the development of the FTAAP, further contribute to regional development, and work with all parties to advance regional economic integration. Thank you.

21st Century Business Herald:

We learned that county-level commercial systems are vital to comprehensively promoting rural revitalization, and relevant arrangements have been made in the "No. 1 central document." What progress has been secured in this regard? Going forward, what measures will MOFCOM take to strengthen county-level commercial systems and promote rural consumption? Thank you.

Chen Chunjiang:

The report to the 20th CPC National Congress states that continuous efforts will be made to pursue the integrated development of urban and rural areas and facilitate the flows of production factors between them. The county-level commerce has its root in rural areas and serves the work, life, and employment of more than 7 million county residents. It connects urban and rural areas and constitutes an important channel for the flow of goods, services, and production factors between them. Relevant arrangements were made in the No. 1 central document. Over the past several years, we have worked with related departments to promote the development of county-level commercial systems and striven to improve the rural consumption environment, increasing service quality and making initial progress along the way. These are mainly reflected in four respects:

First, the commercial network has been continuously improved. In 2022, a total of 983 comprehensive county-based business and trade service centers and 3,941 township markets and business and trade centers were transformed. The transformation work underlines the importance of converting facilities, not traditions, to retain as many of the features and heritage of rural markets as possible.  

Second, logistics services have been constantly accelerated. A total of 506 county-level logistics centers and 650 township-level express delivery outlets have been built. Direct express delivery services are now available in 95% of administrative villages. Currently, more than one-third of counties can have their express parcels sent to villages within a day. 

Third, e-commerce livestreams have been promoted extensively. Livestream marketing has become an effective tool for rural residents to start businesses and increase income. Last year, rural online businesses (online shops) totaled 17.3 million nationwide, up by 6.2% year on year. Among these, 5.73 million, or 33.1%, were livestream e-commerce businesses.

Fourth, the circulation of agricultural products has been improved. A total of 890 wholesale markets for agricultural products and farmers markets have been transformed and upgraded. A total of 960,000 tons of refrigeration storage capacity has been added. The production and marketing connection of agricultural products has become closer, and circulation has become smoother and more efficient. 

Over the past few years, we have witnessed major improvements in rural logistics systems, business facilities, and the consumption environment. However, shortcomings still exist. As for infrastructure, the business outlets in some areas are scattered, and delivery costs are still relatively high. Therefore, further integration and optimization are needed. Regarding the supply of goods and services, goods are often not high in grade, and service provision functions are not rich in variety. In terms of market entities, most are family-based workshops with traditional operation modes, whose levels of digitalization and developing chains are relatively low compared with those in cities. As to market demand, since many villagers have gone elsewhere to find employment, and the majority who have stayed are senior citizens and children, chain businesses and enterprises lack the motivation to invest in rural areas. 

Looking forward, we will earnestly implement the guiding principles of the 20th CPC National Congress and follow the deployment of the No. 1 central document. We will stay problem-oriented, shore up the weak links of county-level commercial development, focus on providing channels at the community level, promote further recovery and expansion of rural consumption, and better contribute to rural revitalization. 

First, we will thoroughly implement the three-year action plan for country-level commerce. We will summarize the previous work experience and apply it at a faster pace, and strive to basically establish relatively improved commercial systems in counties, townships, and villages by 2025 to better meet the work and life needs of rural residents. 

Second, we will speed up efforts to improve the rural consumption environment, act on market principles, and give play to the guiding role of government funds. We will transform and upgrade a group of township markets and a new type of rural convenience stores, improve the logistics systems at the county, township, and village levels, develop new modes such as real-time retail and joint delivery, create consumption scenarios, and stimulate consumption potential.

Third, we will promote the high-quality development of rural e-commerce. We will follow the development trends of the digital economy, develop livestream e-commerce, cultivate agricultural product brands, and sell them via e-commerce across the country to increase rural residents' incomes.

Fourth, we will foster a group of county-level commercial models. We will act on local conditions; explore to make innovations; stimulate localities, enterprises, and the public; and develop a group of county-level commercial models, giving full play to their demonstrating and leading roles. Thank you.

Economic Daily:

The report to the 20th CPC National Congress stated that China would resolve the most pressing difficulties and problems that are of great concern to the people. At present, residents in some urban communities are still facing serious living inconveniences. In recent years, the Ministry of Commerce has started the development of 15-minute community life circles to solve the problem. What progress has been made in this regard? And what will you do next to promote the work?

Wang Wentao:

Your questions are related to the development of community businesses. Studies have shown that more than half of urban residents' daily consumption and expenditure is concentrated within one-kilometer reach of their community, which is a distance of a 15-minute walk. Within that reach, the consumer market has tremendous potential. To build 15-minute community life circles in cities is to accelerate the development of community businesses, which allows residents to enjoy convenient and quality life and services near their residences. This is not only an important way to boost consumption, but also an important measure to improve people's well-being and warm their hearts. 

In the past two years, we have worked with related authorities and fully implemented the decisions and plans of the Party Central Committee. We have started the development of 15-minute community life circles in 80 cities in two batches, and introduced services into communities and residential areas. So far, we have built 1,402 community life circles covering more than 32 million residents. The pilot cities have attached great importance to this work, and many of them have incorporated it into local projects concerning people's livelihoods.

Residents in pilot areas have said that their lives have become easier, faster, and smarter than before. Their basic needs, including three daily meals and necessities, have been met in the community life circles. On this basis, we are striving to meet their personalized, diversified, and specific needs. A survey showed that the residents' comprehensive satisfaction rating reached 93% in pilot areas. Local examples include neighborhood centers and smart food markets in Jiangsu province, Zhejiang province, and Shanghai; community workshops and community libraries in cities such as Ji'nan and Fuzhou; and dynamic maps of life service outlets in 10 cities, including Beijing and Tianjin, with the supply and demand for community consumptions being monitored dynamically through big data.

Next, we will make a summary on the basis of the preliminary work and offer solutions to the problems. We will launch a three-year initiative to build 15-minute community life circles nationwide. Generally speaking, we will adopt city-specific or community life circle-specific measure to meet people's needs. We will not follow a uniform standard or sample, but provide personalized, diversified, and specialized solutions. We will improve the layout plan for community consumption, strengthen consumption platforms and facilities, provide more convenient and smarter services, and diversify consumer businesses. We will encourage all cities at and above the prefecture level, where conditions permit, to take action and build 15-minute community life circles in various forms by 2025 to meet the basic daily needs of the people.

Based on the problems and needs of great concern to the people, as well as the preliminary pilot experiences, we will focus on the matters of people's urgent needs. First, we will develop convenience stores and breakfast stalls. Convenience stores allow people to buy necessities within a 15-minute walk. Breakfast stalls are an urgent need of the people. We will promote more chain, branded convenience stores and breakfast stalls to enter communities and introduce some special, traditional, and entrepreneurial market players. 

Second, we will develop food markets and repair shops. Food markets include large markets and small vegetable shops. We will upgrade them in line with certain standards with more focus on the environment, hygiene, and quality control to assure people in their consumption. Repair shops are mainly engaged in services such as duplicating keys and repairing shoes to meet residents' daily needs.

Third, we will offer better elderly care and child care. We will build and improve service facilities to alleviate people's concerns.

In a word, our work will promote consumption and serve as an important people's well-being project. We will stay problem-oriented and solve issues that are of urgent concern to the people. We will work to transfer the list of people's needs into a list of satisfaction over 15-minute community life circles and build them into happy circles of community for residents. Thank you.

The Poster News APP:

With its foreign trade reaching another record high in 2022, China remains the world's largest goods trader. At present, with rising risks, such as the global economic recession and a slowdown in the growth of external demand, China's foreign trade faces a challenging environment for development. How does the Ministry of Commerce view foreign trade in 2023? What upcoming measures will be adopted to stabilize foreign trade? Thank you.

Wang Wentao:

As you mentioned, China's foreign trade set a record high in 2022. The volume of trade in goods surpassed 40 trillion yuan for the first time, standing at 42.1 trillion yuan, with a year-on-year increase of 7.7%, leading the world for six consecutive years and making a great contribution to the stable performance of the macroeconomy. The contribution of net trade exports in goods and services was responsible for 17.1% of GDP growth, driving GDP growth by half a percentage point. At the beginning, I mentioned this was a highlight of last year's economic work.

With the rising risks of global economic recession and the probability of stagflation, the external environment poses severe challenges to us. According to the WTO's prediction, global trade in goods this year will only increase by 1%, down 2.5 percentage points from 2022. In other words, the possibility of expanding the global foreign trade pie this year is relatively small. We must think about continuing to harness our strengths under such circumstances. The problem now is, as you mentioned, how we should view foreign trade in 2023 and what we intend to do under such circumstances.

How should we view foreign trade in 2023? This year's mounting pressure on foreign trade is due to weakening external demand. Under such circumstances, many enterprises have reported decreased orders and delays in placing orders. Moreover, bulk orders become small orders, and standing orders become short-term orders. Some media, especially economic media, have also provided an analysis. These are all current situations. Apart from weakening external demand and rising risks such as a global economic recession, protectionism and geopolitics have also led to challenges for Chinese enterprises.

What do we intend to do? According to the report to the 20th CPC National Congress, we will build China into a trader of quality, which requires us to stabilize the volume of foreign trade. Building a trader of quality consists of three pillars: upgrading trade in goods, developing new mechanisms for trade in services, and promoting digital trade. We will work on the above three aspects. Generally speaking, we will stabilize trade volume and improve trade structure this year. We will stabilize trade volume first. Meanwhile, with the upgrade in industries, economic development, and enhanced comprehensive strengths, we need to improve the foreign trade structure to strengthen its comprehensive competitiveness.

We will prioritize the following three aspects regarding stabilizing trade volume. First, we will maintain the continuity of policies. By doing so, we intend to anchor market expectations. Last year, foreign trade was confronted with severe challenges. In response to the impact of COVID-19 and uncertainties in external demand, we consecutively issued two policies to stabilize foreign trade, which created 42.1 trillion yuan of foreign trade volume last year. We are researching some policies mainly based on business entities' needs. We are listening to the opinions of relevant provinces and enterprises and get to know their difficulties. Considering all these difficulties, we will introduce policies in line with international rules to promote the development of foreign trade. Second, we will stabilize the market. We will stabilize traditional markets such as the U.S., Europe, Japan, and South Korea and expand emerging markets. Latin American countries and the Belt and Road partner countries have enormous market potential. Last year, trade growth between China and ASEAN surpassed traditional markets. ASEAN has become China's largest trading partner. Third, we will stabilize the trade channels. We will use traditional channels such as the China Import and Export Fair (Canton Fair) to launch trade promotion activities. At the same time, we will also encourage enterprises to participate in overseas expos, and encourage local governments, trade promotion institutions, and business associations to carry out a diverse range of trade promotion activities. According to media reports, since China downgraded its response measures against COVID-19, some enterprises have organized teams to travel overseas to obtain orders. These are proactive actions taken by enterprises.

We will adopt three major measures concerning optimizing the foreign trade structure. First, we will improve the modes of trade. While developing general trade, we will support the transformation and upgrading of processing trade and its shift (to the central and western regions). We will take coordinated steps to promote the rapid and healthy development of new forms and models, which are now growing rapidly, including cross-border e-commerce, overseas warehouses, and the maintenance of bonded goods. Concerning trade in services, based on the pilot program launched earlier, we will advance the building of national demonstration zones for the innovative development of trade in services. Second, we will optimize the layout of foreign trade supply chains. We will implement the coordinated regional development strategy, improving trade quality in the eastern regions and raising the trade proportion of the central, western and northeastern regions. At present, there is an increasingly strong tendency for the shift of industries to the central, western, and northeastern regions. The advantages in locations, resources, and costs of production factors of these regions are gradually emerging, including labor and land resources. In terms of transport, as the China-Europe Railway Express and new land-sea transit routes have been further developed, transport is improving, providing a stronger driving force for industrial relocation. Concerning the layout of supply chains, the costs of production factors in coastal areas continue to increase, but the central, western, and northeastern regions still have huge potential. Third, we will upgrade the product structure and foster new growth drivers for trade. We will consolidate our traditional strengths. Meanwhile, as China's industries move towards a medium-high level, we will continue to nurture new areas of trade growth during this process. Among the three new leading industries that have been frequently mentioned, automobiles, especially new-energy vehicles, as well as lithium batteries and photovoltaic products, have made an impressive performance in exports. They have experienced rapid export growth and developed a new growth driver. We will also support localities in exploring the organization of the digital trade expo, accelerate the construction of a digital pilot zone for global trade in the Guangdong-Hong Kong-Macao Greater Bay Area and continue to improve trade digitization, providing more growth drivers for trade.

To conclude, we face a challenging situation this year but have strong confidence. We will fully implement the guiding principles of the 20th CPC National Congress and make efforts to stabilize trade volume and improve trade structure. At the same time, we will hear the opinions and demands of business entities and formulate targeted policies and measures to enable better development of enterprises on the international market. Thank you. 

Hong Kong Commercial Daily:

Statistics from China and the U.S. have shown that the bilateral trade in goods in 2022 hit a record high. However, the U.S. recently rolled out measures to crack down on China-related enterprises and products, drawing wide attention from all parties. How does MOFCOM see the future development of China-U.S. economic and trade ties? Thank you. 

Wang Shouwen:

Thank you for your question. Apart from the impact of the COVID-19 pandemic, unilateral protectionism measures by the U.S. have also taken a toll on China-U.S. trade ties in past two years. Nevertheless, the China-U.S. trade volume has hit a record high. Statistics from China suggest that the bilateral trade volume was over $750 billion last year, demonstrating that China-U.S. trade ties are highly complementary and resilient enough to resist pressure. 

Over the past three years, U.S. agricultural products exported to China as a share of U.S. total export volume have steadily increased, approaching one-fifth in 2022. Thus, China has become the largest export market of U.S. agricultural products. Each year, the U.S. receives a revenue of $15 billion from exporting intellectual property services to China. Therefore, the China-U.S. trade relationship is quite complementary and resilient. 

However, their ties' complementarity and resilience have not been fully leveraged. In 2022, the growth rate of China's global exports was 6 percentage points higher than that of China's exports to the U.S., while the growth rate of U.S. global exports was 16 percentage points higher than that of U.S. exports to China. The volume of China-U.S. trade indeed increased to a record high, but the growth was not fast due to the undeveloped potential. As you mentioned, the U.S. has taken restrictive measures in China-U.S. trade, which hindered the bilateral trade ties, decreased the comparative advantages of the U.S. and the competitiveness of its products, and damaged the confidence and willingness of the two countries' enterprises to enhance cooperation. Is the U.S. a reliable cooperation partner and source of product supply for Chinese enterprises? Measures taken by the U.S. not only harmed its own interests but also violated WTO rules. The U.S. has imposed Section 301 tariffs on Chinese goods for over four years. The WTO ruled that Section 301 tariffs do not comply with WTO rules. Under the pretext of protecting national security, the U.S. added some Chinese enterprises to its export control list. That was an abuse of the concept of national security and a violation of WTO rules. China has sued the U.S. in the WTO. 

Going forward, given China-U.S. trade ties have the huge potential to grow and are highly complementary, we should maximize mutual benefit and win-win cooperation in terms of bilateral trade and economy. A report by the U.S.-China Business Council suggests that U.S. exports to China provided 1 million jobs in the U.S. Meanwhile, Chinese exports to the U.S. helped bring down inflation in the U.S., benefit U.S. consumers, and increase the competitive advantages of U.S. enterprises. In the future, we will further strengthen China-U.S. trade and economic cooperation based on mutual benefit and win-win results. 

In November 2022, President Xi Jinping met with U.S. President Biden in Bali, Indonesia. The leaders of the two countries agreed that their teams should conduct coordination and dialogues on economic and trade ties. China stands ready to work with the U.S. to implement the consensus reached by the two countries' leaders. The two sides shall exchange honest views, coordinate with each other, and communicate about lifting bilateral trade and investment restrictions according to the principles of mutual respect, peaceful coexistence and win-win cooperation, abiding by WTO rules and the rules of the market economy and free trade. We call for a stable and reliable China-U.S. trade and economic environment to boost confidence for cooperation between enterprises of the two countries. I believe that China-U.S. trade and economic cooperation will reach new levels. 

The U.S. will host APEC meetings this year. The U.S. and China can take this opportunity to hold bilateral, regional and multilateral talks. This will enable them to address the concerns of both sides in the trade and economic sectors. Thank you. 

Yicai:

The fast development of digital trade in recent years has initiated reforms in traditional trade forms and rules, becoming a new engine driving economic growth. What measures will MOFCOM take to advance digital trade development? Thank you. 

Wang Wentao:

I will answer your question. Currently, a new round of technological revolution and industrial transformation is advancing, and the boom of the global digital economy has given rise to digital trade characterized by digital ordering and delivery, with data as a key factor of production, and with digital services as its core. This is also a new trend in international trade. Some even say it will be a new engine for future trade growth. All kinds of trade negotiations now involve digital trade, and hence digital trade deserves close attention at present and in the future. 

China's digital trade has seen rapid growth in recent years. For example, about 2.5 trillion yuan of trade in services was achieved via digital means in 2022, a 78.6% increase compared with five years ago. As I mentioned earlier, cross-border e-commerce has also been thriving. Last year, the foreign trade volume of China's cross-border e-commerce reached 2.1 trillion yuan, a 30.2% increase compared with two years ago. The 20th CPC National Congress articulated the goal of accelerating China's transformation into a high-quality trader in three aspects, namely, trade in goods, trade in services, and digital trade. This has elevated the importance of digital trade to a new level. China has the world's largest number of internet users and relatively abundant data resources. Meanwhile, encouraging progress has been made as we have created several application scenarios. These have laid a solid foundation for us to develop digital trade. In other words, China's digital trade growth has a solid foundation, promising prospects, and ample potential. Looking ahead, we will seize the opportunity of digital trade development and accelerate its growth by focusing on the following four aspects:

First, we will strengthen top-level design concerning digital trade. Policy documents on promoting the opening-up and innovative development of digital trade are being drafted. In other words, we will issue policies at the national level to boost digital trade.

Second, we will enhance the development of digital trade platforms. We will implement measures to support the innovative development of national digital service export bases and enhance their strength, quality and size. We will also develop leading companies in digital trade, ensure the success of the Global Digital Trade Expo, and make steady progress in the construction of digital trade demonstration zones. Expos, demonstration zones, leading companies, and export bases are the means we need to develop digital trade.

Third, we will foster new business forms and digital trade models. We will proactively support the trade of digital products and continuously improve trade in digital services. We will also steadily promote the trade of digital technologies and proactively explore trade in data. We will intensify our efforts to use digital technologies to empower trade activities from start to finish and improve trade digitalization. Silk Road e-commerce is another way to build cooperation overseas, and it has proven popular in many countries. We will proactively develop Silk Road e-commerce and promote the sustained development of cross-border e-commerce.

Fourth, we will establish and improve governance systems for digital trade. We will step up the formulation of basic institutional arrangements and standardized systems for data resource property rights, transaction circulation, cross-border transmission, and security and protection. Digital trade has been involved in many high-standard international economic and trade pacts, such as the DEPA and the CPTPP. We will proactively promote the process of joining DEPA and CPTPP and constructively participate in formulating and negotiating international rules and standards. Digital trade is thriving, and many rules are yet to be determined. As a country with abundant digital resources and a vast digital economy, China is bound to be a key player in digital trade. We will proactively participate in formulating rules for digital trade, offer more Chinese solutions, and contribute more Chinese ideas to the sector. Thank you.

Hong Kong Economic Herald:

In recent years, with the development of network information and digital technology, the global division of production in the service sector has accelerated, placing higher demands on countries to open up their service sectors. How will MOFCOM continue to promote the opening-up of China's service sector?

Chen Chunjiang:

Thank you for your question. The service sector is a major part of the Chinese economy, accounting for more than 50% of China's GDP. The further opening-up of the service sector will enable the introduction of various high-quality production factors and help construct a modern industrial system to serve the new development pattern and pursue high-quality development. The 20th CPC National Congress proposed building a new system of efficient and high-quality services and promoting more integration of modern services with advanced manufacturing and modern agriculture. The Central Economic Work Conference proposed increasing the level of opening-up in the modern service industry. In accordance with the decisions and plans of the CPC Central Committee and the State Council, we will actively pursue the high-level opening-up of the service sector, improve the institutional environment, stimulate market vitality, and better meet the needs of daily work and life. This year, we plan to focus on three aspects of work.

First, we will ease market access for the service sector. Since 2017, China has revised the negative list for foreign investment five consecutive times, canceling or relaxing foreign equity caps in value-added telecommunications services, securities, banking, insurance, cultural performances, and other services. In the future, we will proactively align with high-standard international economic and trade rules, and study further measures to cancel or ease restrictions on foreign investment in the service sector for industries with large domestic market demand, strong industrial driving effects, sufficient foreign investment willingness, and controllable risks. We aim to attract more global high-end service companies and elements to enter the domestic market.

Second, we will promote the institutional opening-up of the service sector. We will fully leverage the leading role of FTZs and ports and take the lead in standardizing domestic laws and regulations that affect the free and convenient trade of services at the Hainan Free Trade Port, achieving internal and external consistency in terms of both allowing firms in and letting them do business. We will roll out a series of measures to open up the service sector, earnestly implement the negative list for cross-border trade in services at the Hainan Free Trade Port, and issue a national version and a pilot free trade zone version of the negative list for cross-border trade in services to improve the level of liberalization and facilitation of trade in services. We will steadily enhance the construction of comprehensive pilots and demonstrations for the expansion and opening-up of the service sector. We will drive forward the issuance of plans to deepen the development of a national integrated demonstration zone for greater openness in the services sector in Beijing. Moreover, we will adjust supporting laws and regulations in newly added pilot areas, encourage pilot and demonstration areas to explore experiences that can be replicated and promoted based on their development positioning, and leverage the guiding role.

