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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.

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Read in Chinese

Speakers:

Mr. Li Xiaopeng, minister of transport

Mr. Xu Chengguang, vice minister of transport

Chairperson:

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

Date:

Feb. 23, 2023

Xing Huina:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). This is the third briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we are joined by Mr. Li Xiaopeng, minister of transport, and Mr. Xu Chengguang, vice minister of transport. They will brief you on the efforts being made in moving faster to boost China's strength in transportation and striving to make transportation development a pioneer in China's modernization drive, and then take your questions.

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

Li Xiaopeng:

Thank you, Ms. Xing. Ladies and gentlemen, friends from the media, good afternoon. It is a great pleasure to attend this press conference and meet with you. On behalf of the Ministry of Transport (MOT), I would like to express to you my heartfelt gratitude for your long-standing interest in, support and help for, as well as supervision of China's transportation development.

In 2022, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, the transportation sector earnestly implemented the requirements to ensure effective COVID-19 containment, economic stability and safe development. It worked to prevent and control the pandemic in a targeted and well-conceived manner, and spared no efforts to ensure unimpeded transportation and safe production. It also worked to scale-up effective investment and solve difficulties facing businesses. As a result, the transportation sector has completed all tasks involved in its annual targets and achieved a good performance.

This year marks the first year of implementing the guiding principles from the 20th CPC National Congress. The transportation sector will earnestly act on Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the guiding principles of the 20th CPC National Congress, making both as our primary political tasks and long-term strategic missions, and implementing the guiding principles with determination.

General Secretary Xi Jinping has attached great importance to the development of transportation. He has pointed out that since the founding of the People's Republic of China, generations of Chinese people have worked in the spirit of building roads through mountains and putting bridges over rivers, and turned China into a country with vast transportation infrastructure. Today, we are redoubling our efforts to build a country with great transportation strength. Transportation development has become a pioneer in China's modernization drive. He also fully recognized the hard work, the sense of responsibility and commitment, and the significant contributions of officials and staff in the sector. General Secretary Xi Jinping's important instructions have charted the course for the transportation sector and provided fundamental principles for our work. We will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and continue implementing the guiding principles of the 20th CPC National Congress and General Secretary Xi Jinping's important instructions on transportation development. We will also work hard, shoulder our responsibilities and devote ourselves to expediting the building of a nation strong in transportation. The transportation sector will strive to be a pioneer in China's modernization drive, and make persistent efforts and new contributions toward building China into a great modern socialist country.

This year, we will formulate and roll out a five-year action plan to expedite China's transformation into a transportation powerhouse (2023-2027). We will work to prevent and control the pandemic in the transportation sector in a targeted and well-conceived manner, and ramp up efforts to ensure unimpeded transportation and safe production. We will advance the construction of integrated multidimensional transportation networks , expand effective investment in the field, improve transportation service and support capacity, and further adjust and optimize the nation's transportation structure and foster its green and low-carbon transformation. We will also expedite the building of a unified and open transportation market and promote global cooperation in the transportation sector. We will resolutely exercise full and rigorous Party self-governance, strengthen Party building, improve conduct, build integrity and combat corruption. In the coming period, we will also work to ensure sound transportation services and support for the annual sessions of China's top legislature and political advisory body.

In short, we will make concerted efforts and strive to accomplish all tasks this year, so as to live up to the expectations of the Party and the people. That concludes my introduction. Next, Mr. Xu and I will take your questions. Thank you.

Xing Huina:

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

Tide News:  

After the 19th CPC National Congress put forward the building of a nation strong in transportation, the 20th CPC National Congress stipulated the efforts to move faster to boost China's strength in transportation. What progress has been made in this regard over the past five years? What are the plans and arrangements going forward? Thank you.