Third, we will accelerate innovation and the development of trade in services. Mr. Wang Wentao already said that we would promote the introduction of guiding opinions on the opening-up and innovative development of trade in services. We will do a good job of reviewing and concluding the pilot project of comprehensively deepening innovation and developing trade in services. On this basis, we will upgrade to build national demonstration zones for the innovative development of trade in services. We will formulate management measures for exporting bases providing characteristic services, establish service outsourcing demonstration cities with high standards, and support the fast development of new models and formats of service outsourcing, such as crowdsourcing and crowd innovation, cloud outsourcing, and platform subcontracting. We will support building international trade services cooperation zones where conditions permit and pursue the high-standard development of Belt and Road cooperation in the service sector. Thank you.

Xing Huina:

Today's press conference is hereby concluded. Thank you to the three speakers and all our friends in the media. Goodbye.

Translated and edited by Zhang Liying, Zhou Jing, Lin Liyao, Qin Qi, Ma Yujia, Liu Caiyi, Xu Xiaoxuan, Duan Yaying, Xu Kailin, Liu Jianing, Zhu Bochen, Yan Bin, Wang Qian, Zhang Rui, Liu Sitong, Zhang Junmian, Huang Shan, He Shan, Li Huiru, Yang Xi, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Ms. Wang Xiaoping, minister of human resources and social security

Mr. Li Zhong, vice minister of human resources and social security

Mr. Yu Jiadong, vice minister of human resources and social security

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 2, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the seventh briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we are joined by Ms. Wang Xiaoping, minister of human resources and social security. Ms. Wang will brief you on the situation concerning employment and social security, and take your questions. Also joining us are two vice ministers of human resources and social security, Mr. Li Zhong and Mr. Yu Jiadong.

Now, I'll give the floor to Ms. Wang for a brief introduction.

Wang Xiaoping:

Friends from the media, ladies and gentlemen, good morning. I'd like to thank you for your long-term efforts in communicating social conditions, public opinions and beneficial policies in a sincere and responsible manner. We also appreciate your support for the work involving human resources and social security. At today's press conference, my colleagues and I will exchange ideas with you on the efforts concerning employment and social security.

Employment and social security issues concern the lives of all families. Since the 18th National Congress of the Communist Party of China (CPC), the CPC Central Committee with Comrade Xi Jinping at its core has taken improving people's wellbeing as the ultimate goal of socioeconomic development. It has acted on the people-centered development philosophy, and specified an approach to improving people's wellbeing, namely ensuring basic needs, prioritizing key areas, improving institutional arrangements, and guiding public expectations. A series of major decisions and plans have been made regarding employment and social security, and the employment-first strategy has been implemented. This has ensured our social security work in better helping those most in need, building a tightly woven safety net, and establishing the necessary institutions. As a result, historic achievements have been made, and people's sense of gain, happiness and security has become more sufficient, better-protected and sustainable.

In the past decade, the proactive employment policy system with Chinese characteristics has been consistently enriched and developed; the pro-employment mechanism has been constantly improved; and a working pattern has been formed featuring autonomous jobseekers, adjustable market mechanisms, and government support for employment and entrepreneurship. Relatively sufficient employment has been achieved in China, a developing country home to over 1.4 billion people. The central government has made employment a priority in its endeavor to ensure stability on six key fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations) and maintain security in six key areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots government). As a result, employment-first policies and related supporting measures continue to be strengthened; business startups are boosting employment to greater effect; and the employment service system continues to be improved. The number of jobs in urban areas has risen significantly. The number of newly created jobs in urban areas averaged 13 million per year. The employment situation among key groups, such as college graduates, migrant workers and people having difficulty securing employment, was stable. The number of migrant workers who have shaken off poverty remained above 30 million. In addition, the employment structure continues to be optimized. The employment pattern in urban and rural areas has seen a historic change. Over 60% of employees worked in urban areas, and 48% of employees worked in tertiary industries. Flexible employment and other new forms in this regard have developed in a well-regulated manner and become a new growth driver for jobs. It is fair to say that the quality of employment has been steadily improved; workers' vocational skills continue to be enhanced; employees' income has seen stable growth; and their rights and interests have been effectively protected.

In the past decade, the construction of China's social security system has entered a phase of rapid development, and a fully functional social security system with distinctive Chinese features that covers the largest population in the world has been established. China's social security system has seen the most intensive reform efforts and the fastest development during this period. The central government has formulated and implemented the overall plan to reform and improve the basic old-age insurance scheme. It has realized national unified management for basic old-age insurance funds for enterprise employees. It has created a unified national basic old-age insurance system for both urban and rural residents. It has also brought government office and public institution pension schemes into line with enterprise schemes. These have further improved the nation's multi-level and multi-pillar endowment insurance system. The insurance system for unemployment and work-related injuries has been enhanced. China has worked further to ensure that everyone has access to social security. A total of 1.05 billion people have been covered by basic old-age insurance, 224 million by unemployment insurance, and 290 million by work-related injury insurance. Social security funds have also seen stable operation with their management continuously strengthened. In 2022, the revenue and expenditure of the three social security funds totaled 13.7 trillion yuan, and social security-related payments were made on time and in full. A five-level social security management and service network has been basically established. We continue to expand the application scope of social security cards, and related management and services have become well-regulated, standardized and IT-oriented. As a result, a social security system aimed at full coverage, ensuring basic needs, developing multi-level services and achieving sustainability has been strengthened in an all-round way. The basic lives and diverse needs of the people have been guaranteed in a more reliable manner.

The report to the 20th CPC National Congress put forward the mission and tasks to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. Aiming to improve people's well-being and raise their quality of life, it emphasized that employment is the most basic component of the people's well-being and that the social security system provides a safety net for people's livelihoods and helps ensure social stability. In the context of implementing the employment-first strategy and improving the social security system, it made special deployments and defined goals, requirements and tasks. Human resources and social security authorities at all levels across the country will uphold the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in order to properly understand the connotations and requirements of the mission to advance the Chinese path to modernization. We will thoroughly study and understand General Secretary Xi Jinping's important expositions on the work related to employment and social security. We will prioritize implementing an employment-first strategy to promote high-quality and full employment. We will also carry out in-depth social security system reforms to build a sound, sustainable and multi-tiered social security system that covers the entire population in both urban and rural areas and performs in a fair, integrated, reliable and well-regulated way. We will unswervingly implement the new deployments and requirements of the 20th CPC National Congress on the work related to employment and social security through concrete actions.

This year marks the first year to fully implement the guiding principles of the 20th CPC National Congress. The Central Economic Work Conference has clearly listed the major tasks for the year. We will earnestly implement the decisions and arrangements of the CPC Central Committee and the State Council to ensure the implementation of all tasks, ensure overall stable employment, and promote the high-quality and sustainable development of social security. With such efforts, we will strive to get the work on employment and social security off to a good start.

Next, my colleagues and I would like to exchange ideas with you. Thank you.

Shou Xiaoli:

Thank you for your introduction, Ms. Wang. Next, the floor is open to questions. Please identify the media outlet you represent before raising questions.

Cnr.cn:

The report to the 20th CPC National Congress emphasized that we should implement the employment-first strategy, intensify efforts to implement the employment-first policy, and improve related mechanisms to promote high-quality and full employment. What measures will the ministry take to ensure implementation? Thank you.

Wang Xiaoping:

Thank you for your question. I'd like to answer it. Employment plays a basic and fundamental role in improving people's well-being and also serves as an essential condition and an important goal of economic and social development. The CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to employment, always prioritized employment in pursuing economic and social development, and made various major decisions and arrangements to provide fundamental guarantees for stable employment. The report to the 20th CPC National Congress clearly proposed that we should implement the employment-first strategy and intensify efforts to implement the employment-first policy, which is the "double firsts" concept. It emphasized that employment is the most basic component of the people's well-being, scientifically set the important goal of high-quality and full employment, and put forward a series of important measures. The Central Economic Work Conference emphasized the major decision and deployments for stabilizing growth, employment and prices, deepening our recognition of the mission and responsibility for ensuring employment, and also defining the right direction and providing the fundamental guiding principle for the work to guarantee employment on the new journey. 

I think improving mechanisms and fulfilling responsibilities are key to ensuring full implementation. We will resolutely implement the decisions and deployments made by the Party Central Committee and the State Council, take stabilizing employment as a major political responsibility and the most prioritized work, and further promote the coordination and cooperation among all localities and governmental departments. The key to ensuring full implementation also lies in understanding new requirements and providing the solid effect of the employment-first concept. We should constantly expand employment capacity and improve its quality, ensuring that people are satisfied with their jobs and professions to maintain the overall stability of employment. Specifically, we will adhere to the following five aspects:

First, we will adhere to a target-oriented approach, focusing on the strategic role of employment. We will concentrate on the new target of promoting high-quality and full employment. We will also improve the evaluation system and supporting measures, ensuring more adequate employment opportunities, a more reasonable employment structure, a more equal employment environment, increasingly strengthened employment capability, and a steadily improved security level. We will aim to achieve a sound cycle of both economic growth and higher-quality and expanded employment.

Second, we will adopt a systematic method and uphold the employment-first policy. The macro regulation mechanism aiming to prioritize employment will be improved faster. We will make stepped-up efforts to establish a mechanism to evaluate the impacts that major investments, major policies, and the distribution of major productive forces may have on employment. Moreover, we will intensify our support to industries and enterprises that can provide more jobs. 

Third, we will consider worst-case scenarios and provide more employment support for key groups. We will establish a management mechanism that records the employment status of certain groups, including young people, especially university graduates; migrant workers, especially those who were lifted out of poverty; and unemployed individuals, especially those who face difficulties. By doing so, we will offer help to people in need according to the record, and refine our systems for ensuring people's basic living needs and for providing employment assistance. 

Fourth, we will adopt a problem-oriented approach and eliminate institutional barriers that hinder the flow of labor resources. We will improve the public service system for employment and make greater efforts to improve the market-, standard-, and system-based human resources development. We will refine the information monitoring mechanism to ensure that the labor in urban and rural areas can flow orderly and efficiently. We will also improve the policy system to ensure equal employment opportunities and eliminate unjustified restrictions that undermine equal employment. In this way, we will ensure that everyone has the opportunity to pursue a career through hard work.

Fifth, we are committed to improving relevant systems to create a predictable environment that stabilizes employment. We will improve the system for creating jobs by encouraging business startups and ensuring more people are willing to start and able to start their own businesses. We will improve the system of lifelong vocational training, launching special training programs in key areas to tackle structural unemployment. We will improve the systems for safeguarding workers' rights and interests to protect workers' legitimate rights. Thank you. 

China News Service:

Migrant workers have started returning to their posts and resuming production since the Spring Festival. Meanwhile, enterprises are also hiring employees. Could you please share more information in this regard? Thank you. 

Wang Xiaoping:

This is a good question. It is about the employment situation this year. Given the slowing economic growth rate, the COVID-19 pandemic, and the complex and volatile external environment in 2022, the CPC Central Committee and the State Council have taken decisive and effective measures. Local governments and relevant departments have resolutely shouldered the responsibility to stabilize and ensure employment. They rose to the challenge and forged ahead with resolve. As a result, the overall employment situation has remained stable. A total of 12.06 million new urban jobs were created, and the employment of key groups was stable. Moreover, some 32.78 million people lifted out of poverty found jobs, an increase from the level of the previous year. 

As the performance of the Chinese economy improves, employment will rebound this year so that the overall situation will remain stable. This is due to important factors as follows. The CPC Central Committee has attached great importance to employment, and the 20th CPC National Congress made a series of important deployments to ensure employment. These policies have served as guiding principles to ensure high-quality and full employment. The Chinese economy enjoys strong resilience, tremendous potential and great vitality. The fundamentals sustaining its long-term growth have remained strong. These have created favorable conditions to maintain employment stability in the long run. Moreover, innovation and entrepreneurship continue to provide new jobs, serving as a driving force to promote employment. The policies of stabilizing and ensuring employment will continue to be implemented, and the policies of reducing burdens, stabilizing jobs and increasing employment will be adjusted and improved. Skills training and activities to promote employment will also be held. These aspects will thereby ensure and expand employment. Thanks to all these efforts, we have the confidence and determination to ensure employment.

Nevertheless, we must understand that employment pressure will continue to exist regarding its total number. The number of college graduates will hit 11.58 million in 2023, while structural issues surrounding difficulty in hiring and finding jobs remain serious. Moreover, the challenge of hiring general workers and the shortage of technical workers persist. We will actively solve the most pressing difficulties of deep concern to the people regarding their employment, such as more job opportunities, more reasonable work remuneration, and more reliable social insurance. 

Just as you mentioned, the period following the Spring Festival sees a significant flow of workers, and businesses and enterprises usually resume their production after the holiday. This is, therefore, a crucial time for us to step up efforts to ensure employment. We have worked with relevant departments to launch the "Spring Breeze Action" initiative, offering people employment opportunities by holding job fairs online and offline nationwide. In this way, both ends of labor transfer will cooperate closer, facilitating migrant workers to find jobs, especially those lifted out of poverty.

The job market has been stable and progressing steadily in the first two months of this year, which is better than expected. Compared with previous years, it has three notable features. First, the laborers left for work early. On the first day of the Chinese Lunar New Year, some migrant workers already left their hometowns for work, hoping to resume their posts early. Second, companies have started their recruitment efforts earlier than in previous years. Many enterprises initiated employment negotiations before the Spring Festival holiday, with tailormade workforce being arranged right after the holiday, hoping to begin work and production as soon as possible. Third, recruitment activities have been busy. Job fairs across the country have been bustling with crowds, and there has been a significant increase in job seekers. As of the end of February, 46,000 recruitment service activities have been held, and 32 million job positions have been posted, indicating a promising start for China's employment situation this year.

Moving forward, we will prioritize stabilizing employment and view it as a primary political task. We will fully implement various measures to stabilize the job market, including stabilizing existing employments, expanding new job opportunities, improving quality, and ensuring basic employment needs. Our efforts to stabilize employment will be unwavering. We will strengthen support for enterprises to overcome difficulties and provide targeted assistance to the service sector, small- and micro-sized enterprises, and self-employed businesses, all with large employment capacities, to stabilize and expand their workforce. We will ensure our employment policies are targeted and implemented efficiently to benefit those enterprises directly. We will strengthen support for innovation and entrepreneurship and encourage business startups among key groups. We will also create a better market environment for casual laborers and fully implement our policies to protect the rights and interests of laborers engaging in new kinds of jobs. We will strengthen our efforts to provide targeted policies, expand market-based employment avenues while stabilizing the scale of job positions in the public sector, and ensure young people including college graduates can find jobs or start their own businesses. We will support people in rural areas to find jobs outside their hometowns or in nearby places so as to stabilize employment for rural workers including those lifted out of poverty. We will assist job seekers and provide a subsistence allowance for those in need, ensuring that their basic living needs are met. We will increase quality and efficiency in improving the public service system for employment and organize professional training programs in large scale to balance supply and demand in the job market. We will also strengthen comprehensive job market regulation to protect laborers' lawful rights and interests.

In summary, we have confidence in achieving our employment targets for the year and maintaining a stable job market.

CCTV:

The more than 1.3 billion social security cards issued in China have been playing an increasingly crucial role. Are there any recent updates regarding social security cards that you would like to share with us? Additionally, what steps will your ministry take to improve the work in this area?

Wang Xiaoping:

Thanks for your questions. Vice minister Li Zhong, responsible for social security work, will answer them.

Li Zhong:

I appreciate your interest in our work. The social security card is an essential way for people to access public services related to their livelihoods. In recent years, we have been working with stakeholders to promote the development of a multi-functional, all-in-one card for various public services. We have been continuously enhancing its functions, and our progress can be observed in the following four aspects:

First, we have comprehensively integrated features related to human resources and social security. People can access a total of 95 services with their cards, including employment registration, professional training, social insurance payments, and pension withdrawals, providing convenient services for the public. 

Second, we have been exploring possible features related to people's livelihoods that can be incorporated into the social security card. Many regions in China have introduced government services, medical services, transportation, sightseeing, cultural experiences, and government subsidies for urban and rural residents. Currently, the physical social security card allows for trans-provincial settlement of medical bills in all prefecture-level regions across China. Nearly 70 prefecture-level regions allow for the settlement of medical services and medicine purchases through an electronic social security card. Nearly 200 prefecture-level regions use social security cards to grant urban and rural residents financial subsidies. In some regions, people can use the card to pay public transportation fees, borrow books from libraries, and enter parks and tourist attractions. The public have benefited from the integration of so many features.

Third, we have been coordinating the development of both physical and electronic versions of social security cards. While ensuring that physical cards are issued to the general public, we are also speeding up the introduction of electronic cards. More than 740 million Chinese people have obtained electronic cards, the online service enabled by which runs parallel to the offline service provided by physical cards and provides the public with enriched experiences of high-efficiency smart services.

Fourth, we have actively promoted the regional "all-in-one card" services. For example, we have promoted regional cooperative legislation in the three provinces and one directly administered municipality in the Yangtze River Delta and explored new methods to achieve the "same treatment in different cities" for public services. In Sichuan province and Chongqing municipality, we have realized over 30 cooperative services regarding human resources and social security based on social security cards. Moreover, by using social security cards as a carrier, we have built a regional book rental system, allowing people to use their social security cards to borrow and return books in both regions. Hainan and Guangdong provinces have jointly issued such "all-in-one cards," which combine a social security card with an annual travel card, realizing the "same treatment in different cities" for cross-provincial travel consumption and enabling the public in these two provinces to enjoy the benefits of the "all-in-one cards."

In the next step, we will take social security cards as the carrier and promote the "all-in-one cards" for residents to enjoy various services. We will attach more nationwide service applications to the "all-in-one cards" and strive to use more data to benefit people and make the cards more convenient for the public. Thanks.

21st Century Business Herald:

People from all walks of life are concerned about pensions. What is the general situation of basic old-age insurance funds for enterprise employees? Thank you.

Wang Xiaoping:

Pensions, involving the vital interests of hundreds of millions of retirees, have attracted wide attention from the public. In recent years, the reform of the pension insurance system has steadily advanced. Its coverage keeps expanding, and the revenue of the insurance funds continues to increase. The system is running smoothly on the whole, and has a strong ability to guarantee payments. This can be seen in the following four aspects. First, the balance between revenue and expenditure has been maintained. The annual revenue and expenditure of basic old-age insurance funds for enterprise employees are basically balanced, and the funds have been operating smoothly in general. Second, the funds have been well regulated. In order to solve the structural problem of uneven fund distribution, and based on the central regulation system for basic old-age insurance funds, a national coordination system was launched last year to regulate funds nationwide with stronger efforts. Third, there has been financial input. Central government financial subsidies continue to increase, and local financial departments have established a long-term investment mechanism to increase their input. Fourth, there are long-term reserves. National social security funds continue to expand, and the transfer of part of state-owned capital to the social security funds has been completed. These two funds are long-term reserves for the source of pension payments. So, it's clear that China's old-age insurance funds are stable. Thank you.

Radio Television Hong Kong (RTHK):

With the mainland experiencing negative population growth for the first time in 60 years, are you concerned about its potential impact on China's future economic growth? Thank you.

Yu Jiadong:

You mentioned the problem of population decline. From an employment perspective, this relates to its impact on the labor force supply. According to the National Bureau of Statistics, China's working-age population between the ages of 16 and 59 declined to 876 million at the end of last year, down from a peak of 920 million. The decline in the labor force occurred amid an overall abundant supply, and China remains a developing country with the world's largest population and labor force. In terms of the labor structure, the decline is mainly because older workers are withdrawing from the labor market, and their number has declined rapidly. In contrast, the young labor force has increased steadily. It is estimated that 16.62 million young people will enter the job market in urban areas this year, reaching a new high in recent years. And the pressure on total employment is still high.

In the next step, we will continue to implement the employment-first policy, strengthen economic development in an employment-oriented way, expand employment capacity, alleviate structural problems in employment, strive to improve the quality of employment, and achieve full and high-quality employment to facilitate sound economic development. Thank you.

Cover News:

The private pension mechanism has been officially implemented in some pilot areas. I want to ask, how is this work progressing? Thank you.

Li Zhong:

I appreciate your concern about the issue of private pensions, which is a significant concern for all. The media have given much attention to the issue. Last year, we held a press conference on private pensions in this briefing hall, introducing the upcoming private pension mechanism. It's my pleasure to take this opportunity to share more information with you all since it has been ongoing for a while. 

A private pension mechanism is a supplementary endowment insurance program supported by government policies, voluntarily participated in by individuals, and operated in a market-oriented manner. It is an important institutional arrangement of a multi-tiered endowment insurance system. Our multi-tiered endowment insurance system consists of three levels, commonly called "three pillars." The first pillar is basic endowment insurance; the second is enterprise annuity and occupational annuity; the third is private pensions, including other personal commercial pension services. Both the second and third pillars have served as effective supplementary pension programs to the first.

Last year, China took the symbolic move to officially launch the private pension mechanism, which marked the multi-tiered and multi-pillared endowment insurance system taking shape. The construction of the private pension mechanism has demonstrated the following characteristics.

First, preferential policies provide support. At present, these policies have mainly manifested in three stages. At the payment stage, the payment amount will be deducted before personal income tax. Meanwhile, investment income is not taxed and is taxed at a lower tax rate of 3% when received. Moreover, the upper limit of the annual contribution is 12,000 yuan, which will be adjusted in due course.

Second, there is a variety of products to choose from. Relevant regulatory authorities have approved 137 public funds, 19 commercial pension insurances, 18 wealth management products, 465 savings deposit products, and other personal pension investment products following safety norms and the requirements of focusing on long-term preservation and appreciation. Participants can choose products based on their own investment preferences. With the system's expansion, investment products will become even more diverse.

Third, the services are more convenient. The Ministry of Human Resources and Social Security has led the creation of a private pension information service platform. Each participant on the platform has an individual account with multiple functions, including information recording, inquiry and other services. Through this, they can intuitively observe the condition of their private pension. Participants can access this information service platform directly through many channels, such as the national social insurance public service platform and electronic social security card. They can also open accounts, pay fees and purchase financial products through commercial banks.

At the end of last year, a total of 36 pilot cities and regions introduced the private pension mechanism. Thanks to the concerted efforts of all parties and the active participation of the public, 28.17 million people participated in the project within three months of its implementation.

The private pension system is a brand-new system. In the next step, we will follow the requirements made in the previous year, work with relevant departments to further promote and elaborate policies, sum up experience, improve relevant policies, and accelerate the implementation of the system in an active yet stable manner. 

The Paper.cn:

The report to the 20th CPC National Congress pointed out that we will further improve the multi-tiered social security system that covers the entire population in urban and rural areas and see that it is fair, unified, reliable, well-regulated, and sustainable. I want to ask, what measures will be taken to improve the construction of the social security system? Thank you. 

Wang Xiaoping:

Thank you for your question. The social security system provides a safety net for people's livelihoods and helps ensure social stability. Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has placed greater emphasis on developing the social security network. The committee has strengthened top-level design, continued to deepen reforms and rolled out a series of significant and crucial reform measures. For instance, we have established a unified basic pension insurance scheme for rural and non-working urban residents and brought government office and public institution pension schemes into line with enterprise schemes. The social security system has undergone continuous improvement in terms of its uniformity and standardization. The government launched a nationwide program for the unified management and adjustment of pension insurance funds for urban workers, and the functions of mutual assistance and redistribution were further strengthened. The enterprise annuity and personal pension systems were put in place, and the framework of a multi-level pension insurance system was established. In addition, occupational injury insurance trials have been conducted, and the government is actively exploring expanding insurance coverage for employees in new business forms. The government is also promoting building a "three-in-one" system of work-related injury insurance, which encompasses prevention, compensation, and rehabilitation, and further highlighting the functions of unemployment insurance to protect life, prevent unemployment and promote employment. The systematic, integral, and synergistic nature of the reform has been strengthened, providing people with corresponding institutional guarantees against risks such as old age, unemployment, work-related injuries, and poverty.

The report to the 20th CPC National Congress emphasized the need to further improve the multi-tiered social security system that covers the entire population in urban and rural areas and see that it is fair, unified, reliable, well-regulated, and sustainable. This fully reflects the deep understanding of the CPC Central Committee with Comrade Xi Jinping at its core on the developmental laws of social security in the new era and provides us with a fundamental guideline. We will focus closely on meeting these requirements and implementing them earnestly. There are several key tasks, which can be summarized as "one expansion," "two improvements," and "three upgrades."

"One expansion" refers to expanding the coverage of social insurance programs. Specifically, it involves further implementing full coverage of social insurance and expanding coverage precisely based on the characteristics of key groups, such as employees working in new forms of business and migrant workers, through the implementation of classified policies. We need to improve insurance policies for workers in flexible employment at their place of employment and encourage more workers in flexible employment to participate in the basic old-age insurance funds for employees. Additionally, we need to steadily implement trials of occupational injury insurance for people in new forms of employment.

"Two improvements" refer to two areas of improvement. The first area is to improve the multi-level pension insurance system. This involves deepening the reform of basic pension schemes, exploring measures to expand the coverage of enterprise annuities, actively and steadily implementing the personal pension system, and meeting the diverse pension needs of the people. The second area is to improve the adjustment mechanism for social insurance benefits, allowing people to better share the benefits of economic and social development.

"Three upgrades" refer to three areas that need to be improved. The first upgrade is to enhance the level of unified management. This includes promoting the unified national management of enterprise pension insurance, increasing fund adjustments, and promoting unified provincial-level management of unemployment and work-related injury insurance. The second upgrade is to strengthen the ability to supervise funds. This involves further strengthening the "four-in-one" risk prevention and control system for policy, operations, information, and supervision, organizing and launching special actions for fund management, and enhancing investment supervision. The third upgrade is to improve the quality of service. This means improving the unified national social insurance public service platform with the social insurance card as the carrier, establishing an all-in-one card system, and promoting the handling of more high-frequency matters through a single network and across provinces, aiming to minimize inconvenience for the public. Mr. Li Zhong has introduced the application of the all-in-one card in Sichuan, Chongqing, Hainan, Guangdong, and other places. The "three provinces and one city" (Jiangsu province, Anhui province, Zhejiang province, and Shanghai city) in the Yangtze River Delta region have developed coordinated legislation and compiled a list of items to clarify social security services. Cardholders can therefore enjoy corresponding benefits in social security, transportation, cultural tourism, employment, financial services, and other fields. Moreover, the innovative application of social security cards can be further expanded in various economic and social areas. These are valuable experiences that need to be summarized and promoted.

Next, we will prioritize the improvement of the social security system as a means of achieving common prosperity. This will lay a solid foundation to make people's well-being more secure while promoting the high-quality and sustainable development of social security. Thank you.

CRNTT:

The scale of China's college graduates continues to expand, reaching a record high again in 2023. How will you promote the employment of college graduates and other young people? Thank you.

Wang Xiaoping:

I would like to thank the reporter from Hong Kong for their interest in the employment of mainland college graduates. I would like to ask my colleague, Mr. Yu Jiadong, to give you an introduction.

Yu Jiadong:

College graduates are an invaluable human resources for any country. The CPC Central Committee and the State Council have always attached great importance to the employment of college graduates, introduced a series of policies and measures, and held special meetings every year to promote their implementation. Various regions, relevant departments and aspects of society have done a lot of work. As you said, the number of college graduates will reach 11.58 million in 2023. The task of promoting employment has become even more onerous. We will insist on placing the promotion of youth employment, especially for college graduates, in a more prominent position, as well as introduce stronger policies, expand positions, improve services, help those most in need, and work with relevant departments to do a good job. The focus is on four areas:

First, we will strengthen our efforts to expand channels. We will further improve the policies for supporting employment and entrepreneurship among graduates, launch special actions to provide policy services, expedite policy delivery, stabilize and expand recruitment in state-owned enterprises, stabilize recruitment at public institutions and grassroots projects, encourage graduates to seek employment in micro, small and medium-sized enterprises (MSMEs) as well as at the community level in urban and rural areas, and support independent entrepreneurship and flexible employment for graduates. At the same time, we will guide localities in adjusting and optimizing the scheduling of examinations including professional qualification examinations, to leave graduates more time to find jobs.

Second, we will strengthen our efforts to promote employment opportunities. We will continue to promote public employment services on campus, offering graduates job information, guidance, training, entrepreneurial support and other services. At the same time, we will launch a series of special service activities called "Vocation Leads to the Future," mobilize industry associations, social organizations and well-known enterprises to participate extensively, combine online and offline and push job opportunities on a large scale. We will launch more industry-specific recruitment to provide graduates with ample job information.

Third, we will strengthen internship training. We will continue to implement the plan to offer 1 million high-quality internship positions, launch a number of national internship demonstration units to improve the practical ability of graduates. In response to the career development needs of graduates, we will actively organize skills training, improve the quality of training, expand training for new occupations, and support graduates in attaining skilled employment.

Fourth, we will try to assist and support those in need. For graduates seeking employment, we will provide information in advance, keep records of our assistance and support work, smoothen various channels for help, and track graduates based on real-name-based services. Additionally, we will beef up support to graduates from families living in poverty, families living on subsistence allowance, zero-employment families, and those facing other difficulties such as disabilities by offering them services and job recommendations. We will promptly integrate unemployed young people into employment and unemployment management services. We will also strengthen guidance and category-based assistance for people who are long-term unemployed to help them better enter the job market. 

In a nutshell, we will work tirelessly to help college graduates and other young people find steady employment. Thank you. 

Shou Xiaoli:

Due to the time limit, we will have one last question. 

Hong Kong Bauhinia Magazine:

Enhancing vocational training and cultivating more skilled workers are essential to easing recruitment and employment difficulties. What measures will the MOHRSS take in this regard? Thank you. 

Wang Xiaoping:

This is a good question. Improving vocational skills is the key solution for addressing the dual problems of enterprises' difficulty in recruitment and workers' difficulty in finding employment. This also serves multiple purposes, as improving workers' vocational skills is conducive to promoting the transition from a demographic dividend into a human resources dividend. It also empowers more ordinary workers to join the middle-income group through hard work. 

The report to the 20th CPC National Congress emphasized improving the system of lifelong vocational training and tackling structural unemployment . Last year, the General Office of the CPC Central Committee and the General Office of the State Council issued guidelines on strengthening the cultivation of highly-skilled workers, which we will earnestly implement. To enhance vocational training, we will stabilize the scale, take care of the whole process, focus on key areas, improve the system, boost effectiveness, and roll out incentivizing measures.

As for stabilizing the scale, we will continue to organize large-scale vocational training. The three-year campaign for upgrading vocational skills has provided more than 83 million subsidized training opportunities. During the 14th Five-Year Plan period (2021-2025), we will offer more than 75 million government-subsidized training opportunities for all urban and rural workers. 

As part of taking care of the whole process, we will launch extensive multi-tiered vocational training for workers across stages from study to work. We will organize pre-employment training for new entrants to the workforce, on-the-job training for enterprise employees, and training for the unemployed to help them find new jobs. In this way, we will improve workers' ability to apply for and choose a job, stabilize their employment, and secure their reemployment. 

To focus on key areas, we will boost China's strength in manufacturing, product quality, cyberspace, and digital development . We will intensify the cultivation of skilled workers in key areas. We will thoroughly carry out programs to strengthen skills in the manufacturing sector and expand the workforce of skilled personnel. We will concentrate on key groups, including college graduates, rural migrant workers, and people who have difficulty finding employment, and offer a range of vocational training programs. We will center on scaling up assistance to certain regions in pursuing rural revitalization and arrange training for rural workers, especially those lifted out of poverty, to help them move into non-agricultural jobs.

Improving the system means improving the vocational skill training system, increasing the supply of training, and enhancing a joint and shared training mechanism. We will promote a diversified training pattern combining government-subsidized, enterprise-initiated, and market-oriented training. We will vigorously develop vocational education, skilled worker education, and the construction of public training bases. In addition, we will comprehensively promote a training model of integrating work and study to build skills.

Boosting effectiveness means improving the quality of training effectively. We should respond to workers' diverse and differentiated needs to promote employment and entrepreneurship. We should adapt to industrial transformation, upgrading, and technological advancements and adjust training content promptly. We should direct training resources to focus on areas that are urgently needed by the market and crucial for enterprise production. Additionally, we should strengthen standardized management, fund supervision, and service guarantees for training.

Incentivizing and driving involve encouraging and guiding workers to love and devote themselves to their skills, to become skilled talents, and serve the country with their abilities. We will vigorously promote the model worker work ethic, the spirit of labor, and quality workmanship, inspiring workers to strive for the new journey and adhere to the idea that labor creates value. We will encourage them to "do what they love and love what they do, specialize in their craft, and become skilled at their work." We will improve the evaluation and incentive mechanisms, implement the "New Eight-Grade Worker" vocational skills level system, and strengthen the skill-value incentive orientation regarding salary income distribution. Before this year's Spring Festival, I visited a plant of the Beijing North Vehicle Group, where I met with several vocational-skilled talents. Ma Xiaoguang is a guiding role model for many young people due to his growth experience. Born in 1980, Ma enrolled in the vehicle plant's vocational education school at 15. After graduation, he started as an apprentice and made significant technological breakthroughs, such as CNC machine tools, while winning numerous invention awards. His skills and theoretical knowledge are highly regarded, and he has published many academic articles. Currently, he is the chief technician of the vehicle plant and a senior engineer in this field. He has two potential pathways for career advancement. According to plant management, his treatment is equivalent to that of a vice president. This type of career path plays an important role in developing and motivating skilled professionals. We will also improve the vocational skills competition system and drive job position training and skills competitions. Recently, the latest season of "Craftsmen of the Nation," produced by CCTV, showcased the inspiring stories and advanced skills of 10 individuals. I urge the reporters here to highlight the growth experiences of typical figures like them and promote their craftsmanship, spirit and values throughout society. This year, we will hold China's second Vocational Skills Competition in Tianjin, and we welcome everyone to follow the event closely. Thank you.

Shou Xiaoli:

Thank you, Ms. Wang Xiaoping, thank you to all the speakers, and thanks to all the journalists. Today's press conference has now concluded. Goodbye, everyone.

Translated and edited by Zhu Bochen, Zhou Jing, Gong Yingchun, Guo Yiming, Yan Xiaoqing, Qin Qi, Wang Yiming, Liu Caiyi, Xu Xiaoxuan, Wang Wei, Zhang Junmian, Liu Sitong, Yang Xi, Huang Shan, Li Huiru, He Shan, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Jin Zhuanglong, minister of industry and information technology 

Mr. Xin Guobin, vice minister of industry and information technology 

Mr. Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT)

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 1, 2023

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to the press conference held by the State Council Information Office (SCIO). This is the sixth press conference in the series "Embarking on the New journey — A Government Perspective." We have invited Mr. Jin Zhuanglong, minister of industry and information technology, to brief you on promoting new industrialization to bolster the real economy, and to take your questions. Also present at today's press conference are Mr. Xin Guobin, vice minister of industry and information technology, and Mr. Tian Yulong, chief engineer and spokesperson of the MIIT.

Now, let's give the floor to Mr. Jin Zhuanglong for his introduction.

Jin Zhuanglong:

Friends from the media, ladies and gentlemen, good afternoon. Thank you for your long-term interest in China's industrial development as well as your care and support for the MIIT. Today, my two colleagues and I will talk with you about implementing the major decisions and arrangements of the 20th CPC National Congress and promoting new industrialization to bolster the real economy.

The report to the 20th CPC National Congress draws a grand blueprint for comprehensively building a great modern socialist country and advancing the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. It states that China will basically achieve new industrialization by 2035. It also underlines that in pursuing economic growth, we must continue to focus on the real economy and that we will advance new industrialization and move faster to boost China's strength in manufacturing and cyberspace . Made by the CPC Central Committee with Comrade Xi Jinping at its core based on the overall development of the Party and state, the major strategic arrangement of advancing new industrialization is of great and profound significance. In my opinion, advancing new industrialization is a natural requirement for realizing a Chinese path to modernization, a fundamental support for comprehensively building a great modern socialist country, an urgent need to build up competitive edges as a major country, and a strategic choice to realize high-quality economic growth. 

Since the 18th CPC National Congress, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China's new industrialization has been developing at a markedly faster pace. I will brief you on this from five aspects:

First, the industrial system has been further improved. China boasts 41 major industrial categories, 207 intermediate industrial categories and 666 small industrial categories, being the only country in the world that has all the industrial categories in the United Nation's International Standard Industrial Classification of All Economic Activities . 

Second, the industrial scale has been further expanded. In 2022, the total value-added of industry exceeded the 40 trillion yuan mark, accounting for 33.2% of GDP. Therefore, we often say that industry serves as a ballast of macroeconomic performance. Specifically, the value-added of manufacturing made up 27.7% of GDP and the manufacturing scale has topped the world for 13 consecutive years. A total of 65 Chinese manufacturing enterprises made it onto the 2022 Fortune Global 500 list, and China now has more than 70,000 small- and medium-sized specialized and sophisticated enterprises that produce new and unique products. 

Third, the industrial structure has been constantly optimized. The high-tech manufacturing industry and equipment manufacturing industry accounted for 15.5% and 31.8% of the value-added of industries above designated size, respectively. The output of new-energy vehicles and photovoltaic power has topped the world for many years in a row. The transformation and upgrading of traditional industries has been accelerated, with marked progress being made in their digital and green transformations. A total of 45 national advanced manufacturing clusters have been fostered. 

Fourth, the digital economy has been growing at a faster pace. China's mobile communications have made leapfrog developments by following other countries in 2G, making breakthroughs in 3G, keeping pace with the rest of the world in 4G, and securing a leading position in 5G. Currently, China has built the world's largest mobile communications network with advanced technology. As of the end of 2022, China had built a total of 2.31 million 5G base stations. Thanks to this, all counties in China can now access 5G services and all villages can access broadband internet. Data centers in use nationwide now have more than 6.5 million standard racks, with the total computing power ranking second in the world. The numerical control rate of key processes and the penetration rate of R&D and design tools for digital transformation in key industrial enterprises reached 58.6% and 77%, respectively. In 2022, the income of the software industry exceeded 10 trillion yuan, and the industrial internet was applied in 45 major categories of the national economy, with the number of influential industrial internet platforms reaching 240.  

Fifth, a series of major advances has been secured in key areas. One achievement after another has been made in such fields as manned spaceflight, lunar and Martian exploration, and deep sea and deep earth probes . The first C919 large passenger airliner was delivered, the first self-developed F-class 50 megawatts heavy-duty gas turbine was ignited, and nuclear power units using Hualong One technology were connected to the grid and started operation.  

Currently, new industrialization also faces new situations in its development: a new round of scientific and technological revolution and industrial transformation has advanced by leaps and bounds, the global industrial structure and layout have undergone profound changes, and China is at a crucial juncture of moving from a big manufacturer to a strong manufacturer. We will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and thoroughly implement the guiding principles of the 20th CPC National Congress. We will act on the general principle of pursuing progress while ensuring stability, apply the new development philosophy, create a new development pattern, and promote high-quality development. We will coordinate development and security, make solid progress in advancing new industrialization, move faster to boost China's strength in manufacturing and cyberspace, and continuously lay a solid material and technological foundation for comprehensively building a great modern socialist country. This work will focus on six aspects:

First, we will promote the stable growth of the industrial economy. We will earnestly implement the policy package aimed at stabilizing the economy and the related follow-up measures. Our primary focus should be on stabilizing the growth of key industries, which contributes significantly to GDP. Meanwhile, we will also give better play to key areas and better leverage the anchor role of industries in stabilizing the macroeconomy.

Second, we will accelerate the modernization of the industrial system mainly through four aspects. Specifically, we need to transform and upgrade traditional industries because they account for a significant proportion of all industrial sectors. In addition, we need to cement the leading position of several competitive industries in China, develop emerging industries, and make forward-looking plans for future-oriented industries.

Third, we will enhance the resilience and security capacity of industrial and supply chains. We will work to shore up weak links, leverage advantages, and strengthen the development foundation. We will see that key industrial and supply chains are more self-sufficient and that their risks are better controlled while promoting the development of all industrial chains.

Fourth, we will improve the mechanism for industrial sci-tech innovation. The relations among science and technologies, industries, finance and innovation have become a common concern, and we need to strengthen collaboration in these aspects. We will promote breakthroughs in core technologies in key fields and comprehensively stimulate the drive for innovation and entrepreneurship. We will also build several innovation centers for the manufacturing sector, develop several advanced manufacturing clusters, and facilitate the in-depth integration among links concerning innovation, industrial development, capital and talents.

Fifth, we will focus on promoting high-end, intelligent, and green manufacturing. We will strengthen brand building as well as carry out smart manufacturing projects. We will also expedite the construction and application of new types of information infrastructure and promote the green and low-carbon development of industries proactively and steadily.

Sixth, we will comprehensively improve the competitiveness of enterprises. Enterprises are the main body of the market. We will support leading enterprises in improving development quality, nurture more specialized and sophisticated small- and medium-sized enterprises (SMEs) that produce new and unique products, and create a fine ecosystem where businesses of all sizes can pursue development through collaboration.

That concludes my brief introduction. Next, my colleagues and I will take your questions. Thank you.

Shou Xiaoli:

Thank you, Mr. Jin. Now the floor is open for questions. Please identify the media organization you work for before raising your questions.

China Daily:

The report to the 20th CPC National Congress proposed modernizing the industrial system, and the central economic work conference made further arrangements. Could you please elaborate on MIIT's plans and priorities for modernizing the industrial system? Thank you.

Jin Zhuanglong:

Thank you for your questions. The 20th CPC National Congress made comprehensive arrangements to modernize the industrial system, and General Secretary Xi Jinping also made important remarks on the issue at the Central Economic Work Conference held last December.

As we know, the manufacturing industry is the foundation of the real economy. It is also the lifeblood of the national economy and a crucial sector in constructing a modern industrial system. China has developed a large-scale and complete manufacturing system with strong competitiveness. We will stay committed to developing the real economy, especially the manufacturing industry, consolidate the advantage of our complete industrial system, and ensure that its share of the industrial sector remains generally stable. We will expedite efforts to modernize the industrial system by leveraging advantages, shoring weak links, and strengthening the development foundation. This endeavor will mainly focus on the following four aspects.