Li Xiaopeng:

Thank you for your questions. Moving faster to boost China's strength in transportation is a major strategic decision made by the CPC Central Committee with Comrade Xi Jinping at its core in light of the national conditions, the overall interests and the future development. As you said, the 19th CPC National Congress put forward the building of a nation strong in transportation, and the 20th CPC National Congress noted the efforts to move faster to boost China's strength in transportation. General Secretary Xi Jinping has attached great importance to the issue. As I mentioned earlier, he stressed that, "since the founding of the People's Republic of China, generations of Chinese people have worked in the spirit of building roads through mountains and putting bridges over rivers, and turned China into a country with vast transportation infrastructure. Today, we are redoubling our efforts to build a country with great transportation strength." He also noted that "transportation development has become a pioneer in China's modernization drive." The CPC Central Committee and the State Council issued the Outline for Building China's Strength in Transportation and the Outline for National Comprehensive Transportation Network , which further improved the top-level design accordingly. The MOT has earnestly implemented the decisions made by the CPC Central Committee and the State Council, continuously advancing the work in all respects, and got off to a good start in the matter.

First, the infrastructure network continues to be improved. During the five years since the 19th CPC National Congress, which is from 2018 to 2022, fixed-asset investment in the country's transportation sector exceeded 17 trillion yuan, and China built the world's largest high-speed railway and expressway networks as well as a world-class port cluster. By the end of 2022, the total length of the country's comprehensive transportation network exceeded 6 million km. In breakdown, the operating mileage of the railway network reached 155,000 km, of which high-speed railways accounted for 42,000 km. The country had a total of 5.35 million km of highways by the end of 2022, of which expressways represented 177,000 km. China now has 21,000 quay berths for production use , including 2,751 for berths of 10,000-tonne-class or above. The length of navigable inland waterways reached 128,000 km, including 15,000 km of waterways of level three and above which can be used for ships of 1,000 metric tons or more. The number of certified civil airports across the country reached 254. Urban rail transit now runs across 53 cities in China, with operating length totaling 9,584 km. In terms of rural roads, all villages, townships and towns with the necessary conditions have access to paved roads and bus routes. Regarding the postal service, there are now postal service stations in every village, and every township has access to such services. A group of major projects has also been built and put into operation, such as the Hong Kong-Zhuhai-Macao Bridge, Beijing Daxing International Airport, Phase IV of the Shanghai Yangshan Deep Water Port and Beijing-Zhangjiakou high-speed railway line, to name a few. Construction of other major projects such as the Sichuan-Tibet Railway, Shenzhen-Zhongshan link and Pinglu Canal is also being expedited. This is the first aspect of the achievements, which is the continuously improving infrastructure network.

Second, transportation services have been continuously improved. We have promoted the quality of travel services, ensured smooth logistics flow, and pushed the rapid development of new business forms. As a result, China's key transportation indicators – including passenger and freight volume and business volume of postal and express services – rank first worldwide. In 2022, the country's commercial passenger volume hit 5.59 billion, its commercial freight volume stood at 50.6 billion tonnes, its port throughput amounted to 15.68 billion tonnes, and its container throughput exceeded 300 million twenty-foot equivalent units (TEUs). Data related to people's livelihood showed that expressway travel volume of passenger vehicles with less than nine seats surpassed 17.1 billion, and average daily ride-hailing and bike-sharing orders exceeded 20 million and 33 million, respectively. In addition, express delivery volume surpassed 110 billion, and express delivery companies handled an average of more than 300 million parcels daily.

Third, high-quality development has been promoted. The planning system in the transport sector has been advanced, as China issued a comprehensive transportation plan for the 14th Five-Year Plan (2021-2025) period, as well as the medium- and long-term plan for the highway network. In addition, scientific and technological innovation has significantly increased. We have further advanced green and low-carbon transformation, improved talent training and management, continuously deepened reform, and optimized laws, regulations, and the business environment.

Fourth, international cooperation has been boosted. Many international cooperation projects, such as the China-Laos Railway and the China-Russia highway bridge, have been completed and put into operation. China-Europe freight trains have now reached more than 200 cities across 25 countries in Europe. More than 300 international passenger and freight transit lines have been opened, and shipping services now serve all coastal countries along the Belt and Road. Domestic airlines operate regular international flights to 153 cities in 62 countries, and postal and express services connect more than 220 countries and regions worldwide.

To put it simply, during the past five years, China's comprehensive strength in the transportation sector has been significantly enhanced, with some advanced fields ranking first globally, which guarantees the building of a moderately prosperous society in all respects and the building of a modern socialist country.