First, we will transform and upgrade traditional industries. As traditional industries are the foundation of a modernized industrial system and account for over 80% of China's industrial sector, we will ramp up efforts to support enterprises in accelerating technological transformation and upgrading equipment. We will also promote the adoption of advanced and applicable technologies, modernize techniques, and elevate product quality to meet higher-end standards. We will carry out a campaign In the manufacturing industry to increase the variety of products, improve quality, and build brands, in a bid to raise product quality and brand benefits. We will implement smart manufacturing projects, speed up the growth of service-oriented manufacturing, and strive to bolster producer services. We will implement the plan to achieve peak carbon emissions in the industrial sector, comprehensively promote green manufacturing, and encourage green and low-carbon development. By promoting market-oriented and rule-of-law methods, we aim to encourage the merging and restructuring of major sectors and enhance industrial concentration. 

Second, we will consolidate and expand the development of competitive industries. China has developed distinctive competitiveness in sectors such as high-speed rail, ships, electronic power facilities, construction machinery and communication equipment. China's production of major products like personal computers, cellphones, home appliances, and solar panels also accounts for over half of the world's total. We will coordinate resources and ramp up efforts to implement two projects. The first project involves upgrading the foundational industrial infrastructure, which requires consistent and dedicated efforts. The second involves achieving breakthroughs in key technologies and equipment. We will consolidate and enhance the strength of all industrial links and develop several brands for "Made in China." We will also leverage the major role of enterprises, support leading enterprises in improving development quality, and nurture several world-class companies. In addition, we will take special action to develop advanced manufacturing clusters, build world-class advanced manufacturing clusters focusing on key sectors such as construction machinery, rail transit, optoelectronic information, energy and electric power facilities, and textile and apparel products.

Third, we will foster emerging industries. Emerging industries are the new pillars and fields that will lead development in the future. We will keep developing and expanding new application scenarios in key sectors such as 5G, artificial intelligence (AI), biological manufacturing, the industrial internet, intelligent connected vehicles, and green and low-carbon development. We will build more national industrial innovation centers in emerging industries. We will also implement the "Robot + Application Action Plan" and promote large-scale and intensive development in the Internet of Things (IoT) sector.

Fourth, we will proactively plan and create a layout for industries of the future. Seizing opportunities created by the latest round of technological revolution and industrial transformation, we will harness the industries of the future to become a leading force for development. We will study and formulate an action plan to speed up development on frontiers such as humanoid robots, the metaverse, and quantum science and technology and comprehensively advance the development of 6G technology. We will also encourage local authorities to experiment in this regard and make forward-looking arrangements. 

In conclusion, we must promote domestic and international circulation to build a modern industrial system, with the former as the mainstay. Moreover, we need to strengthen global cooperation, deepen reform and opening-up, create a favorable business environment, and better serve advanced manufacturing enterprises, whether Chinese or foreign. Thank you. 

Nanfang Daily:

2022 witnessed explosive growth in China's new energy vehicle (NEV) industry, with production and sales exceeding 6.5 million. Will the momentum be sustained this year? What measures will the MIIT take to advance the industry's sound development? Thank you.

Jin Zhuanglong:

Thank you for your question. It is indeed a topic of public interest. I want to pass it on to Mr. Xin Guobin, who oversees this sector. 

Xin Guobin:

Thank you for your attention, care, and support in developing the NEV industry. Under the strong leadership of the CPC Central Committee and the State Council, relevant parties made determined efforts to seize a remarkable performance of the NEV industry last year. The sector's annual production reached 7.05 million units and sales hit 6.88 million, increasing 96.9% and 93.4%, respectively, year on year. China's production and sales volume of NEVs has topped the world for eight consecutive years. 

Since China issued the "Energy Saving and New Energy Vehicle Industry Development Plan" in 2012, its compound annual growth rate has reached 87%. A total of 15.96 million NEVs have hit the road, making China a leading force in the electrification of the global automobile industry. The public is closely watching the trend of the industry, a sector blessed with a possible take-off. Attaching great importance to its development, the MIIT organized a series of surveys and seminars to solicit opinions from enterprises, research institutes, and industry associations. It turned out that NEV producers were very confident about the industry's development this year. All sides believe that the fundamentals sustaining China's steady and long-term economic and social growth remain unchanged. Their enthusiasm for implementing the spirit of the 20th CPC National Congress and forging ahead with a pioneering and enterprising spirit runs unprecedentedly high. It was also found that green development had taken root, and customer satisfaction with NEVS has steadily improved.

On the basis of a comprehensive assessment of the above factors, as well as production and sales in the past two months, we believe that the sound momentum of the NEV industry will be sustained and stable growth is in sight. We will improve our work in the following five aspects to make it happen.

First, we will strengthen overall planning and upgrade the inter-agency mechanism for developing the NEV industry. We aim to ensure progress in electrification, internet connection and smart technology. Continuous efforts will be exerted to achieve technological breakthroughs, advance applications and reinforce infrastructure. All these efforts will be aimed at building world-class innovative Chinese brands with firmly integrated capacities.

Second, we will support innovation. We will launch major initiatives to enable leading enterprises to fully play their leading role and strive for breakthroughs in the technologies of new system batteries, automotive chips, and vehicle operating systems, and accelerate their industrial application. We will start permitting intelligent connected vehicles to enter the market and pilot their operation. We will also speed up the application of 5G vehicle-road networking technology to realize the integrated development of electrification and intelligent connection.

Third, we will promote popularization. We have jointly issued a notice with relevant departments to pilot the comprehensive electrification of public vehicles. We plan to enhance the electrification level of official vehicles, taxis, mail and sanitation trucks. We will work with other departments to roll out purchase tax reduction and exemption policies as soon as possible, amend the dual-credit scheme, and stabilize market expectations. 

Fourth, we will improve service capabilities. We will bolster the development of domestic resources, stabilize global cooperation, and ensure supply and price stability for critical raw materials. We will also improve the recycling system and tackle critical technologies concerning intelligent disassembly to get power batteries better recycled. 

Fifth, we will advance open development. We will continue implementing open policies for the highly internationalized automobile industry. Giving full play to bilateral and multilateral cooperation mechanisms, we will support exchanges between enterprises, research institutes and industrial organizations and encourage their cooperation in trade, investment, technology research and development, and a standard establishment for common development. That's all. Thank you.

Jin Zhuanglong:

People interested in the new energy vehicle industry may have wondered about its production and sales volume this year, especially after a bumper year in 2022. Just now, Mr. Xin predicted sustainable sound momentum, painting a promising picture for the industry. Thank you. 

CCTV:

Great importance has been attached to the capacity building of industrial foundation in recent years, and we have developed a number of major equipment of vital importance to our country. The report to the 20th CPC National Congress proposed carrying out industrial foundation reengineering projects and research projects on major technologies and equipment . What specific plans does the MIIT have to accelerate implementing the two projects? Thank you. 

Jin Zhuanglong:

Thank you for your question. Let us invite Mr. Tian, in charge of the major equipment manufacturing industry, to answer this question.

Tian Yulong:

Thank you for your question. Mr. Jin talked about advancing the implementation of the two projects for building a modern industrial system just now. I will further explain. 

The industrial foundation is the basis for developing the manufacturing industry. Major technologies and equipment are a strong driving force in the upgrading of the manufacturing industry. The quality of the industrial foundation and major technologies and equipment reflects comprehensive industrial power and the level of industrial development. In the development of the manufacturing industry, major technologies and equipment play a guiding role in upgrading, while the industrial foundation serves as fundamental support. Therefore, we should bolster both major technologies and equipment and the industrial foundation in a bid to enhance and improve the manufacturing industry. We will give full play to the advantages of the new system for mobilizing resources nationwide and a supersize market. To build a modern industrial system, we will build powerful industrial and supply chains, coordinate industrial foundation reengineering projects and research projects on major technologies and equipment, and jointly establish a system for industrial scientific and technological innovation so as to improve the manufacturing industry's core competitiveness.

In terms of industrial foundation reengineering projects, first, we will focus on advancing the industrial foundation and develop a range of core and basic spare parts, basic components, basic materials, key and basic software, as well as advanced basic technologies. Through methods such as the open competition mechanism for selecting the best candidates to lead key research projects, we will make breakthroughs in a number of key and generic technologies as well as basic products, which strongly support the innovation and upgrading of our industrial system. Second, we will establish a batch of generic technological centers for industrial foundations. Relying on leading enterprises and scientific research institutions that have transformed into enterprises, we will give long-term and stable support for generic technological research, product innovation, and application promotion. Third, we will leverage the guiding role of industrial policies. Giving full play to the national manufacturing industry transformation and upgrading fund and the small- and medium-sized enterprises development fund, we will encourage the investment of social capital and funds in the market. In doing so, we will support the reengineering of the industrial foundation and nurture a batch of specialized and sophisticated enterprises that produce new and unique products. 

In terms of research projects on major technologies and equipment, we will focus on developing high-end, intelligent, and green major technologies and equipment. After several decades of development, China's major technologies and equipment have formed a complete system and gained strong industrial competitiveness. Going forward, we will meet our country's needs in major strategic products and speed up developing major technologies and equipment to be systemic, high-end, intelligent, and green. Especially in the fields of large aircraft, aero-engines, gas turbines, electric power equipment, ships and marine engineering equipment, machine tools, high-end medical equipment, and modern agricultural equipment, we will strive to make breakthroughs in a number of innovative and landmark equipment. China has such an industrial foundation and innovative ability. 

Second, we will intensify the demonstration and application of industries and industrial applications. Leveraging the driving force of major programs, major equipment, and complete machine systems, we will demonstrate and apply major equipment and major basic products and industrialize them to build systems for industrial and supply chains. We will build a range of industrialized bases for major equipment as well as industrial clusters based on major advantageous areas and industrial cluster areas. 

Third, we will further optimize a policy support system. Currently, we have established a working mechanism for coordinated advancement in major technologies and equipment with relevant departments, made full use of fiscal and financial support and guidance, and improved mechanisms on insurance compensation, offering incentives and ensuring that those who have fulfilled their duties can benefit. We will promote the demonstration and application of newly-developed equipment , materials, and software. Meanwhile, we will step up training major equipment personnel; deepen cooperation involving industries, universities, and research institutes; and intensify building a new type of engineering science. We will encourage enterprises to carry forward the spirit of craftsmanship and cultivate more skilled and talented people of a high caliber. In doing so, we will continue to explore new ways to advance the development of new industrialization and accelerate the advancement of the two main projects. Thank you.

Jin Zhuanglong:

Figuratively speaking, on the one hand, we should "touch the sky," and one the other hand, we should "stand on the ground." "Touch the sky" means we should develop major technical equipment that applies cutting-edge technologies. "Stand on the ground" means we should bolster the industrial base. Therefore, to help the manufacturing industry go big, we should "touch the sky" and "stand on the ground" at the same time. Thank you.

China Youth Daily:

The development of small- and medium-sized enterprises (SMEs) has always been a great concern. Especially over the past few years, specialized enterprises that use sophisticated technologies to produce new and unique products have gained great popularity in the market. What is the current development of those enterprises? What creative measures will be taken to support their development? Thank you. 

Jin Zhuanglong:

Thank you for your questions. I would first like to clarify that China has attached great importance to SMEs. The office of the leading group for promoting the development of SMEs under the State Council has been established in our ministry. We have also set up a department invested with the duty to promote the development of SMEs. Therefore, I will answer your questions.

As we all know, SMEs are closely connected with everybody life. As most SMEs are private enterprises, they have been a vital force in improving people's livelihoods and promote the development of the economy. The following industry-specific statistics will give a full picture of the key role played by SMEs in our country: SMEs contribute 50% of the total tax revenue, over 60% of the total GDP, over 70% of the technological innovation, over 80% of the urban and rural employment, and over 90% of the total number of enterprises. We have thoroughly implemented guiding principles of important speeches made by General Secretary Xi Jinping on promoting the development of SMEs and carried out decisions and deployments made by the CPC Central Committee. We have also collaborated with relevant departments and local governments to launch a slew of preferential policies under the leadership of the office of the leading group for promoting the development of SMEs under the State Council.

It's known to all that, the pandemic has posed numerous challenges to many SMEs last year. The country has rolled out various kinds of measures to ease their burdens. In 2022, China's tax refunds, tax and fee cuts, and tax and fee deferrals for small and micro-market entities topped 1.7 trillion yuan. China has also carried out a series of campaigns and fostered 274 national demonstration platforms of public services, especially for SMEs. China has launched a special campaign on the outstanding payments owed to SMEs, helping them maintain steady growth, optimize structures, and strengthen capacities to ensure their sound and robust development. In 2022, an average of 23,800 enterprises were established per day, the number of SMEs exceeded 520 million, and the operating revenue of small- and medium-sized industrial enterprises above designated size exceeded 80 trillion yuan. Notably, a group of specialized and sophisticated enterprises has become highlights in the development of SMEs. The National Conference on Development of Specialized and Sophisticated SMEs was successfully convened last year. General Secretary Xi Jinping attached great significance to the event and sent a congratulatory letter. China has fostered over 70,000 specialized and sophisticated SMEs, with 8,997 classified as "little giants." As for the capital market, the number of specialized and sophisticated SMEs accounted for 59% of the total number of newly listed enterprises last year. An accumulated number of over 1,300 specialized and sophisticated SMEs were listed on A-share, accounting for 27% of the total number of firms listed on the A-share market. Those enterprises have been long-established players in industrial sectors that play a crucial role. They demonstrate their professionalization, refinement, specialization, and innovation. As we all talk about "specialized and sophisticated SMEs," what does this term mean? To sum up, here are four key characteristics: professionalization, refinement, specialization, and innovation.

For the next step, we will deepen our understanding of the guiding principles of the important instructions made by General Secretary Xi Jinping on promoting the development of SMEs. We will implement decisions and deployments made at the 20th CPC National Congress and work unswervingly both to consolidate and develop the public sector and to encourage, support, and guide the development of the non-public sector. We will place equal emphasis on management and services. We should also provide support and ensure development simultaneously. We will launch more preferential policies to help enterprises, provide more services to help enterprises, optimize the business environment to revitalize enterprises and make innovations to underpin enterprises, making every effort to promote the high-quality development of SMEs. We will lay more focus on the following five aspects.

First, we will enhance the environment for development. Enhancing the environment for development can boil down to a law, a regulation, an opinion, and a plan. The law means we need to fully implement the Law of the People's Republic of China on the Promotion of Small and Medium-sized Enterprises . The regulation refers to the implementation of the Regulation on Ensuring Payments to Small and Medium-sized Enterprises to protect the legitimate rights and interests of SMEs. The opinion means we need to thoroughly act upon the Guiding Opinions on the Promotion of the Healthy Development of Small and Medium-sized Enterprises . The plan means we need to implement the Plan for Promoting the Development of SMEs during the 14th Five-Year Plan Period (2021-25), ensure various preferential policies for enterprises deliver, and ease difficulties for SMEs.

Second, we will increase cultivation efforts. Development is still what really matters to all. We will strengthen the implementation of the gradient cultivation project for competitive enterprises and strive to have more than 80,000 specialized and sophisticated SMEs that produce new and unique products nationwide this year. We will strengthen policy guidance and resources coordination to cultivate about 100 distinctive industrial SME clusters. We will give play to the leading role of large enterprises and support enterprises of all sizes in pursuing development through closer collaboration. This year, we will continue to hold the National Conference on Development of Specialized and Sophisticated SMEs to build a platform for communication and cooperation between SMEs. All friends from the media are welcome to come.

Third, we will improve the service system. Services are a very important part, and the government needs to do more to serve SMEs. There are several aspects in this regard: first, we plan to issue opinions on further improving the service system for SMEs this year; second, we will further improve the public service systems for SMEs at the national, provincial, municipal, and county levels; third, we will continue to carry out the SMEs Service Month activities nationwide to give full play to the role of public service agencies for SMEs, public services demonstration platforms for SMEs, and business startups and innovation demonstration hubs for micro and small enterprises so that more high-quality services can be provided to SMEs directly.

Fourth, we will promote industry-finance cooperation. Financial institutions now attach great importance to financial support for MSMEs. We will guide financial institutions to consistently increase their financing support for MSMEs. We will leverage the role of the capital market to support specialized and sophisticated enterprises in accelerating their listings. We will give play to the guiding role of the National Fund for SMEs Development to stimulate more investment from nongovernmental capital.

We will further improve the overseas service system for SMEs, ensure the success of the SMEs Expo, and build an international cooperation platform to help SMEs make good use of global resources and achieve win-win cooperation. Thank you.

Science and Technology Daily:

The 20th CPC National Congress made a strategic plan for moving faster to boost China's strength in cyberspace, emphasizing the building of a modern infrastructure system. What considerations does the MIIT have in the acceleration of the construction of the next-generation information infrastructure such as 5G, gigabit fiber optic networks, and mobile IoT? Thank you.

Tian Yulong:

Thank you for your question. The Party Central Committee and the State Council have always attached great importance to this issue and have also made strategic arrangements on the construction of new types of infrastructure. With the joint effort of various departments and localities, the construction of new types of infrastructure, such as 5G, gigabit fiber optic networks, and mobile IoT, as you mentioned, has been gaining steam and achieved remarkable results.

In terms of building 5G networks, we have established the world's largest and leading 5G networks. We have more than 2.31 million 5G base stations. The 5G networks cover all prefecture-level cities and all county seats across China. With the continuous improvement of applications and facilities, the supply capacity of 5G networks has also been continuously enhanced, playing a leading role in building a complete industrial chain which covers systems, chips, and terminals. During the 14th Five-Year Plan period, we will continue to increase the depth and breadth of 5G network coverage, further deepen joint construction and sharing of networks, and vigorously promote the integration of 5G technology and its product applications into all walks of life in our economy and society. Moreover, it is necessary to promote the deep integration of "5G plus Industrial Internet" into the manufacturing industry and expand it to all links of production in order to improve the overall level of digitalization, networking, and intelligence in the manufacturing sector.

Regarding the development of 1000M fiber optic networks, we have realized 1000M network coverage in all cities, broadband connections in all villages, and 5G coverage in all counties. The 1000M fiber optic networks already have the capacity to cover over 500 million households, a world-leading figure. The project to channel more computing resources from China's eastern areas to its less developed yet resource-rich western regions is in full swing, gradually building a computing power infrastructure application system that will enable the less developed regions to handle and store data transmitted from the economically advanced areas.

The total number of standard data center racks in service in China has exceeded 6.5 million, and servers have surpassed 20 million, ranking second in the world in terms of total computing power. In the future, we will launch a "Light Chasing Action" of 1000M fiber optic networks to boost the collaborative innovation of cross-industry, cross-enterprise, and cross-regional networks and encourage digital, internet-based and intelligent transformation of traditional industries. We will strive to achieve the coordinated and balanced development of information and communication networks in small and medium-sized cities and remote rural areas, promote the infrastructure construction of broadband access services in border regions and urban cloud networks in small and medium-sized cities, and thereby allow modern information technology to benefit all our people. At the same time, we will step up efforts to encourage the empowerment of computing infrastructure and build a network structure and computing power supply system that integrates cloud and networks and converges computing and networks.

Regarding the mobile Internet of Things (IoT), China has built the largest mobile IoT in the world, with 1.845 billion connections, accounting for more than 70% of the global total. China has become the first major economy in the world with more connected things than people. The mobile IoT has been widely applied to digital city construction, smart manufacturing and transportation, and mobile payments. We all have a deep understanding of this. It has facilitated our lives and changed our way of life.

In the future, we will leverage the enabling role of network, take the application-driven, market-oriented, and policy-motivated approach and further promote the full development of mobile IoT. We will continue to consolidate the leading edge of our network capabilities and build IoT connectivity that supports the integration of fixed and mobile IoT and the combination of broadband and narrowband IoT. We will continue to expand IoT application scenarios into various industries and fields and further deepen the integration of the IoT with various industries so as to support the construction of Digital China and smart cities and make our information infrastructure more beneficial to the people and social development. Thank you.

Jin Zhuanglong:

Let me give an update on 6G development, which may be of interest to you. We have constantly reviewed the experience of 5G development and encouraged the industry to set up an IMT-2030 (6G) Promotion Group, which is expected to offer a platform for industry, research institutes and telecom operators to promote the integrated development of production, teaching, research and application, and boost international cooperation exchanges and technology development. Thank you.

People.com.cn:

We noted that since last year, the MIIT and other relevant departments have rolled out implementation plans for carbon dioxide peaking in the industrial sector and related key industries like non-ferrous metals and building materials. What is the focus of this year's relevant work? And what steps will be taken next to promote the green transformation of manufacturing? Thank you.

Jin Zhuanglong:

Thank you for your question, which has attracted much attention both at home and abroad. I would like to invite Mr. Xin to answer it.

Xin Guobin:

Let me answer your question. Green and low-carbon development is the big trend in global sustainable development. To accelerate green and low-carbon industrial development is an important measure in boosting a new type of industrialization for China. Since last year, the MIIT has fully implemented Xi Jinping Thought on Ecological Civilization and the decisions and plans of the CPC Central Committee and worked with related departments in rolling out the implementation plans of carbon dioxide peaking in the industrial sector and the key industries of steel, non-ferrous metals, petrochemicals, and building materials. This has helped preliminarily establish a policy framework system for promoting green industrial development. This year, the MIIT's efforts will focus on implementing these plans one by one. We will work hard in the following four aspects:

First, we will promote green manufacturing. We will research, formulate, and issue guidelines for accelerating green development in the manufacturing sector, provide specific guidance for different categories, and implement targeted policies for different industries. We will establish a dynamically upgraded green technology catalog and project library, accelerate the popularization and application of advanced technologies, and boost green upgrading and reconstruction in industries such as iron and steel, building materials, light industry, and textiles. The work in this area is crucial, as Mr. Jin mentioned earlier when answering the first question, traditional industries lay the foundation for our modern industrial system. Those key sectors are of great significance to promoting green and low-carbon development across the whole industry. We will also improve a graded cultivation mechanism; fully pursue green designs for industrial products; foster a batch of green factories, industrial parks, and supply chains; further develop green manufacturing service providers; and intensify efforts to revise relevant standards and regulations.