Next, the MOT will formulate and implement a five-year action plan to accelerate the building of China's strength in transportation. We will mainly focus on the following 10 aspects. First, we will speed up modern transport infrastructure projects' construction and optimize their layout, structure, function and system integration. Second, we will advance service quality to achieve easier movement of people and a smooth flow of goods. Third, we will boost the integration of urban and rural transport to better serve rural revitalization and coordinated regional development. Fourth, we will highlight an innovation-driven approach and promote digitalization, intellectualization and V2X (vehicle-to-everything). Fifth, we will deepen green and low-carbon transformation, adjust its structure and develop clean transport. Sixth, we will stress safety in production, strengthen industry supervision, and guarantee security in key fields. Seventh, we will expand transport opening-up and cooperation, and facilitate its connectivity, to push forward global transport cooperation and the high-quality development of the BRI. Eighth, we will improve talent training and management. Ninth, we will enhance management capability, optimize laws and regulations, and strengthen comprehensive regulation to build a unified and open transport market and improve its business environment. Tenth, we will strengthen the Party's leadership and building in the transportation sector.

We will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and earnestly implement the guiding principles of the 20th CPC National Congress and the important instructions of General Secretary Xi Jinping on the transportation sector. We will forge ahead in building China's strength in transportation at a faster pace, let the transportation sector be a pioneer in China's modernization drive, and make new and greater contributions to the building of a modern socialist country. Thank you.

Nanfang Daily:

This year's Spring Festival travel rush was the first since China optimized its COVID-19 prevention and control measures. What was the overall performance of the transportation sector? What supporting measures did the 2023 Spring Festival Transportation Special Group take during the travel rush? Thank you.

Li Xiaopeng:

Thanks for your questions. As you said, this year's Spring Festival travel rush was the first of its kind since China's COVID-19 response entered a new stage, making it the most uncertain, complicated and challenging one in recent years. The CPC Central Committee and the State Council attached great importance to it. On Jan. 18, General Secretary Xi Jinping extended festive greetings to all Chinese people when he held nationwide virtual talks with the general public. He underscored the importance of Spring Festival travel to people's immediate interests, economic development, and social stability and made clear requests to ensure safe and sound trips during the travel rush. 

The MOT and relevant departments resolutely implemented the important instructions of General Secretary Xi Jinping, as well as the decisions and deployments of the CPC Central Committee and the State Council. A special group for the Spring Festival travel rush was set up, led by the MOT, and involved 16 ministries and units. We utilized our maximum capacity and provided our best services to coordinate epidemic prevention and control with transportation services. We also created a safe, healthy, convenient, and comfortable transportation experience for people and ensured the smooth delivery of all sorts of key materials.

This year's Spring Festival travel rush generally had the following features. First, the movement of people increased substantially. There was a sharp recovery in passenger traffic as people returned to their hometowns for family reunions, visited relatives and friends, enjoyed tourism and holidays, and traveled for business. According to incomplete statistics, passenger trips exceeded 4.7 billion, an increase of nearly 30% over 2022, the highest number for the Spring Festival travel rush since 2020. The CPC Central Committee's major judgment on the epidemic situation, major decisions on the prevention and control work, and major adjustments in prevention and control strategies have proven completely correct. The policy was successfully implemented, recognized by the people, and enormously effective. China's traffic volume hit 4.7 billion trips over 40 days, reflecting the country's mobile, developing, vibrant and hopeful nature.

Second, self-driving trips reached a record high. Amid the 40-day travel rush this year, there were about 1.184 billion vehicle trips on expressways, carrying more than 3.1 billion passengers. The daily average number of passenger cars reached 29.6 million, with the single-day tally exceeding 60 million on the sixth day of the first lunar month. The share of vehicle trips in the total transfer of personnel jumped to 66% from 47% in 2019.

Third, trips via public transport recovered significantly. It reached about 1.6 billion during the 40-day travel rush this year, an increase of more than 50% over 2022, resuming to about 50% of the level in 2019.

Fourth, transport and logistics functioned smoothly and orderly. During the 40-day Spring Festival travel rush, the transportation of key materials was maintained relatively smooth, meeting the demands of material transportation in medical treatment, energy, food, production and living, spring plowing and other fields.