Second, we will launch a special campaign for industrial energy conservation and carbon reduction. We will deepen energy-saving supervision and diagnostic services. Our target for this year is to complete energy-saving supervisions for 3,000 industrial enterprises and energy-saving diagnoses for more than 1,000 specialized and sophisticated enterprises that produce new and unique products. We will promote high-quality development of the electric arc furnace steel-making process to drive the electrification of the industrial processes. We will establish public service platforms for reaching peak CO2 emissions and carbon neutrality goals; launch pilot projects, including industrial green microgrids and digital carbon-managing systems; and further create typical application scenarios to accelerate green, digitalized, and coordinated transformation. Meanwhile, we will also strengthen benchmarking for energy efficiency and intensify technological reconstruction in key industries to save energy and reduce carbon emissions.

Third, we will improve the quality and efficiency of comprehensive resource utilization. We will further enhance battery recycling and utilization systems for new energy vehicles, promote full traceability management, strengthen the standardized management of renewable resources such as scrap steel and waste paper, and cultivate over 100 key enterprises for comprehensive utilization. We aim to achieve a scrap iron and steel utilization of 265 million tons in 2023. We will work hard to make breakthroughs in utilizing complex and difficult-to-use industrial solid waste such as phosphogypsum and actively expand channels for its comprehensive utilization. Furthermore, we will also focus on steel, petrochemical, chemical, and other key water-intensive industries to carry out pilot projects for wastewater recycling.

Fourth, we will focus on cultivating new drivers of green growth. We will further strengthen the new energy vehicle industry, innovate and develop green aircraft, and promote electric, green, and intelligent upgrading of inland vessels. We will comprehensively enhance the supply capabilities of photovoltaics and lithium batteries, accelerate the building of a standardized industrial system, and promote the innovation and application of intelligent photovoltaics in industrial, construction, transportation, and communication sectors. At the same time, we will also vigorously develop the hydrogen energy and environmental protection equipment industries, as well as research and industrialization of new bio-based materials. Through these efforts, we will further achieve our green development goals for this year. That concludes my answer. Thank you.

Voice of China, China Media Group: 

We've noted that digital technologies like AI and big data have blossomed over recent years, and more and more intelligent factories, automated workshops, and smart manufacturing scenarios have mushroomed from place to place. My question is, what measures will the MIIT take to accelerate the development of smart manufacturing? 

Xin Guobin:

Thank you for your attention to smart manufacturing. Since the 18th CPC National Congress, China's smart manufacturing has been applied on a larger scale and developed rapidly. The achievements regarding smart manufacturing have propped up the high-quality development of the industrial economy. By now, China has built over 2,100 high-level digitalized workshops and intelligent factories, of which 209 are demonstration and benchmark cases. We conducted an analysis of the before and after effects of intelligent upgrading on these 209 enterprises and found that through their transformation, the R&D cycle has been shortened by 20.7%, the production efficiency improved by 34.8%, the defective products rate reduced by 27.4%, and the carbon emissions decreased by 21.2%. We also made a preliminary analysis and summary and concluded that the product iteration speed and delivery capabilities of equipment manufacturing and other discrete manufacturing had been greatly improved, while the safety and green development of process industries such as steel smelting and petrochemicals had been significantly enhanced. Therefore, intelligent transformation is of great significance to enterprises.

Currently, the integration of a new generation of information technology and advanced manufacturing technology has become characteristic of the new round of industrial transformation, propelling profound changes in global industrial and value chains. Developing intelligent manufacturing has become a common choice for major industrial countries to improve core competitiveness. We will continue to focus on intelligent manufacturing; promote technological transformation, improvement, and upgrading; and reshape industrial modes and enterprise forms of manufacturing through intelligent development. These are also decisions and deployments made by the CPC Central Committee and the State Council. This year, we will conduct the work in three aspects, as follows:

First, we will promote application at multiple levels. Targeting key industries, we will develop a batch of world-class intelligent factories and smart supply chains. For small and medium-sized enterprises, we will promote targeted solutions like technology improvement, lean management, and process reengineering on a large scale. For key provinces and cities, we will establish a number of intelligent manufacturing pilot zones and explore the formation of development paths and models with regional characteristics.

Second, we will accelerate breakthroughs in the innovation of integrated technologies. We will strive to make breakthroughs in manufacturing technologies like complex design and advanced techniques, mobilize personnel in all sectors, and give full play to the primary role of enterprises to realize fundamental and strategic breakthroughs. At the same time, we will conduct the R&D and promotion of applicable technologies like AI and Digital Twin and acquire original and forward-looking achievements. We will also promote the digitization of industrial knowledge and develop a batch of basic industrial software and core technology packages.

Third, we will strengthen fundamental support capacities. We will study and formulate policies and measures to promote the digital development of equipment and support the realization of Digital China through the innovation of intelligent equipment. We will enhance the construction of digital infrastructure and accelerate large-scale deployment and application of 5G, the industrial internet, and other technologies. Mr. Jin and Mr. Tian have explained the arrangement and deployment of this work, so I will not elaborate more. Afterward, we will improve the standard system of intelligent manufacturing, deepen applications of fundamental standards, actively participate in international communication and cooperation, learn from each other, and jointly improve intelligent development in various fields. Thank you.

The Beijing News: 

In recent years, China's digital economy has prospered and achieved remarkable accomplishments. The report to the 20th CPC National Congress made important deployments on accelerating the development of the digital economy and further integrating it with the real economy. What measures will the MIIT take to promote integration? Thank you!

Jin Zhuanglong:

Thank you for your question. The digital economy is of great concern to all of us, and the concept of digital economy is comprehensive and covers a wide range of areas. The current new round of scientific and technological revolution and industrial transformation is booming. Integrating the digital and real economies profoundly transforms economic forms, manufacturing methods and business organization models. I believe the full integration of IT applications with industrialization is the key area of integrated development of the digital and real economies. China's industrial economy is large, and the scale of its digital economy ranks second in the world, with broad prospects for integrated development. We will focus on the strategic goals of building up strength in manufacturing, cyberspace and digital technologies in China, targeting the innovation, breakthrough, and extended application of digital technologies, so as to boost the integrated development of IT applications and industrialization. In summary, this involves three main aspects: network platforms, digital industries, and integrated development.

First, we will solidly promote the construction of network infrastructure. China has built the world's largest, technologically advanced network infrastructure and the gigabit network access covers all prefecture-level cities. This year, we will further implement the gigabit city construction action. Recently, we held a gigabit city summit forum to guide local governments and the business circle to accelerate the construction with increased investments to further extend the coverage of 5G and gigabit optical fiber networks. We will also research and develop a computing infrastructure development action plan and strengthen the construction of industrial internet infrastructure.

Second, we will accelerate the development of core industries of digital economy. In 2022, China's electronic information manufacturing industry achieved an operating income of 15.4 trillion yuan, with software related income reaching 10.8 trillion yuan, laying a solid industrial and technological foundation for the integrated development of IT applications and industrialization. We will accelerate the development of artificial intelligence, big data, blockchain, cloud computing, cyberspace security and other emerging digital industries. We will also guide and support enterprises to increase investment in research and development and upgrade industries such as communication equipment, core electronic components, and ultra-high-definition displays. We will promote the high-quality development of the integrated circuit and industrial software industries. We will build high-standard software colleges with unique features and establish reputable software industrial parks in China.

Third, we will vigorously advance the digital transformation of the manufacturing industry. We will formulate a digital transformation roadmap for key industries and cultivate such enterprises that serve as models for others to follow regarding digital transformation. We will implement an action plan to boost 5G development, deepen the integrated application of 5G technologies and the industrial internet, promote the application of industrial internet in industrial parks, and create factories thoroughly equipped with 5G technologies. We will implement a smart manufacturing partnership program and take action to promote standardization in the area so as to build world leading smart factories and smart supply chains and develop new models and new business forms, such as service-oriented manufacturing. That's all for my answer. Thank you!

Shou Xiaoli:

Thank you, Mr. Jin. Thank you to all the speakers and friends from the media. This is the end of today's press conference. Goodbye, everyone.

Translated and edited by Zhu Bochen, Li Huiru, Wang Qian, Xu Xiaoxuan, Ma Yujia, He Shan, Qin Qi, Liu Caiyi, Liu Sitong, Mi Xingang, Huang Shan, Lin Liyao, Zhang Rui, Duan Yaying, Wang Yanfang, Yan Bin, Liu Qiang, Liu Jianing, Zhou Jing, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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                                                                                                                                                              Read in Chinese

Speakers:

Mr. Liu Kun, minister of finance

Mr. Xu Hongcai, vice minister of finance

Mr. Zhu Zhongming, vice minister of finance

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 1, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Today, the State Council Information Office (SCIO) is holding the fifth press conference in the series "Embarking on the New Journey — A Government Perspective." We are honored to have invited Mr. Liu Kun, minister of finance, to brief you on how the Ministry of Finance (MOF) has implemented the major decisions of the 20th National Congress of the Communist Party of China (CPC), and take your questions. Also present at today's press conference are Mr. Xu Hongcai and Mr. Zhu Zhongming, both vice ministers of finance.

Now, I'll give the floor to Mr. Liu Kun for a brief introduction.

Liu Kun:

Ladies and gentlemen, friends, good morning. It's my great pleasure to meet with you face-to-face ahead of the "two sessions." First of all, on behalf of the MOF, I would like to thank friends from the media for your long-term interest in and support for public finance work. I'll take this opportunity to briefly introduce public finance work in 2022.

2022 was an extraordinarily significant year in the history of the CPC and our country. The 20th CPC National Congress was successfully convened, drawing up a grand blueprint for comprehensively building a modern socialist country. The CPC Central Committee with Comrade Xi Jinping at its core rallied and led the Chinese people in rising to challenges, steadily improving development quality, and ensuring overall economic and social stability. At a meeting held by the Political Bureau of the CPC Central Committee on April 29, 2022, General Secretary Xi Jinping emphasized that China should step up macroeconomic policy adjustment, take solid steps to keep economic performance stable, and strive to meet the economic and social development goals set for the whole year. Under the centralized, unified leadership of the CPC Central Committee, the MOF thoroughly implemented the guiding principles of the 20th CPC National Congress, adhered to the general principle of pursuing progress while ensuring stability, fully and faithfully applied the new development philosophy, accelerated efforts to foster a new development pattern, and implemented various fiscal policies early on for the steady recovery and growth of the economy. Revenue in the national general public budget reached 20.37 trillion yuan, an increase of 0.6% over 2021. Expenditure in the national general public budget reached 26.06 trillion yuan, an increase of 6.1%, providing necessary financial support for efficiently coordinating epidemic prevention and control with economic and social development.

First, we stepped up implementation of fiscal policies to maintain stable macroeconomic performance. We promoted the overall planning of financial resources, maintained a necessary level of spending intensity, and increased aggregate domestic demand while keeping a reasonable level of deficit ratio. We maintained the overall deficit ratio within 3% during the past five years to leave ample policy space for meeting new difficulties and challenges. We fully implemented tax and fee policies to support enterprises. Tax and fee reductions, tax refunds and cuts, and fee deferrals introduced last year totaled more than 4.2 trillion yuan, lowering the tax-to-GDP ratio in China from 17% in 2018 to 13.8% in 2022. We accelerated the issue and use of local government special-purpose bonds, and made good use of 502.9 billion yuan in the special bond spare quota in accordance with the law. We implemented robust and effective macro-fiscal control to help maintain stable macroeconomic performance.

Second, we strengthened funding and policy support for primary-level governments to maintain stable fiscal operations. In the past year, we prioritized fiscal operations at county and district levels, strengthened funding and policy support, and did our best to help primary-level governments maintain stable operation. In 2022, central government transfer payments to local governments reached 9.71 trillion yuan, representing a growth of 1.42 trillion yuan, or 17.1%. In the past five years, transfer payments to local governments totaled 40.66 trillion yuan, with an average annual growth rate of 8.4%, providing a strong support for guaranteeing the payment of salaries, normal operation of primary-level governments and the basic wellbeing of the people. We expanded direct allocation to prefecture- and county-level governments, with direct allocated funding increasing from 1.7 trillion yuan in 2020 to around 4.1 trillion yuan last year. On the whole, fiscal operations at county and district levels remained stable, laying a solid foundation for overall economic and social stability.

Third, we pursued innovation to promote the stability of industrial and supply chains. In 2022, national expenditure on science and technology hit 1,002.3 billion yuan, up 3.8% year on year, which guaranteed the capital needed for basic research and making breakthroughs in key and core technologies. Meanwhile, we optimized our policies. We raised the R&D expenses related additional tax deduction rate to 100% for small and medium-sized scientific and technological enterprises. We improved government procurement policies to support innovation. We implemented policies to provide temporary fiscal subsidies for domestic passenger flights. We supported a portion of national comprehensive freight hubs to shore up logistic chains in a bid to increase the tenacity of industrial and supply chains. 

Fourth, we advanced rural revitalization and strengthened the balanced and coordinated development between urban and rural areas and between different regions. Following the new development philosophy, we leveraged the roles of transfer payments and fiscal and tax policies to advance the coordinated development between urban and rural areas and between regions. We provided 40 billion yuan in subsidies for grain planters in three batches and allocated 10 billion yuan from central reserve funds to support drought relief, disaster mitigation, and ensuring autumn harvest. The central government increased the scale of subsidies for rural revitalization. We pushed forward the implementation of major regional strategies and the strategy for coordinated development between regions, increasing transfer payments to old revolutionary base areas, areas with large ethnic minority populations, border areas, and poor areas by 8.2%. 

Fifth, we met basic needs and helped those most in need to improve people's well-being. Upholding a people-centered development philosophy, we met people's needs as much as possible to ensure that public services are inclusive, meet essential needs, and ensure basic living standards for people in difficulty. We ensured expenditure on epidemic prevention and control to reduce the impact on production and daily life. We guaranteed key spending in ensuring people's well-being. The national capital invested in education, social security and employment, public health, as well as addressing air, water and soil pollution and improving rural environment increased by 5.5%, 8.1%, 17.8% and 13.8%, respectively. People's lives have continued to be improved. Since 2017, the national average subsistence allowance standards in urban and rural areas have grown by 39.2% and 62.4%, respectively. The per capita government subsidies for basic health insurance for rural and non-working urban residents increased from 450 yuan to 610 yuan.

Sixth, we deepened the reform of the fiscal and tax system and enhanced the quality and efficiency of governing and supervising finance. The oversight of finance and accounting is an important part of the Party and state oversight system. In our efforts to advance fiscal and tax reforms, we issued guidelines on advancing fiscal system reform at the sub-provincial level and stepped up with integrated budget management. We fulfilled our primary responsibilities in the oversight of finance and accounting and improved the supervision system for fiscal work, focusing on key points in supervision and emphasizing financial disciplines. In doing so, the ability to govern finance was steadily improved.

Ladies and gentlemen, friends from the media, the year 2023 marks the first year of fully implementing the guiding principles of the 20th CPC National Congress. The MOF will take studying and implementing the guiding principles of the 20th CPC National Congress as a primary political task at present and in the coming years. We should acquire a deep understanding of the decisive significance of the establishment of both Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and boost our consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership. We should stay confident in the path, the theory, the system, and the culture of socialism with Chinese characteristics. We should firmly uphold Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and uphold the Central Committee's authority and its centralized, unified leadership. We will prevent and control the COVID-19 pandemic and pursue economic and social development in a well-coordinated way, improve the quality of the economy while maintaining a moderate growth rate of GDP, and balance supply-side structural reform and expanding domestic demand. We will align economic policies with other policies and the domestic economic cycle with the international economic cycle and coordinate current and long-term development. Positive fiscal policies with expanded coverage and enhanced efficiency will facilitate the overall improvement of national economic performance to provide strong support for getting this endeavor to build China into a modern socialist country in all respects off to a good start. 

That's all for my introduction. Thank you. 

Chen Wenjun:

Thank you, Mr. Liu. Now the floor is open for questions. Please identify yourself before asking questions.

CCTV:

Recently, the United Nations and multiple other institutions have raised China's economic growth forecast for 2023, believing that China has sufficient fiscal space to support stable economic growth. The Central Economic Work Conference also noted that, in 2023, the proactive fiscal policy should be stepped up with greater intensity and effectiveness to boost market expectations. In what areas will China increase its proactive fiscal policy with greater intensity this year? How can the policy's effectiveness be further improved? Thank you.

Liu Kun:

Thank you for your questions. The Central Economic Work Conference held at the end of last year put forward specific requirements for the direction and arrangement of fiscal policy. General Secretary Xi Jinping pointed out that we need to prioritize economic stability and pursue steady progress while ensuring economic stability. We also need to continue implementing the proactive fiscal policy and prudent monetary policy and see that the proactive fiscal policy is stepped up with greater intensity and effectiveness.

Enhancing the intensity and effectiveness of the proactive fiscal policy reflects the general principle of pursuing progress while ensuring stability. The move also pays equal attention to actual and possible needs, present and long-term situations, development, and security. The foundation of domestic economic recovery is not yet solid and the triple pressures of shrinking demand, disrupted supply and weakening expectations are still mounting. Moreover, the external environment is in turmoil. These risks and challenges require us to strengthen macro-regulation through fiscal policy and employ a combination of policy tools to maintain fiscal sustainability and ensure that local government debt is kept under control as we effectively support high-quality development.

Regarding policy intensity, we will work to moderately expand fiscal policies in the following three aspects. First, we will intensify our efforts on fiscal spending. Expenditure on the national general public budget reached 22.06 trillion yuan in 2022. Based on this, we will coordinate policy tools involving fiscal revenue, fiscal deficit, and loan interest subsidies while appropriately expanding fiscal spending. Second, we will intensify efforts to boost investment in special-purpose bonds. We will budge the scale of special-purpose bonds issued by local governments in a reasonable manner. We will also moderately expand both investment areas and the scope of special bonds that can be used as project capital to continuously boost investment. Third, we will intensify efforts to channel fiscal funds to local levels of government. We will keep increasing central government transfer payments to local governments and direct spending toward poor and underdeveloped areas to ensure livelihoods, salaries and operations at the primary level.

We also need to improve the effectiveness of policies. We will work to improve preferential tax and fee policies, make sure they are more targeted, and strive to ease the difficulties facing businesses. We will also optimize the structure of fiscal spending and give full play to the leveraging role of government funds in expanding investment and boosting consumption. Meanwhile, we will strengthen coordination between monetary, industrial, technological and social policies and create a synergistic effect for an overall economic upturn.

Enhancing the intensity and effectiveness of the proactive fiscal policy covers many issues. Here, I would like to emphasize the following five aspects.

First, we will improve supportive tax-and-fee policies and ease businesses' difficulties. Considering both the need to help businesses and the fiscal affordability, we will further improve preferential tax-and-fee policies and prioritize the support for micro-, small- and medium-sized enterprises (MSMEs), self-employed individuals, and sectors in serious trouble, to further lower the corporate burden and generate strong growth momentum.

Second, we will strengthen coordination on fiscal resources and maintain the necessary level of spending intensity. We will pool resources to complete key national undertakings and optimize the combination of policy tools. We will scale up investment in sectors that help reinforce the foundation for the country's long-term development, strengthen areas of weakness, and optimize the development structure, in a bid to ensure funding support for the nation's key strategic tasks.

Third, we will ramp up efforts to improve the mix of spending and continue increasing efficiency in this regard. Party and government bodies will keep their belts tightened, avoid spending money on unnecessary matters, and keep spending low to benefit the people. We will proactively support key fields involving sci-tech breakthroughs, rural revitalization, education and green development. We will also improve the mechanism to directly allocate budgetary funds to prefecture- and county-level governments and see that fiscal funds are used efficiently following relevant regulations.

Fourth, we will balance the fiscal capacity among different regions and equalize their access to basic public services. We will keep increasing central government transfer payments to local governments and improve their ability to provide fiscal support. We will reform the fiscal systems below the provincial level and improve the mechanism to ensure long-term funding for county-level governments. We will promote the development of a system of standards for ensuring basic public services.

Fifth, we will tighten financial discipline and effectively guard against fiscal risks. We will strictly regulate fiscal revenue and expenditure management and improve oversight and monitoring mechanisms to tighten financial discipline. We will resolutely deter borrowing in violation of laws and regulations, curb the growth of hidden debts, prudently address existing ones, and ensure no systemic risks arise. Thank you.

Reuters:

Some local governments face a tight fiscal balance due to less revenue from land sales, anti-COVID spending, infrastructure expenditure, and pressure from maturing debts in large volumes. How does the MOF view this situation?

Liu Kun:

Your question includes many small ones. Thank you very much for your questions. First, I would like to brief you on the revenue and expenditure of local governments last year. In 2022, revenue in local governments' general public budget was 10.88 trillion yuan, an increase of 5.9% after deducting value-added tax (VAT) credit refunds. Expenditure in local governments' general public budget was 22.5 trillion yuan, an increase of 6.4% over the previous year. The fiscal performance of local governments was generally stable. With the improvement and adjustment of epidemic prevention and control policies, and the continuous effects of the package of policies and follow-up measures to stabilize the economy, the economy is expected to pick up, in general, this year, and the fiscal performance of local governments is expected to improve gradually.

Your question contains three small questions, which I would like to answer one by one.