Fifth, epidemic prevention and control policies were steadily implemented. The epidemic response measures during the travel rush were specified and carefully carried out. Working staff strictly implemented protection and control measures, while the public actively cooperated with them to ensure their individual health protection. Therefore, cross-infection was prevented to the maximum extent and the health of passengers and staff was guaranteed during the large-scale flow of people and logistics.

This year's Spring Festival travel rush ended successfully, with people's satisfaction and sense of fulfillment being significantly enhanced. We mainly adopted the following three measures. First, we took stronger steps to ensure safety of transportation. We carried out actions to identify and address safety hazards in key areas, strengthened our ability to cope with severe weather, and made efforts to raise people's awareness of safe travel. All these efforts have resulted in generally stable and safe transportation during the travel rush. Second, we carried out epidemic prevention and control in a targeted and well-planned manner. We put in place specified prevention and control measures for transport stations and vehicles, strengthened the protection of working staff, and implemented measures designed for combating Class B infectious diseases. Third, we enhanced the organization and arrangement of traffic capacity. In terms of transportation capacity, we strengthened the analysis, organization and arrangement in key areas at key periods to tap the potential and meet the demands of passengers. Regarding the expressway network, we enhanced monitoring and ensured smooth transport. In terms of smooth transportation and logistics, we prioritized unimpeded traffic by consolidating our work in coordination and dispatch. We maintained steady operations during the Spring Festival travel rush through these efforts. In particular, we must point out that all localities and government departments attached great importance to the travel rush. Chief officials in some provinces, autonomous regions and municipalities directly guided the work and some even personally traveled to the stations for inspections or traffic arrangement. With the concerted efforts of the Spring Festival travel rush task force, and the cooperation from railways, highways, waterways, civil aviation, the postal service, and various transport fields, as well as officials and workers at grass-roots levels, who dedicated themselves to the work, the smooth Spring Festival travel rush was guaranteed.

I would like to take this opportunity to express my heartfelt appreciation and sincere greetings to officials and workers from all departments and localities, as well as those frontline workers for their hard work and dedication, and to the public for their understanding and support. In particular, I should mention that media workers played an important role in reporting the Spring Festival travel rush in a dynamic and much deeper way. I would like to express my heartfelt thanks to them. Of course, we are well aware that there is still room for us to improve our work relating to the Spring Festival travel rush since it is very important and the requirements of the people are still high. In the future, we will make persistent efforts and continue to do better work for the Spring Festival travel rush and better meet the needs of the people. We also need your help and supervision in this respect, as well as good opinions and suggestions. Thanks.

Cover News:

As we know, transport and logistics are connected to production on one end and consumption on the other end. What has been the overall situation of the work to ensure smooth logistics since April last year? What measures will be taken next to accelerate efforts to foster a new development pattern? Thanks.

Li Xiaopeng:

Thank you for your question about keeping logistics services smooth. You are correct in stating transportation and logistics connect both production and consumption. It is an important foundation for safeguarding the normal order of people's life and production, promoting the stability of industrial and supply chains, and supporting economic and social reform, development and stability. The CPC Central Committee and the State Council have attached great importance to the work on maintaining smooth transportation and logistics. General Secretary Xi Jinping has made important instructions to ensure smooth transportation and logistics. The MOT has conscientiously implemented the instructions of General Secretary Xi Jinping and, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, set up the leading group for ensuring smooth logistics together with relevant departments. All localities have also established working mechanisms led by local authorities to ensure smooth logistics, strengthen overall planning and management, closely link supply with demand, and provide follow-up services. We have carried out a series of measures such as on-duty shifts, one-to-one coordination, and dealing with cases without delays. With joint efforts, we have achieved phased results in ensuring smooth transportation and logistics.

First, we have maintained the smooth flow on major arterial roads and ensured the unimpeded microcirculation in transportation. The expressway toll stations and service areas that were temporarily closed have all been opened. Epidemic prevention checkpoints temporarily set up on roads, waterways and locks in various localities were all closed. Meanwhile, delivery distribution centers and outlets above the county level that had been shut down nationwide have all resumed services. Stations, airports, ports, and docks are operating normally.

Second, transportation and logistics operations have returned to normal. In 2022, the country's total commercial freight volume increased by 8.2% over 2019. During the Spring Festival travel rush this year, the average daily freight volume of railways, the average daily freight flow of expressways, and the average daily cargo throughput of monitored ports all increased by more than 20% over 2019. The average number of flights confirmed by civil aviation each day returned to about 80% of that in 2019. Average daily postal delivery services increased by 159.4% compared with 2019. These figures fully demonstrate that transportation and logistics operations have returned to normal.

Third, we have maintained the smooth and orderly transportation of key goods and materials. We have strengthened cooperation with key enterprises to ensure supplies regarding energy, food, people's livelihoods, foreign trade, agricultural materials and machines, medical equipment and other key goods, providing strong support for the smooth operation of the economy and society.

Such achievements could not be made without the strong leadership of the CPC Central Committee and the State Council, the joint efforts of all member units of the leading group, and the working mechanisms of all localities. Moreover, they are attributed to the commitment and dedication of the frontline staff. Especially, media outlets including CCTV, Xinhua News Agency and People's Daily have taken the initiative to follow up our work and continuously cover related news, which has played an important role in guiding social expectations and creating a good atmosphere.

Although we have made some achievements, the situation we face in both domestic and international logistics is still severe and complicated. In the next step, we will implement the important instructions of the general secretary and fully leverage the role of the State Council's leading group for ensuring smooth logistics and its office to help build new development patterns, consolidate existing outcomes, mobilize forces in all areas, and ensure smooth transportation and logistics.

First, we need to maintain a smooth transportation network. It is necessary to have a 24-hour on-duty mechanism to strengthen the supervision of case transfer and coordination, arrange key logistics channels in time, and prevent prolonged, large-scale disruption and suspension of services.

Second, it is necessary to ensure the transportation of important goods. We need to better link supply with demand, strengthen overall planning and management, and improve emergency transportation capacity and emergency plans to safeguard the efficient and smooth transportation of key goods and promote unimpeded economic circulation. In particular, we should focus on energy, food, medical supplies and key livelihood supplies.

Third, it is necessary to safeguard smooth operation. We need to strengthen dispatching and operation monitoring, analyze problems in time, and ensure the safety and stability of transportation and logistics.

Fourth, maintaining smooth operation at the end of the logistics process is also essential. We need to improve the service network of the end distribution of urban and rural logistics, make every effort to open the last mile of goods transportation between urban and rural areas, facilitate economic circulation between urban and rural areas, and ensure production and people's regular lives.

Fifth, we need to safeguard international logistics. To ensure the smooth flow of international logistics supply chains, we should foster modern logistics enterprises with international competitiveness and strive to build an open, safe and reliable international logistics supply chain that is shared by the whole world.

All in all, under the leadership of the CPC Central Committee and the State Council, we will continue our efforts to ensure smooth transportation and logistics and provide strong support for economic circulation and development. Thank you.

Southern Metropolis Daily:

In the past three years, during the epidemic, the transportation industry faced many difficulties. What has the MOT done to help related enterprises tide over difficulties? Will there be any follow-up policies this year? Thank you.

Li Xiaopeng:

We will invite Mr. Xu Chengguang to take your questions.

Xu Chengguang:

Thank you for your questions. Transport and logistics are the lifeline of the market economy and an important guarantee for people's livelihoods. In 2022, due to multiple factors caused by the epidemic, transportation entities encountered considerable difficulties in their production and operations. The CPC Central Committee and the State Council attached great importance to that and offered key measures and assistance to them. The MOT thoroughly studied and implemented the guiding principles of the 20th CPC National Congress, and acted in accordance with the requirements of "preventing the epidemic, stabilizing the economy, and ensuring safe development." We implemented a package of policies and follow-up policies to stabilize the economy, worked with relevant departments to refine policies and measures, and increased support for enterprises affected by the epidemic. With focus on stabilizing transportation entities, we made our own contribution to maintaining a stable economic market, and keeping the economy operating within a reasonable range. Our work was mainly as follows.