Regarding revenue from land sales, a large part of the budgets of local government-managed funds come from land sale revenue. Looking at the budgets of local government-managed funds across the country, some revenue was transferred to the general public budget, accounting for about 15% of the budgets of local government-managed funds. Although there was a decline last year, the effect on expenditure in local governments' general public budget was controllable. The specific data is yet to be determined in the final accounts. However, suppose we estimate based on a decrease of about 2 trillion yuan in revenue from land sales in 2022. In that case, the affected financial capacity in local governments' general public budget will be about 300 billion yuan. I would also like to point out that revenue from land sales is gross revenue. When revenue decreases, there will also be a corresponding reduction in cost outlay, such as compensation for demolition and relocation. Since revenue and expenditure are interconnected, the revenue decline has no significant influence.

You also mentioned pressure from maturing debts in large volumes. Regarding debts, the liability ratio of statutory debt last year was about 50%, a relatively low level by global standards and in the economic world. The main problem regarding the debts of China's local governments is that they are distributed unevenly, with some regions facing higher debt risks and pressure to pay principal and interests. We have urged local governments to assume their primary responsibility for defusing local government debt risks to ensure no systemic risks arise. That's a bottom line we can hold to.

You also asked about the fiscal balance of local governments. Revenue in local governments' general public budgets grew by an average of 2.5% from 2020 to 2022, compared with a 2.1% decline last year. You also said it was falling and in a state of borderline sufficiency. It fell by 2.1% last year, many percentage points lower than the ten-year average. But you have to know that the financial capacity of local governments is not the same as local-level revenue in their general public budget. About 40% of local governments' financial capacity comes from transfer payments from the central government. In the past three years, transfer payments from the central government have grown at an average annual rate of 9.3%. I mentioned at the very beginning the average growth rate over the past five years, and here is that over the past three years. You can see that our transfer payments to local governments are growing. The 9.3% growth rate was 6.8 percentage points higher than the growth rate of revenue in local governments' general public budgets, effectively making up for the shortfall in local-level revenue. In terms of the execution of local budgets, local government expenditures have increased by an average of 3.4% in the past three years. Therefore, it is a state characterized by borderline sufficiency but an increasing aggregate. Local budgets are well executed. Thank you for your question.

21st Century Business Herald:

Government funds always play a leveraging role in effectively propelling the expansion of total investment. With special-purpose bonds being an important channel, will local governments issue more this year? In what fields will the bonds be mainly invested? You've just mentioned the funds should be used as soon as possible so that they can take effect early.

Liu Kun: 

Now let's give the floor to Vice Minister Xu Hongcai.

Xu Hongcai:

Issuing special-purpose bonds for local governments is essential for driving and expanding effective investment and maintaining macroeconomic stability. Since 2018, newly added special-purpose bonds for local governments have totaled 14.6 trillion yuan. Among them, newly added bonds in 2022 totaled 4 trillion yuan, including those enlisted in government budgets and allocated from unused quotas before in accordance with law, used to support the construction of 30,000 key projects. These projects helped strengthen the economic foundation, enhance areas of weakness, improve people's lives, expand investment, and propel social and economic development.

This year, we will step up proactive fiscal policies. According to the Central Conference on Economic Work, tools like deficits, special-purpose bonds, and interest subsidies should be better combined to guarantee the sustainability of government funds and control local government bond risks while supporting high-quality development. We will follow and implement the principles of the Central Conference on Economic Work, ensuring that the size of special-purpose bonds is kept within an appropriate range. We will ensure government investment does not diminish and that it better plays its leveraging role. The specific amount will be released during the annual session of the National People's Congress.

As for the question of the investment orientation and fields, this year, we will mainly support the construction of projects in the 11 fields set before. On this basis, we will expand the investment fields and the range of funds used as project capital appropriately. We will step up the construction of key projects continuously, make solid achievements, and form the driving force of investment to support high-quality development effectively. These tasks will be further deployed and arranged later. Thank you.

China Securities Journal: 

The MOF recently issued a bulletin on accounting quality inspection. According to it, over 170 accounting firms were punished. We see that the supervision of auditing firms has become stricter and the redline of financial discipline has become more apparent. My question is, what will the MOF do to enforce financial discipline this year? Thank you.

Zhu Zhongming:

Thank you for your attention to financial and accounting supervision. The CPC Central Committee and the State Council attach great importance to this work and General Secretary Xi Jinping has made important instructions on tightening financial discipline and enhancing financial and accounting supervision on different occasions. The MOF has followed and implemented the guiding principles of the important instructions, fulfilled the primary responsibility of financial and accounting oversight, tightened up financial discipline and played an important role in exercising full and rigorous Party self-governance, ensuring financial order, and promoting high-quality social and economic development. 

Recently, the central authorities released a document on enhancing financial and accounting supervision, which stipulated the main aspects of the work, such as establishing a supervision system, developing sound mechanisms, and so on. It is significant in advancing the work in the new era and enforcing financial discipline. The MOF will follow and implement the document, focus on the main responsibility of supervision, clarify incentive and constraint mechanisms, have zero tolerance towards violations of laws and rules and never let financial discipline exist in name only.

In 2023, we will conduct special campaigns on financial and accounting supervision and make efforts in the following three key areas: 

First, we will ensure the implementation of major decisions and deployments made by the CPC Central Committee and the State Council. We will prioritize this on the agenda of financial and accounting supervision work. We will strictly investigate and handle financial infractions that violate the central government's macro decisions, governance, and regulatory requirements and impact the high-quality development of the economy and society. We will ensure that the central government's policies and decisions are implemented smoothly. 

Second, we will adopt more stringent financial discipline and restrictions. We will focus on implementing tax-and-fee policies , tightening the belts of the Party and government institutions, and stepping up efforts to ensure payment of salaries, normal operations, and the basic well-being of the people at the community level. We will also enhance restrictions and supervision and tighten financial discipline.

Third, we will crack down hard on financial and accounting violations. We will adhere to the principles of adopting powerful measures, closing loopholes, imposing severe punishments and promoting integrity. We will strengthen supervision of the quality of accounting information and intermediary institutions' performance, strictly investigate and handle violations such as financial fraud and accounting deceit, resolutely eliminating the "black sheep." 

You mentioned that the MOF punished more than 170 accounting firms last year, which is more than the total of the previous three years. This year, we will intensify our efforts in this regard. In addition to the MOF's direct inspection of 35 accounting firms and 10 asset evaluation agencies, we will organize financial departments nationwide to conduct inspections with broad coverage. We will rigorously handle and punish any breaches uncovered during inspections in accordance with laws, promptly publish inspection announcements and typical cases, and strengthen financial discipline, making it an untouchable "high-voltage wire." Thank you.

The Paper:

Mr. Liu noted that China cut 4.2 trillion yuan in taxes and fees last year, hitting a record high. How will the preferential policy of tax and fee reductions continue and be improved this year? Thank you. 

Liu Kun:

I will invite Mr. Zhu to answer this question about tax and fee reductions. 

Zhu Zhongming:

Thanks for your question. In 2022, facing the triple pressures of shrinking demand, disrupted supply and weakening expectations, the CPC Central Committee with Comrade Xi Jinping at its core exercised overall leadership, made sound decisions, improved and innovated macro regulation, promptly and decisively implemented a new package of tax-and-fee policies, which helped cultivate and develop business entities, and promote economic recovery. 

The tax and fee reduction policies implemented last year had the following three features:

The first was intensive efforts. Tax and fee reductions, as well as tax refunds and postponed tax and fee payments introduced last year, totaled more than 4.2 trillion yuan, including approximately 2.46 trillion yuan in value-added tax (VAT) credit refunds, which is 3.8 times more than that of 2021. This was the most substantial effort in recent years. 

The second was early implementation. Efforts were made to refund substantial VAT credits at a bigger scope and faster pace, with most completed in the first half of last year. The outstanding VAT credits for the year were refunded in advance by the second quarter. Various preferential policies were implemented early for quick effect.

The third was more coordination. We strengthened coordination and connection and successively introduced a package of policies, including granting small taxpayers exemptions from VAT payments, temporary postponement of social insurance premium payment, and purchase tax reductions on certain passenger vehicles. These policies were designed to ease difficulties and promote synergies.

Tax cuts and fee reductions get right to the spot in tackling the pains and difficulties currently troubling business entities and apply a "fertilizer" to the roots of their development. The effect of easing the burdens and difficulties is quite obvious. We compiled statistics and found that in 2022, the tax burden of 100,000 key tax source enterprises across the country dropped by 2.7% per 100 yuan revenues. As Mr. Liu Kun just reported, the proportion of China's tax revenue in GDP dropped to 13.8% last year. After excluding the one-time factor of large-scale VAT credit refunds, the tax burden level was about 15%. This has increased cash flow and enhanced development vitality for enterprises, making them more resilient in responding to risks and challenges.

In 2023, various tax-and-fee policies will still play a significant role in helping enterprises ease their difficulties and maintaining major economic indicators within an appropriate range. We will take into account the bearing capacity of finance and the need to ease the difficulties of businesses, study and clarify policies as soon as possible, ensure they are implemented, and promote the formation of a positive circle of "building a deeper pool to farm more fish."

First, we will fully implement all existing policies. We will continue to implement the tax cut and fee reduction policies that have been clearly outlined. We will take solid steps to ensure that tax and fee reductions take full effect. At the same time, we will act firmly against tax evasion and tax fraud, and resolutely deter arbitrary charges.

Second, we will refine and improve our preferential policies. In terms of existing measures such as tax cuts, fee reductions, tax refunds, and tax deferrals, we will focus on continuing and optimizing these measures so that these policies can better benefit business entities.

Third, we will further enhance the precision of our policies. We will focus on support for MSMEs, self-employed individuals, and industries in extreme difficulty and create momentum and vitality for micro-entities' development. Thank you.

Kyodo News:

From a macroeconomic point of view, General Secretary Xi Jinping places great importance on expanding domestic demand. Which policies are particularly critical in achieving this goal? For instance, purchase subsidies for new-energy vehicles have been terminated. From what aspects will the MOF use fiscal policy resources to drive the expansion of consumption? Thank you.

Xu Hongcai:

You raised a very important question because consumption is a key engine of economic growth and the ultimate aim of people's work and lives. The report to the 20th CPC National Congress pointed out that the fundamental role of consumption in stimulating economic growth should be leveraged. Clear requirements were put forth at the Central Economic Work Conference for prioritizing consumption recovery and expansion. A few years back, the contribution of final consumption to China's economic growth was more than 60%. However, the consumption growth rate has declined due to factors such as the epidemic in recent years. This is also an important reason for slower economic growth.

Promoting consumption is crucial for driving economic growth and ensuring sustained and healthy economic development. Restoring consumption as soon as possible is the main driving force of economic growth. The key to vigorously improving consumer confidence and unleashing consumption potential is to address acute issues such as limited spending power, inconvenient consumption, and reluctance to spend. Financial departments will fully implement the strategy of expanding domestic demand and actively improve policies and measures centered on better exploiting the fundamental role of consumption. We will start from the following three aspects to stimulate consumption potential to further support and promote the recovery and upgrading of the consumer market.

First, we will strive to increase personal income through various channels to ensure ordinary people have more money to spend. We should do everything possible to increase employment, enabling people to create income through hard work. We will expand social security, transfer payments, and other adjustments to improve the consumption capacity of medium- and low-income residents while improving tax and fee preferential policies to stimulate social consumption potential.

Second, we will support efforts to increase the supply of readily marketable products to enhance people's willingness to consume. By adopting proactive fiscal policies and advancing supply-side structural reform, we will continue to improve domestic supply quality to unleash market demand's potential. We will encourage localities with the right conditions to support, through current financial channels, the replacement of old home appliances as well as the purchase of green and smart home appliances in rural areas. We will continue to waive vehicle purchase tax for new-energy vehicles purchased in 2023 and lower import tariffs for some quality consumer goods. We will speed up establishing a housing system with multiple types of suppliers, multiple channels for housing support, and encouragement for renting and buying. We will also support people in buying their first homes or improving their housing situation. With all these efforts, we will actively expand consumer spending.

Third, we will ensure smooth sales channels and logistics services to make people's consumption convenient. We will facilitate action to develop county-level commerce to upgrade and expand consumption at the county level. Support will be given to develop the supply chain system for agricultural products and expand the consumer market for agricultural products. We will support the construction of a batch of national integrated freight transport hubs to reduce costs and improve efficiency in logistics. Thank you.

China News Service:

Fiscal revenue and expenditure this year have attracted wide attention. Can you provide a brief analysis? How will funding for key areas, such as ensuring people's livelihoods, be affected this year? Thank you.

Liu Kun:

You raised a question of public concern. To speak on fiscal revenue and expenditure this year, considering all factors, I believe that we can expect the economy's overall recovery this year, and fiscal revenue is mainly affected by two factors. One is that the recovery of the economy will lead to an increase in fiscal revenue. The other is that because we launched VAT credits refunds on a large-scale last year, the base is relatively low correspondingly. The joint influence of these two factors will lay a foundation for a rebound in fiscal revenue. However, we must also note that the foundation for achieving China's economic recovery needs to be further consolidated, and fiscal revenue faces major uncertainties. In terms of fiscal expenditure, expenditures in key areas, including research and development in science and technology, rural revitalization, and eco-environmental protection, will increase undoubtedly. Greater support is needed to shore up weak links in elderly care, education, healthcare and other areas that are important to people's lives. Government spending is directed to support the coordinated development of regions and support local governments in their efforts to ensure payment of salaries, normal operations, and people's basic well-being; sufficient funding is required to provide transfer payments.

Although notable budgetary imbalances still exist in 2023, we will not cut our spending on basic living needs. We will do everything within our capacity to ensure continued increases in spending to meet basic living needs, make every effort to bring tangible benefits to the people, and ensure a more complete and lasting sense of fulfillment, happiness, and security for our people.

First, we will fully implement the employment-first strategy. We will make full use of the central government's employment subsidies to support reducing burdens, stabilizing jobs and increasing employment. We will facilitate the employment of young people, especially college graduates. We will support rural migrant workers, people lifted out of poverty, ex-service members and other key groups in finding jobs and starting businesses. We will continue to support vocational skills training to tackle structural unemployment.

Second, we will give priority to ensuring the development of education. Based on the 21 trillion yuan of government spending on education in the past five years, we have continued to improve the mechanism for government spending on education. For many years, government spending on education has remained above 4% of GDP. Just now, I mentioned that the share of tax revenue in GDP has decreased. Tax revenue is a major source of fiscal revenue. The share of fiscal revenue in GDP has been decreasing. Meanwhile, the share of spending on education in GDP should be kept basically stable. Therefore, that means the share of government spending on education in fiscal expenditure has increased over the past few years. We will enhance weak links in compulsory education, increase resources for public-interest preschool education via multiple channels, and support the improvement of regular high schools' basic conditions.

Third, we will enhance medical and health services. We will support the COVID-19 response in a new phase and improve the funding mechanism for basic medical insurance. We will deepen the reform of public hospitals to ensure that they genuinely serve the public interest and advance the unified management of basic medical insurance funds at the provincial level.

Fourth, we will improve social security. We will fully implement unified national management of basic old-age insurance funds for enterprise employees and take active steps to promote the development of private pensions. We will improve supporting measures to boost birth rates as well as fiscal policies and measures in response to the aging population. We will support people in buying their first homes and improving their housing situation. I remember that at a press conference held here before, a reporter asked about efforts to guarantee basic old-age insurance for enterprise employees. My answer was that all enterprise employees in China would be ensured of the insurance. Now, basic old-age insurance funds are guaranteed in the way that I mentioned then.

Fifth, we will continue to improve the ecological environment. We will speed up the efforts to launch projects for the holistic conservation and restoration of mountains, waters, forests, farmlands, grasslands, and deserts. We will support the actions to keep our skies blue, waters clear, and lands clean and facilitate the transition of major industries and sectors towards green and low-carbon development. Thank you.

Chen Wenjun:

The last question.

Xinhua News Agency:

Tightening the government's belt is both a solution in response to contemporary developments and a strategy with a far-reaching impact. How will the central government implement the requirement for Party and government organs to keep tightening their belts?

Liu Kun:

It is a very good question. In recent years, finance departments at all levels have implemented the guiding principle of hard work, plain living, and thrift in fiscal work. The effectiveness of fiscal funding has been enhanced to help the Party and government organs live on a tight budget. Take the central government, for instance. Central government departments have exercised strict management over departmental spending, cutting general expenditures for four consecutive years. In 2022, the budgetary spending of central government departments was planned to decrease by 2.1%, while the actual decrease reached 3.5% in budget execution. We have spent money where it can be used most efficiently to better ensure funding for key areas.

General Secretary Xi Jinping once pointed out that hard work, plain living, and thrift are important for continuing our journey to grow in strength and building on past success for new historic achievements. The remarks remind us that tightening the government's belt is a policy we must uphold as a long-term rather than a short-term measure. We should cut expenditures to reorient fiscal resources toward supporting local governments in their efforts to guarantee people's basic living needs and the interests of market players. The government should tighten its belt to let people live better lives. 

During the execution of the budget, an increase in government administrative charges and spending on official overseas visits, official vehicles and official hospitality will lead to a decrease in spending to meet basic living needs. Likewise, transfer payments to local governments may decline when central government expenditures rise. In this regard, we have stepped up efforts and balanced expenditure and revenue nationwide over the three years of the fight against COVID-19. We have spent money where it can be used efficiently and effectively and generally achieved good results. A decline in local revenues hasn't impacted national financial security.

Remaining committed to the instructions of General Secretary Xi Jinping, the MOF will continue to fully implement the requirement of living on a tight budget. We will be as "tight-fisted" and "calculating" as possible, and see that every cent is used where needed most.

First, tighten the budget. Second, strengthen budget execution. Third, make effective use of available fiscal funds. Fourth, carry out regular assessments.

Specifically, we will draw up a tighter budget, cut or cancel inefficient or ineffectual expenditures, and pool resources to ensure funding for tasks involving major national strategies.

We will tighten constraints on budgetary spending and keep additional items in budgets under strict control for which funds may be appropriated. In principle, we will not introduce new policies that increase spending, except for expenditures on emergency response and disaster relief items. Overspending and spending beyond the set standard are forbidden.

We will timely review and recall surplus funds to avoid funds sitting idle for a long period of time. The budget for projects with large carryover funds will be reduced.

We will conduct quarterly assessments of central government departments to evaluate their implementation of living on a tight budget and strengthen the application of assessment results. We will also urge local governments to actively advance the development of an assessment system in this regard to cut administrative costs. Thank you.

Chen Wenjun:

Thank you to Mr. Liu and all the other speakers. Thank you to all my friends in the media. Today's press conference concludes here. Goodbye.

Translated and edited by Zhang Liying, Wang Qian, Liu Jianing, Liu Sitong, Zhu Bochen, Zhang Junmian, Zhang Jiaqi, Wang Yanfang, Mi Xingang, Yuan Fang, Xu Xiaoxuan, Li Huiru, Yan Bin, Huang Shan, Xu Kailin, Ma Yujia, Li Xiao, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Mr. Wang Zhigang, minister of science and technology 

Mr. Wu Zhaohui, vice minister of science and technology 

Mr. Zhang Guangjun, vice minister of science and technology 

Mr. Xie Min, director general of the Department of Policy, Regulation and Innovation System of the Ministry of Science and Technology (MOST)

Mr. Chen Jiachang, director general of the Department of High and New Technology of the MOST

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

Feb. 24, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Today, the State Council Information Office (SCIO) is holding the fourth press conference in the series "Embarking on the New Journey — A Government Perspective." We have invited Mr. Wang Zhigang, minister of science and technology, to brief you on implementing the innovation-driven development strategy to build China into a leading country in science and technology. We also have with us two vice ministers and two directors general of science and technology: Mr. Wu Zhaohui, vice minister; Mr. Zhang Guangjun, vice minister; Mr. Xie Min, director general of the Department of Policy, Regulation and Innovation System of the Ministry of Science and Technology (MOST); and Mr. Chen Jiachang, director general of the Department of High and New Technology of the MOST.

Now, let's give the floor to Mr. Wang for his introduction.

Wang Zhigang:

Hello ladies and gentlemen, friends from the media. First of all, I would like to thank all friends from the media for your long-term attention, care, support and help regarding scientific and technological innovation. I'm also very pleased to meet you ahead of the upcoming national two sessions and to brief you on the new measures and progress of the national science and technology community in studying and implementing the guiding principles of the 20th CPC National Congress, and speeding up efforts to achieve self-reliance and strength in science and technology .

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has put sci-tech innovation at the center of the country's overall development and pushed for historic achievements and changes in China's sci-tech cause. From independent innovation to self-reliance and self-strengthening, from following others and participating to leading and pioneering, and from breakthroughs in key fields to systematic capacity improvement, the past decade has witnessed leapfrog development of China's sci-tech cause, the fastest improvement in China's sci-tech innovation ability, and the most prominent role played by science and technology as a primary productive force. China's ranking in the Global Innovation Index rose from 34th in 2012 to 11th in 2022, joining the ranks of the world's innovators and ushering in a new stage of building self-reliance and strength in science and technology and building China into a leading country in science and technology. The report to the 20th CPC National Congress states that innovation will remain at the heart of China's modernization drive and that education, science, technology and human resources are the foundational and strategic pillars for building a modern socialist country in all respects . A special chapter has been assigned in the report for relevant arrangements. This is a major strategic decision made by the CPC Central Committee with Comrade Xi Jinping at its core with a look toward the overall trend, the current situation and the long run.

The nationwide science and technology community has thoroughly studied and implemented the guiding principles, decisions and arrangements of the 20th CPC National Congress, overcome difficulties and worked hard. All sectors have worked together to tackle problems, and the country's eastern, central and western regions have cooperated to innovate. Integrated development has been secured within science and technology, industries and financing, and coordinated progress has been made in deepening reform and innovative development. All these have formed a mighty force in the whole nation to pioneer innovation with one heart and one mind. The position of sci-tech innovation in the overall cause of the Party and the country has never been given such prominence and it has played an unprecedented role. Empowerment through science and technology has become a prominent symbol of high-quality development and sci-tech innovation has become an important engine for the modernization drive.

China's sci-tech strength has markedly improved and its influence in the global innovation landscape has significantly increased. China's research and development (R&D) spending nationwide increased from 1 trillion yuan in 2012 to 3.09 trillion yuan in 2022, with R&D spending intensity rising from 1.91% to 2.55%. Investment in basic research rose from 49.9 billion yuan in 2012 to around 195.1 billion yuan in 2022, accounting for 6.3% of the country's total R&D spending, up from 4.8%. The total number of R&D personnel increased from 3.25 million person-years in 2012 to an estimated more than 6 million person-years in 2022, maintaining the first place globally for many years. China's academic papers accounted for 41.7% of the world's hot papers that perform in the top 0.1% of all papers based on citations, and accounted for 27.3% of highly cited papers. China is not only an important participant in international frontier innovation, but also a significant contributor to solving global problems.

Empowerment though science and technology across the board has provided more high-level groundwork for high-quality development. We have insisted that goal orientation and free exploration must go together, made a number of original achievements with international influence in basic research fields such as quantum information and brain science, and played a leading role in innovation in several important areas. We have paid equal attention to shoring up weak links and consolidating strengths, and made breakthroughs in core technologies of key industries including high-performance equipment, intelligent robots and laser manufacturing. We have actively invested in new areas and accelerated scenario application of emerging technologies like artificial intelligence, big data, blockchain and 5G. We have focused on the two key issues of seeds and arable land to strongly support and guarantee national food security. Regarding people's health and safety, sci-tech innovation has provided more precise and comprehensive support for disease prevention and control, public health and response to population aging. Sci-tech innovation has played a prominent role in penetrating, spreading and transforming. It has deeply integrated with every aspect of economic and social development and the lives of the people, greatly improved the quality and enduring driving force of China's development, and created a broader new vision and brought new, better expectations for the Chinese path to modernization.

Critical reform tasks have been conducted and overall effectiveness of the national innovation system has been significantly improved. The implementation of the three-year plan for structural scientific and technological reform has been accelerated and various breakthroughs have been made in key areas. We have boosted China's strength in strategic science and technology , and accelerated the establishment of a system of national laboratories with Chinese characteristics. High-level research universities and research institutes have played a key role in carrying out major national sci-tech tasks. The principal role of enterprises in sci-tech innovation has been further enhanced. High-tech enterprises increased from 39,000 in 2012 to 400,000 in 2022, contributing 68% of total R&D input of enterprises nationwide, and 762 are among the world's top 2,500 in terms of R&D input. We have coordinated the development of international and regional centers for sci-tech innovation. Zhongguancun has led a new round of trials in granting additional deductions for basic R&D costs and paying for sci-tech advances after trials. A total of 23 national innovation demonstration zones and 177 national high-tech zones have become the pacesetters in promoting high-quality development. Legal policies and cultural environment conducive to sci-tech innovation have been further improved, and the whole of society is more enthusiastic about supporting, investing in, participating in and facilitating innovation than ever before.

We have expanded opening-up and cooperation and actively fostered an innovation ecosystem conducive to international sci-tech exchanges and collaboration. Openness and cooperation are not only essential to the development of science and technology, but also necessary to meet global challenges. Following the international sci-tech cooperation philosophy of openness, inclusiveness, mutual benefit and shared benefits, we have collaborated scientifically and technologically with over 160 countries and regions, and participated in over 200 international organizations and multilateral institutions. China has carried out extensive international cooperative research in such key areas as climate change, clean energy and COVID-19 prevention and control, and conducted joint funding with more than 60 countries, regions and international organizations. The Belt and Road Science, Technology and Innovation Action Plan has yielded good results, and a number of joint laboratories have been built. China has made efforts to lead and organize major international science programs and projects, and actively participated in major international science projects such as the International Thermonuclear Experimental Reactor and the Square Kilometre Array . We have built more platforms for international sci-tech exchanges and cooperation in key areas to provide a broad stage for international talent to work in China and make China a fertile ground for global innovation and entrepreneurship.

In 2022, thanks to the joint efforts of the whole scientific and technological community, we scored one success after another in scientific and technological innovation. The Tianhe, Wentian, and Mengtian modules have been sent to space as part of China's orbital space station. The Kuafu-1 solar probe, the Qinghai-Tibet scientific expedition, micro-nano satellites, quantum communication, and proton therapy also emerged as key breakthroughs. For the first time, society's spending on research and development exceeded 3 trillion yuan. In addition, the research and development investment intensity exceeded 2.5% for the first time. The proportion of investment in basic research surpassed 6% for the fourth year in a row. Breakthroughs were achieved in several key and core technologies. New steps were taken to increase national strategic scientific and technological strength. Meanwhile, scientific and technological resources ensured the high-quality sports events organization and athletic competitions in the Beijing Winter Olympics. In addition, scientific research breakthroughs contributed significantly to a major and decisive victory in epidemic prevention and control across the country.

This year marks the first year of studying and implementing the guiding principles of the 20th CPC National Congress. To break new ground, the scientific and technological sector needs to be a pioneer in reshaping new advantages in development, be an engine in fostering a new development paradigm, and play a key role in China's modernization drive. At present and in the coming years, we will fully implement the guiding principles of the 20th CPC National Congress and the major decisions and plans of the CPC Central Committee. We will set our sights on four important strategic areas, namely embracing global cutting-edge technology, driving economic growth, meeting the country's critical needs, and improving people's health, and take stock of the state-of-the-art and evolving science and technology trends worldwide to seize major opportunities afforded by the new scientific and technological revolution and industrial transformation. We will move to upgrade home-grown technologies based on the Chinese characteristics of scientific and technological innovation and proceed from the features of scientific and technological development in the new era to ensure national development and strategic security.

We firmly believe that under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the scientific and technological community will strengthen its confidence in innovation. We will work hard to overcome difficulties, scale new scientific and technological highs, earnestly implement strategic plans put forward at the 20th CPC National Congress, and step up efforts to achieve high-level self-reliance in science and technology. We will get our endeavor to build China into a modern socialist country in all respects off to a good start and make irreplaceable, significant scientific and technological contributions to the modernization drive.

Now, my colleagues and I are ready to share our views on your questions. Thank you.

Chen Wenjun:

Thank you, Mr. Wang. Now the floor is open for questions. Please identify yourself before asking questions.

Xinhua News Agency:

The 20th CPC National Congress identified that education, science and technology, and human resources are the fundamental and strategic pillars for building a modern socialist country in all respects. How do you interpret that? How will the science and technology sector implement it? What are the next steps? Thank you.

Wang Zhigang:

Thank you for your questions. The report to the 20th CPC National Congress devoted a chapter to science and technology, education, and human resources for the first time in history. It suggests that we have developed new strategic thinking in resource allocation and supporting power and resources in our modernization drive. It is about how education, science and technology, and human resources combine to amplify their roles and jointly contribute to modernization. My view is that it is the result of grand strategic considerations. Without strength in education, science and technology, and human resources, there would not be a strong modern country. This reflects our deepening understanding of the law of building a strong modern country and our urgent need for strength in science and technology, education, and human resources in our modernization drive. These three aspects are decisive factors in a country's capacity for development and are of fundamental, far-reaching, and critical significance.

Earlier, education, science and technology, and human resources all played vital roles in the great cause of building a moderately prosperous society in all respects. The plan for these three aspects at the 20th CPC National Congress requires that the three continue to play their roles and form synergy to play a greater role. The relationship between the three is that education is the basis, science and technology are the key, and human resources play an essential role. They are mutually reinforcing and revolve around the modernization drive and the goal of building a strong modern country. As indicated in the report to the Party's 20th National Congress, the three strategies regarding invigorating China through science and education, talent fostering, and innovation will be implemented systematically. Coordinated efforts will be made to achieve the three goals of building strength in human resources, science and technology, and education, so as to build a strong modern country. As we progress, the MOST is ready to work with all relevant departments and local governments to coordinate plans on the three strategies, efforts for the three goals, and resources in the areas of education, science and technology, and human resources, as well as relevant policies, to pool all our strength in our modernization drive and test the outcomes of coordinated development throughout the process.

The actions taken in the science and technology field should center on building a strong country in science and technology. First, we must have greater coordination in top-level design. To build a strong modern country, top-level design in this field should consider education and human resources. Second, we need greater coordination between science and technology and education and more efforts in talent cultivation. We need an overall plan for these three aspects. We have set up relevant mechanisms, The MOST plays the leading role in some cases and the supporting role in others. We should assume primary responsibility when playing the leading role and cooperate with relevant departments to do a good job when playing the supporting role. The emphasis should be placed on scientific and technological professionals. China needs many scientific and technological professionals of high caliber. We need the scientific and technological manpower to be rationally structured to adapt to the needs of the modernization drive, so that we can make innovations with Chinese characteristics and make the country powerful in industries, the economy, and national strength with strong human resources and science and technology capacity. Thank you.

Science and Technology Daily:

My questions are regarding basic research. Much attention has been paid to increasing original innovation capacity, and China has made many plans related to basic research. Mr. Wang mentioned just now that efforts in free exploration and task-oriented projects should be made to boost basic research. What progress in basic research has been achieved so far? Also, how can China further improve its capacity for original innovation? Thank you.

Wang Zhigang:

Thank you for your questions, which are good ones and of great importance. As I said at the beginning, China has always attached great importance to basic research. Since the 18th CPC National Congress, the CPC Central Committee has attached even greater importance to it. General Secretary Xi Jinping said basic research is the wellspring of the entire science system and is key to all technological questions. We have always valued basic research, with breakthroughs made in many areas, especially over the decade since the 18th CPC National Congress. A feature of scientific research is that as we proceed, we find that we are not as knowledgeable as we initially thought. This is the consensus of scientists and illustrates the awe of science. At this stage, our country should attach more importance to basic research, and the participating entities and investment in this area should become more important. 

Since the 18th CPC National Congress, the CPC Central Committee and the State Council have highly prioritized basic research. General Secretary Xi Jinping has made a series of important instructions on it. The Political Bureau of the CPC Central Committee held a group study session on strengthening basic research on Feb. 21. The general secretary made an important speech at the event, stressing that strengthening basic research is imperative for higher-level self-reliance and greater strength in science and technology, and is the only path to building China into a world leader in science and technology . He also called for strengthening overall planning and coordination and increasing policy support to promote the high-quality development of basic research.

The MOST has fully implemented the important instructions of the General Secretary and the decisions and arrangements of the CPC Central Committee. We have formulated a 10-year plan for basic research. Efforts have been made to increase government investment and guide the entire society, including enterprises, local governments, and private actors, as well as donations, to increase investment in basic research and diversify investment channels. Over the years, funding for basic research has grown from 49.9 billion yuan in 2012 to 195.1 billion yuan in 2022, with an average annual growth rate of nearly 15%, nearly twice the growth rate of China's spending on research and development (R&D). In other words, all sectors saw increased investment while the growth rate of basic research has been faster.

China has made significant breakthroughs in basic research, completing a number of national major projects, such as FAST, the steady high magnetic field, and the spallation neutron source. Key projects have also been planned in fields such as quantum information, stem cells, brain science, and synthetic biology. We have progressed in quantum computing, quantum communication, and quantum measurement . We have also made key original achievements with global influence, such as the quantum computer prototype, an artificial method of synthesizing starch from carbon dioxide, and nano-confined catalysis. Carbon dioxide influences the atmosphere, which is a problem. However, if it is combined with other substances and transformed into starch using fine craftsmanship and advanced technologies, it can be applied in various industrial sectors. In doing so, waste materials will be turned into treasures through recycling. These are just a few examples of what technological advancements could bring to us. There are also many other examples concerning national development and security, healthy and sustainable industrial development, and people's lives and health. In particular, major innovation bases, major projects, and high-level teams have played a crucial role together in rapidly strengthening our capacity for original innovation.

We still face some difficulties and shortcomings as we work on basic research. The first challenge in basic research is to pose genuine questions. This is a very challenging task, as it is often said that the key lies in the question rather than the answer. If a question is asked correctly, it can lead research in the right direction. However, if the question is not asked correctly or accurately, your efforts will be much less effective. In other words, results can be achieved more easily if the question is asked correctly. We can ask fundamental questions based on major economic and social development challenges, which means getting to the source of the problem. We can also ask questions based on personal curiosity, which is free exploration. To solve major development problems in the country, both aspects should be given much attention, and we must raise scientific questions based on major challenges, weaknesses and difficulties.

Our country is currently facing technological bottlenecks and weaknesses in some sectors. Getting to the source of the problems and understanding the basic principles and methods of addressing problems requires us to focus on basic research. Developing basic research requires leveraging the roles of excellent teams and talented professionals. Genuine basic research starts with posing questions, proposing fine research methods and paradigms, and ultimately solving problems and answering difficult scientific questions. Meanwhile, it describes laws and methods. To achieve this, we need high-caliber scientists and teams in basic research, who have patriotic sentiments, and possess a sense of honor and pride as well. They should be able to answer and discover scientific problems, describe scientific laws, and have their own scientific opinions and unique insights. Their sense of honor and pride should be reflected in this aspect and be remembered for years, decades, and even centuries to come. We remember figures like Newton, Einstein, Planck and Pasteur because they made discoveries and summarized new laws, which is exactly what basic research demands.

Next, we will follow the important instructions on scientific and technological innovation and basic research given by the General Secretary. We will implement the guiding principles of his speech at the group study session of the Political Bureau of the CPC Central Committee. We will focus on major original innovations and build platforms for developing goal-oriented basic research, market-oriented applied basic research, as well as basic research based on free exploration. In doing so, we will allow everyone to have a stage to showcase their abilities and unleash their imagination and intelligence. First, we will strengthen frontier-oriented exploratory basic research. Looking forward and taking the next step is always a challenging task. Second, we need to promote strategy-oriented systematic basic research. The CPC Central Committee has proposed some major strategic goals, and it is necessary to support these goals with science and technology. The 20th CPC National Congress has made a series of plans for building a great modern socialist country, such as building up China's strength in education, aerospace, and transportation. It is necessary to provide talent and technological support to achieve these goals. We must strengthen the systematic layout of strategy-oriented basic research, just like "linking pearls into a necklace." Third, we will advance market-oriented applied basic research. We need to identify problems found in the application, get to the source of the problem, and work to find answers and methods.

At the same time, we need to optimize the structure of fundamental disciplines and support the penetration and diffusion of science and technology into various sectors. We also need to recognize that the real hope of science and technology lies in the younger generation of scientists. Therefore, we should provide more opportunities and a broader stage for young scientists to unleash their intelligence, shoulder primary responsibilities, and make significant contributions, thereby gaining recognition from the scientific community.

Finally, I want to say that basic research is a process that requires people to devote themselves wholeheartedly to research, which often means boldly exploring an entirely new field where no one has ventured before. It can be difficult to see which direction to take while pursuing development in basic research. Proceeding requires a strong foundation of scientific knowledge, excellent scientific thinking, and analytical skills. Some explorations may fail. Due to the low probability of success in scientific research, especially in scientific discoveries, scientists must be prepared for failure and persist in the face of setbacks. From the perspective of attitude and methods, the path of science is always rocky, and success is not guaranteed. An ancient saying states, "it's better to be diligent than too clever." It means that people need to be hardworking and challenge themselves constantly. Only then can they achieve significant results after persistent long-term efforts. I want to invite friends from the media to pay more attention to basic research, as well as science and technology. We should guide the public to value science and technology from a young age, encourage them to learn and make the best use of science and technology, and eventually become someone who understands and even takes pride in their involvement in science and technology. Thank you.

Zhejiang Daily:

For enterprises, innovation concerns their long-term development. The report to the 20th CPC National Congress proposed reinforcing enterprises' principal role in scientific and technological innovation. Concerning that, what will the MOST do? We are interested in whether there are any policies and measures to support enterprises, especially sci-tech enterprises. Thank you.

Wang Zhigang:

Thank you for your question. This question is fundamental; we will have Mr. Wu Zhaohui answer it.

Wu Zhaohui:

The 20th CPC National Congress made a clear decision about reinforcing the principal role of enterprises in scientific and technological innovation. The change from enterprises assuming a predominant role in technological innovation to the central role in scientific and technological innovation demonstrates at least two facts. One is that increased importance is attached to the role of enterprises in the national innovation system. The other is that enterprises will play a more prominent role in whole-chain innovation. Enterprises will not only maintain the principal role in technological innovation, application of scientific and technological achievements, and incubation of industries but will also play a greater role in basic and application-oriented research. Making enterprises play the principal role in scientific and technological innovation is a natural requirement for building greater scientific and technological strength, which can be interpreted from two perspectives. From the perspective of enterprises, as the basic unit of economic activity, they are geared toward diverse market needs and sensitive to product innovation and industrial innovation. At the same time, scientific and technological needs mainly come from enterprises, and they facilitate the commercialization of scientific and technological advances. Therefore, from this perspective, enterprises are the most dynamic force of innovation.

The second perspective is that science and technology support high-quality development. China has entered the stage of innovation-driven high-quality development, which requires enterprises, as a critical point linking innovation chains and industrial chains, to play an adhesive or even a leading role in removing impediments along the links of basic research, technological and industrial innovation. At the same time, it also requires enterprises to make more efforts in basic research, application-oriented research and research and development (R&D) on pioneering technologies, which is also the general practice and successful experience of major leading countries in science and technology.

Setting our sights on greater self-reliance and strength in science and technology, we need enterprises to take on greater responsibilities. Confronted with new requirements in the future, whether enterprises can genuinely play the principal role in innovation depends on whether they can lead more universities and research institutions to jointly accomplish and promote high-level goal-oriented research and development. It also depends on whether enterprises can establish an incentive mechanism for innovation to attract more high-level talents and jointly create market value. Moreover, it also depends on whether these enterprises will cooperate internationally and whether they can achieve win-win outcomes through opening up and innovation. In the final analysis, the solution to these key problems depends on raising enterprises' capacity for scientific and technological innovation, and ultimately, market validation is needed to test the innovation capacity of enterprises. Therefore, only through innovation can development be achieved.

According to the deployments and requirements of the CPC Central Committee, the MOST has continued to make efforts on policies, production factors and projects to support enterprises to improve innovation capacity. Specifically, stronger support has been given to decision-making, investment in R&D, scientific research organization, and the application of scientific and technological advances. Next, focusing on "reinforcement in four aspects," we will continue to enhance the principal role of enterprises in scientific and technological innovation.

First, we will reinforce the principal role of enterprises in decision-making on scientific and technological innovation. We will continue to facilitate greater and wider participation of enterprises in national scientific and technological innovation decision-making. Specifically, we will recruit science and technology experts from the business community into the national pool of science and technology experts, establish the advisory meeting system of entrepreneurs on scientific and technological innovation, and guide enterprises to carry out R&D in combination with major national strategies.

Second, we will reinforce the principal role of enterprises in R&D investment. According to statistics, enterprises' investment in R&D in 2022 accounted for over three-fourths of the total investment in R&D across China, which is a very good trend. We will continue to support enterprises to increase their investment in R&D and advance the implementation of policies on granting additional tax deductions for R&D costs and others. At the same time, we will set up a working mechanism for offering financial support to the innovation of enterprises to remove barriers along the scientific, technological, industrial and financial chains.

Third, we will reinforce the principle role of enterprises in organizing scientific research. About 80% of key national science and technology R&D programs are participated in or led by enterprises. We will continue to work on that to enable more enterprises to take the lead in organizing national science and technology programs. We will also encourage more enterprises to identify their needs in science and technology, giving play to the role of enterprises in setting the questions, providing the answers, and reviewing the results.

Fourth, we will reinforce the principal role of enterprises in the commercialization and application of scientific and technological advances. In 2022, the volume of contracted technology transactions reached 4.8 trillion yuan, and enterprises contributed over 80% of contracted technology absorption. That is an excellent signal. We will further optimize policies to increase enterprises' capacity for absorbing and commercializing scientific and technological advances. Meanwhile, we will promote effective interaction between the technology trading market and technology transfer institutions to build a high-quality and high-standard technology market to pool together all kinds of scientific and technological advances at the enterprise level. 

At last, let me emphasize again that innovation has nothing to do with its origins. All enterprises, big or small, state-owned or private, should enjoy equal rights, equal opportunities, and equal rules in the process of innovation. The MOST will provide better services and stronger support and create fair and equitable policy environments for enterprises to enhance their innovation capacity and enable them to make greater contributions to innovation. Indeed, while prioritizing enterprises' principal role in scientific and technological innovation, we will also give full play to the role of research institutes and universities. Thank you.

Wang Zhigang:

It is an essential requirement for enterprises to hold the principal position in scientific and technological innovation. China is now a socialist market economy, and enterprises are the main participants of market economies. To strengthen our science and technology to provide support for China's high-quality development, and to become a great modern country, enterprises must play a principal role. In this process, it is a requirement for the enterprises themselves to continuously improve their own independent scientific and technological capabilities. At the same time, support from the state is also an opportunity, which is an inevitable requirement for development. This year we will also work together with relevant departments, localities and high-tech enterprises. Over the years, we have done a lot of work. The number of high-tech enterprises has reached 400,000, and the number of small- and medium-sized high-tech enterprises has reached 500,000. Their R&D investment accounts for 68% of the national enterprise R&D investment. They are the pioneers of new industries and new markets, and a central pillar to ensure the healthy development of national enterprises and industries. This force needs to be further expanded and improved, both in terms of scale and quality. Thank you.

Reuters: 

Recently, ChatGPT has evoked widespread response in China. I would like to ask how the MOST views this kind of AI-driven technology. In terms of supervision, what considerations does the MOST have? Thank you.

Wang Zhigang:

Thank you for your question. ChatGPT is a hot topic. I'd like to invite Mr. Chen Jiachang to answer your question.

Chen Jiachang:

As a strategic emerging technology, AI has increasingly become an important driving force for technological innovation, industrial upgrading and improving productivity. Human-computer dialogue based on natural language understanding is an important direction for the development of AI. The ChatGPT application you mentioned has recently become a phenomenon, showing a high level of human-computer interaction. It also shows that the large natural language model already has some characteristics progressing towards artificial general intelligence (AGI) and has broad application potential in many industries.

In terms of AI development trends, there are two very obvious characteristics. First, AI has a penetrating, spreading and disruptive impact on social and economic development. Especially in the fields of scientific research, AI provides new methods and new approaches for some research in biological science, materials science and energy studies, and is leading the paradigm shift in scientific research. Second, driven by the internet, big data, supercomputing, intelligent computing, and brain and cognition-related technologies, AI technology is developing rapidly, showing a trend of group breakthroughs. The paradigm of "intelligence +" has been widely used in manufacturing, transportation, medical care and other fields. In some "dark factories ," the process is highly automated with no human intervention, which greatly improves the energy efficiency of production. In the medical field, the AI-assisted diagnosis and treatment system covers more than 3,000 common diseases and has been applied in more than 27,000 community-level medical institutions, showing that AI has achieved far-reaching penetration.

In terms of China's plan for developing R&D and the progress it has made, the Chinese government places great importance on AI. In 2017, the State Council introduced a development plan for the new generation of AI. Under the guidance of this plan, the MOST set up an office for advancing AI development, a strategic advisory committee, and a committee for AI governance. Over the past two years, the ministry has also introduced the Governance Principles for the New Generation Artificial Intelligence, and Ethical Norms for New Generation Artificial Intelligence. Key scientific and research projects on AI have been launched. We have established the "one body, two wings" R&D structure, with basic software and hardware as the "main body" and basic theories and innovative application as the "two wings." We have collaborated with leading companies to establish a number of open innovation platforms for AI, aimed at supporting small- and medium-sized enterprises (SMEs) and accelerating technological advancement across the industry. We have established 18 national innovation pilot zones, encouraging localities to introduce application scenarios with their own characteristics in line with local conditions. Our efforts have yielded significant progress. Domestic scholars have proposed the concept of "neuromorphic completeness ," and developed the heterogeneous fusion brain-inspired computing chip. Additionally, domestic scientific research institutions have developed a Chinese multi-modal pre-training model and omni-perception pre-trainer , which are among the most technologically advanced in the world.

Going forward, the MOST will recognize AI as an emerging industry of strategic importance and a new driving force for the economy. We will continue to provide support in the following aspects: First, we will work to build an open and coordinated system for AI innovation, accelerate basic theoretical studies and achieve breakthroughs in key technologies. Second, we will further integrate AI into social and economic development, improve our technologies in major application scenarios, and foster the market. Third, we will promote the development of a safe and manageable governance system. Fourth, we will advance open cooperation on AI in all areas. Thank you.

Wang Zhigang:

I would like to add that ChatGPT is indeed quite popular. Mr. Chen just briefed us on the relevant information. The journalist's questions mainly cover two aspects: how to view ChatGPT and how to deal with ethical issues. While promoting the development of AI, we should also take into account the need to strengthen ethical norms. ChatGPT itself is a large model which is based on a large amount of data, powerful computing capacity and highly efficient algorithms. As mentioned earlier, there have been advances in natural language understanding and processing, as well as the effective integration of algorithms, data and computing power.

For all new technologies, including AI, China has taken targeted measures in terms of ethics to avoid potential risks and better leverage the benefits of technology. Thank you. 

China Daily:

The report to the 20th CPC National Congress stressed the importance of expanding international exchanges and cooperation on science and technology, fostering an environment that is conducive to scientific research and up to international standards, and building an open and globally competitive ecosystem for innovation. In light of this, what plans does the MOST have for future international sci-tech cooperation? Thank you.

Zhang Guangjun: 

Science and technology play a crucial role in today's world and their significance has been recognized worldwide. The Chinese government is committed to expanding sci-tech cooperation. In the course of reform and opening-up, China has taken the lead in strengthening sci-tech openness. As Mr. Wang mentioned in his opening remarks, China is both an important participant in international frontier innovation and a significant contributor to solving global problems. I will address your question from three aspects:

First, we will actively promote new progress in mutually beneficial inter-governmental cooperation. We have established sci-tech partnerships with over 160 countries and regions, signed 116 inter-governmental sci-tech cooperation agreements and built a new pattern of comprehensive, multi-tiered and wide-ranging sci-tech cooperation. In 2022, sci-tech cooperation contributed significantly to head-of-state diplomacy and major national diplomatic events, producing a range of important cooperation outcomes. Additionally, we held 48 inter-governmental cooperation conferences on science and technology, and signed and renewed 25 sci-tech cooperation agreements. We have conducted in-depth, practical and effective cooperation with a number of countries in various fields such as the science-based fight against epidemic, as well as biodiversity, climate change and clean energy. The progress we achieved in areas such as poverty alleviation through scientific and technological efforts, innovation and entrepreneurship, technology transfer, and space information and services have benefited more countries and people, and further promoted sci-tech cooperation under the Belt and Road Initiative.

Second, we will actively engage in the global governance system, focusing on proposing China's approach and making contributions to addressing common challenges facing humanity. We will take the initiative in establishing the global sci-tech innovation agenda, including promoting international cooperation on pandemic through sci-tech efforts, building the BRICS Vaccine Research and Development Center , launching the "Green Power Future Mission" and developing plans for international sci-tech cooperation on achieving carbon neutrality. Major international science programs and projects initiated by Chinese scientists have made significant progress. In addition, Chinese scientists have made great achievements in other major science programs and projects, such as nuclear fusion reactors and the Square Kilometer Array radio telescope. China has become increasingly influential in important international sci-tech organizations, with improved contributions, voice and leadership.

Third, we have further stepped up efforts in science and technology opening-up, fostering a sound environment for openness and innovation. We have established a pilot fund that is globally oriented to support scientific research, which allows foreign scientists to lead and participate in China's national science and technology programs. This will encourage scientists from all over the world to conduct research jointly on major issues and enhance their capacity to address the problems of mankind. At the same time, we have rolled out several more open and effective policies concerning the work and life of foreigners and foreign talents in China. We have encouraged and supported Chinese research institutes, universities, enterprises, local governments and researchers to actively engage in international cooperation and exchanges. This will realize the dual drive by the government and the private sector and promote people-to-people exchanges, integration of ideas, unimpeded connectivity of production factors, and connectivity of facilities.

The 20th CPC National Congress has provided a clear direction for international innovation and cooperation in science and technology. Next, we will further strengthen the leading role of head-of-state diplomacy, actively integrate into the global innovation network, strengthen the interconnection between governments, and deepen people-to-people exchanges. We will also expand the scope and depth of international exchanges and cooperation in science and technology, establish new platforms for international science and technology exchanges and cooperation in key regions, countries and sectors, and adopt several institutional policy reforming measures at the International Center for Science and Technology Innovation, and further open up our science and technology programs to the world. Going forward, China's door of opening-up and cooperation for science and technology will only open wider. We will work hand in hand with other countries to contribute more Chinese wisdom and strength to promoting human progress and building a better world while carrying out the mission of innovation in science and technology to build a global community with a shared future . Thank you.

Red Star News:

Innovation in science and technology is rooted in people. Therefore, what progress has the MOST made in training and developing scientists and technologists? Additionally, what impact has reducing the workload of researchers had? Furthermore, what measures will be taken to stimulate innovation and development potential of researchers, particularly young talents? Thank you.

Xie Min:

The essence of innovation-driven development is talent-driven development. Talent serves as the fundamental element and the starting point as well. All science and technology innovation activities revolve around talented individuals. Since the 18th CPC National Congress, China has been continuously deepening the reform of talent assessment, improving the incentive mechanism for science and technology, thereby fully unleashing the vitality of talent. The MOST has always placed human resources development in science and technology high on the agenda, giving priority to addressing the concerns, thoughts, and expectations of scientists and technologists. We have created a favorable ecological environment for innovation in science and technology and made good progress in human resources development in science and technology.

First, talent development has achieved a simultaneous improvement in both quantity and quality. In 2022, the full-time equivalent of R&D personnel in China exceeded 6 million person-years, maintaining the world's first position for many years. The structure of the talent pool has been further optimized, with more leading talents and high-level innovation teams emerging, including more outstanding young scientists and technologists. The ability and role of science and technology talent in supporting high-quality development have been significantly enhanced.

Second, the systems and mechanisms for stimulating the vitality of science and technology talent are increasingly improving. Last year, China issued the Opinions on Improving the Incentive Mechanism for Science and Technology to strengthen incentives for missions and contributions. The MOST has worked with the Ministry of Finance, the Ministry of Education, the State-owned Assets Supervision and Administration Commission, and the Chinese Academy of Sciences to solve the problems and difficulties encountered by scientists and technologists and supported them by easing their burden, and providing encouragement. We have deepened reforms in evaluations of programs, human resources, and organizations. We have rolled out many measures to reduce the reliance on papers, education, qualifications and awards in title assessment and emphasized moral character, ability, performance and contribution. We have continued our efforts to reduce their burden and introduced more than 10 specific measures, such as reducing application forms for projects, simplifying expense claim procedures, and streamlining organizations.

We have taken further steps to enhance the development of young science and technology talent by implementing new initiatives in five aspects, namely, encouraging them to take on greater responsibilities, providing more opportunities, reducing evaluations, giving them more free time, and improving their physical and mental health. Our support enables them to play a significant role in their work. Over 80% of researchers participating in key national R&D projects are under the age of 45. 

Third, we have accelerated the internationalization of our science and technology talent pool. International talent exchanges help promote the spread and sharing of knowledge. China is also a fertile land for innovation among international scientists and technologists. We have implemented a more open talent policies and facilitated the work and life of foreign talent in China. With a focus on sustainable development, we have launched joint R&D plans and innovation, and engaged in collaborative research with more than 50 countries and regions, building a hub for attracting and nurturing outstanding talent in scientific research and innovation.

Next, in accordance with the decisions of the 20th CPC National Congress and the guiding principles of the Central Conference on Talent-related Work, the MOST will continue to take coordinated action in education development, innovation in science and technology, and human resources development. We will further implement the workforce development strategy in the new era. With the goal to accelerate the building of a world-class talent center and innovation hub, we will strengthen national mission-oriented development and coordinate domestic and international human resources. We will also work to reform the systems and mechanisms of science and technology to strengthen services, guarantees, and incentives, and create a favorable environment for innovation and entrepreneurship. We will build a large, well-structured and high-caliber pool of human resources in science and technology to provide strong talent support for China's high-level scientific and technological self-reliance. Thank you.

Hong Kong Bauhinia Magazine:  

The number of new- and high-tech development zones in China has nearly doubled compared with a decade ago. Successful outcomes from pilot reforms of national innovation demonstration zones have also been made, giving rise to practices applicable to other areas. Can you exemplify and elaborate on the situation in this field? What measures will be taken next to better leverage such zones' role in leading the development of their surrounding areas? Thank you.

Wu Zhaohui:

Establishing national new- and high-tech development zones and innovation demonstration zones are major strategic plans made by the CPC Central Committee and the State Council. The first national new- and high-tech development zone was approved in 1988, and the strategic direction of "developing advanced science and technology, realizing industrialization" has since been established. The national innovation demonstration zones, established in 2009, further carried out trial and reform work focusing on independent innovation. Since the 18th CPC National Congress, 177 national new- and high-tech development zones and 23 national innovation demonstration zones across China have fully implemented the requirements to pursue high-quality development and innovation. They have played an important role in leading the development of their surrounding areas. They have blazed a path of new- and high-tech industrialization with Chinese characteristics. They have also become a pilot for sci-tech institutional reforms, a pacesetter for innovation-driven development, and a pioneer for high-quality development. In 2022, new- and high-tech development and innovation demonstration zones sustained dynamic growth momentum and contributed 13.6% of the nation's GDP. They also rank among the highest in terms of energy conservation. Their energy consumption per 10,000 yuan of industrial-added value was two-thirds of the national average. These two kinds of zones also play a vital role in stabilizing economic growth.

A review of the development of new- and high-tech development zones and innovation demonstration zones over the past decade shows that this sector's significant achievements and breakthroughs lie in high-quality development and innovation. The high-quality development of these two kinds of zones can be seen in the following three aspects. First, high-quality innovation resources have been pooled at an accelerated pace. The R&D spending of national new- and high-tech development zones accounts for nearly half of the investment in R&D by domestic enterprises. The number of valid invention patents possessed by enterprises in such zones also accounts for nearly half of the nation's total. These zones are also home to nearly half of the national-level innovation platforms. Second, high-growth enterprises keep emerging. National new- and high-tech development zones have attracted over one-third of domestic sci-tech SMEs, one-third of domestic new- and high-tech enterprises, and two-thirds of companies listed on the Shanghai Stock Exchange Science and Technology Innovation Board. Third, high-end industries continue to grow. For example, the industrial scale of information and communication technology (ICT) in Beijing's Zhongguancun national high-tech industrial development zone accounts for 17% of the nation's total. The size of the biomedical industry in 36 new- and high-tech development zones in the Yangtze River Delta exceeds half of the nation's total. The innovation demonstration zones in the Pearl River Delta have developed a group of trillion-yuan industrial clusters such as those involving advanced materials. All these three aspects speak volumes about the significant achievements of new- and high-tech development zones.

In addition, innovation is another achievement of new- and high-tech development zones and innovation demonstration zones, and it can also be summarized in three aspects. First, new- and high-tech development zones have become the birthplace of major original outcomes. For example, the first AI chip and the first prototype superconducting quantum computer were all made in such areas. Meanwhile, new- and high-tech development zones have also become major hubs for exploring new development paths and nurturing future-oriented industries. For instance, new business forms involving smart robots, satellite navigation, and cell and gene therapy were born in such areas. The second aspect is reform. Innovation demonstration zones have always led the way in reform, and all 23 such zones have rolled out a series of original and guiding policies to promote independent innovation. For example, Beijing's Zhongguancun national high-tech industrial development zone carried out pilot programs to give more autonomy in using research funding. It also introduced reform measures allowing enterprises to use scientific research outcomes before paying related research institutions. These popular moves have created a sound social atmosphere featuring innovation and business ventures. The third aspect is about innovative measures for opening up. Both new- and high-tech development zones and innovation demonstration zones value globalized development. Over 70% of new- and high-tech development zones have introduced policies regarding international matters. They have also established over 2,200 R&D institutions overseas, which facilitates a new pattern of opening up and cooperation.

Regarding the plans for new- and high-tech development zones and innovation demonstration zones, we will follow the general requirements of fully implementing the guiding principles of the 20th CPC National Congress. We will further underscore the strategic position of these zones, enhance brand-building and improve development capacity. We will continue to make efforts in the following three aspects. First, we will keep reaching new heights based on our achievements. We will continue developing world-class enterprises and industrial clusters, enhancing the capacity for original invention and nurturing future-oriented industries to create an upgraded version of high-quality new- and high-tech development zones and national innovation demonstration zones in the new era. Second, we will keep deepening reform. Reform measures for national innovation demonstration zones have long played a leading role. We will further scale up efforts to implement innovation demonstration zone piloting and reform measures. Reform efforts in the next step will focus on two aspects: high-level sci-tech self-reliance and a high-level ecosystem for innovation and business ventures. Third, we will continue to coordinate our efforts. We will further enhance coordination between new- and high-tech development and innovation demonstration zones and tap the innovation potential of such coordination. We will create a strategic cluster to support building an innovative country and a strategic pivot to integrate into a global innovation network. We will follow the strategic direction of these three aspects, further enhance the brand-building of both kinds of zones with the aim of high-quality development and innovation, and contribute to building China's strength in science and technology. Thank you.

Chen Wenjun:

Due to the time limit, this will be the last question.

China Media Group:

The 20th CPC National Congress made comprehensive and systematic arrangements for improving systems for scientific and technological innovation . What has the MST done to boost the overall performance of China's innovation system , and what are the plans going forward? Thank you. 

Wang Zhigang:

Overall, China's innovation system is based on science, has improved, and performs well. Yet it needs constant upgrading. That is because China has transformed from making breakthroughs in some science and technology to achieving general advances. Science and technology have been central to the country's overall development.

The strength of a major country relies on its capacity for sci-tech innovation. We often say that the relationship between capacity and achievements, as well as products, is dominated by capacity. Capacity is the cause that leads to products. Therefore, one can only do what is within their capabilities. Increasing our capability is our starting point and focus, and we need to do this in accordance with the national strategy. Now, we are positioned to join the ranks of the world's most innovative countries and build China into a leading country in science and technology, developing China into a great modern country. To this end, what is important is to have systematic capacity instead of capacity in a single area. How can we improve and upgrade our ability? How can we make the innovation system sounder? A significant answer is reform. This is a key measure. Reform is needed to continuously improve the innovation system and capacity for sci-tech innovation to build China into a country of innovators. During these years, we have always kept the following in mind: reform drives innovation, and innovation drives development. Sci-tech institutional and mechanical innovation also constitutes a type of reform needed to improve the national innovation system with Chinese characteristics.

First, we will focus on national strategic goals and promote organized scientific research to form a systematic landscape. To promote systematic sci-tech innovation, we must set our sights on the global frontiers of science and technology, national economic development, the country's major needs, and people's health and safety . We have fully motivated scientific researchers by cooperating with the relevant departments. We have taken measures such as easing burdens, choosing the best through fair selection, and opening a competition mechanism to select the best candidates to undertake key research projects . We support scientific researchers in their genuine, unwavering devotion. We have adopted a level- and category-based management approach and proposed corresponding measures to make the national innovation system more efficient. Reform uncovers and solves problems through scientific research practices, further improving institutions.  

Second, we will stay mission-oriented. Building China into a country of innovators, a leading country in science and technology and a great modern country is a great goal for us and an essential mission for sci-tech innovation. We must concentrate on the mission, improve the ability system, consolidate national strategic sci-tech strength, and cultivate pro-innovation environments in the policy, law, cultural and social fields. In addition, allocating scientific research resources and ways of sci-tech appraisal should also be constantly reformed and improved to fulfill the mission.

Third, we will create an environment that encourages innovation. The innovators are not governments but universities, scientific research institutions, national labs, enterprises, and all other participants in society. These participants are willing to devote themselves to science and technology, conduct scientific research, and can secure achievements. We will strive to develop a favorable ecosystem in such fields as law, policy, culture and society to make more people interested in sci-tech innovation, understand and participate in it, and take it as their own noble cause of life. We must strive to improve the national innovation system.  

Fourth, we will coordinate the innovation layout. Unbalanced and inadequate development remains a major problem in China. The eastern, central and western regions, as well as urban and rural areas, are all different. However, all eagerly seek and hope to participate in science and technology. We need to take this into full account while making the layout. Universities, scientific research institutions, national labs, and enterprises have different roles to play. We need to let various innovators pinpoint their roles in the national innovation system, play their roles, and support and serve national goals through their sci-tech innovation practices. The national innovation system needs to coordinate basic research, application-oriented basic research, technological innovation, sci-tech applications and high-tech industrialization, and connect every link to make them perform efficiently and jointly support building China into an international leader in science and technology. In addition, diverse resources must be coordinated and allocated efficiently. All the resources of platforms, funds, the workforce and policies should be pooled to achieve national strategic goals, especially to build China into a leading country in science and technology. All the dimensions and links involved in every dimension form the innovation system. To support building China into a country of innovators and a leading country in science and technology and further to develop China into a great modern country, we need to serve the national strategic goals and interconnect various innovation activities toward the goals. In addition, we must constantly improve the national innovation system and make it perform more efficiently, and fully arouse the dynamism, vitality, and initiative of sci-tech personnel. We will encourage scientific researchers to realize their value through their work and contribute to scientific development to achieve a sense of honor in society. All of these are the focuses of our work. 

The MST will further study, grasp and implement the guiding principles of the 20th CPC National Congress, especially its arrangements for sci-tech innovation, in all our work to let science and technology play a real, irreplaceable role in China's modernization drive. 

I hope our media friends care about and support our sci-tech work. Not only before the annual two sessions, but at other times, I hope you can pay more attention to, support and advocate science and technology. In addition, I hope you can guide society to pay attention to and support sci-tech development, talent and empowerment so that science and technology can better lead development and drive it to an even higher level. Thank you. 

Chen Wenjun:

Thanks to Mr. Wang and the other speakers, as well as friends from the media. Today's briefing has now concluded. 

Translated and edited by Xu Xiaoxuan, Wang Qian, Zhang Jiaqi, Liu Sitong, Cui Can, Yuan Fang, Xu Kailin, Wang Yanfang, Yan Bin, Huang Shan, Zhou Jing, Duan Yaying, Zhang Rui, Zhu Bochen, Wang Yiming, Ma Yujia, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.