First, we have strengthened policy supply and leveraged the integrated effects of policies. We have introduced policies to reduce and combine port fees, reduced coastal port navigation fees, improved tugboat fee policies, and reduced cargo dues for a set period. We have also guided all localities to comprehensively promote differentiated toll collection on expressways, strictly implemented the green channel policy for fresh agricultural products, and exempted 10% of toll fees for road freight on toll roads in the fourth quarter. These policy measures have reduced and exempted approximately 96.6 billion yuan. We have also established a special re-lending scheme for transportation and logistics in cooperation with the People's Bank of China and cooperated with relevant departments to launch over 40 relief policies such as tax reduction and fee reduction measures, deferred payments of social security fees, financial subsidies, and credit support. These policies are highly targeted, widely beneficial, and have significant integrated effects.

Second, we took multiple measures to ensure relief policies were fully utilized. We guided transportation departments in all localities to establish and improve working mechanisms, formulate detailed rules for implementation, and promote the full implementation of relief policies. We conducted comprehensive and special inspections and worked to ensure all levels of transportation authorities fulfill their management responsibilities. We dynamically published a list of support policies, strengthened policy publicity and interpretation, and helped market entities fully understand and benefit from the policies. We also strengthened the connection between the government, banks, and enterprises and enhanced interdepartmental information sharing to facilitate the maximum effectiveness of relief policies. This year, our ministry, together with the People's Bank of China and the China Banking and Insurance Regulatory Commission (CBIRC), issued a notice on further improving financial support and services in the transportation and logistics field, extending the transportation re-relending policy to the end of June 2023, expanding the policy support scope, simplifying application conditions, and shortening the reimbursement time.

Third, we have strengthened operation monitoring to ensure that the dividends of policies are fully released. We intensified monitoring over the economic operation of the industry and the business operations of enterprises and tracked the implementation of policies. We established and improved linkage mechanisms with departments such as those overseeing fiscal, taxation, and financial affairs and coordinated and solved problems in policy implementation. According to statistics, in 2022, the tax and fee burden on every 100 yuan of operating income in the transportation industry decreased by 15.4%. The transportation and logistics re-lending policy, the policy to allow deferred repayment of principal and interest for truck loans by central SOEs in the auto sector and financial institutions, and other policies have been implemented and taken effect, effectively reducing the burden on enterprises and practitioners and helping transportation and logistics market entities develop steadily and healthily.

In 2023, the MOT will thoroughly study and implement the spirit of the 20th CPC National Congress and the spirit of the Central Economic Work Conference, conscientiously implement the decisions and arrangements of the CPC Central Committee and the State Council, guide the industry to make full use of various relief policies, continue to optimize the business environment, stimulate the vitality of market players, and better serve economic and social development. Thank you.

Li Xiaopeng:

Just now, Vice Minister Xu answered in detail the question regarding helping enterprises out of difficulties. We sincerely thank the Party Central Committee and the State Council for their great attention to the difficulties encountered by transportation enterprises. We also appreciate the concern and support of friends from all walks of life, including the media, for transportation enterprises facing difficulties. In the new year, under the leadership of the Party Central Committee and the State Council, we will continue to do a good job in assisting enterprises in resolving difficulties and achieving better development. Thank you.

CNR:

General Secretary Xi Jinping attaches great importance to the project to ensure rural roads are well built, managed, maintained, and operated. What new progress has been made in this regard? What measures will be taken in the future?

Li Xiaopeng:

Thank you for the questions about the project. It is a project General Secretary Xi Jinping has personally put forward and advanced to improve people's livelihoods, win the people's support, and govern for the people's benefits. Since the 18th CPC National Congress, General Secretary Xi has made important instructions on the project three times, emphasizing that not only should rural roads be built well, but they should also be managed, maintained, and operated well. General Secretary Xi also particularly emphasized that the project has achieved tangible results in recent years, bringing people and wealth to rural areas, especially poor areas, and consolidating the people's support for the Party at the grassroots level. General Secretary Xi's important instructions highlight his deep concern for the people and inject powerful impetus into our work on improving the construction, management, maintenance and operation of rural roads. Bearing in mind General Secretary Xi's important instructions, the Ministry of Transport has continuously promoted the high-quality development of the project. By the end of 2020, all the villages, townships, and towns with the right conditions were accessible by paved road and provided with bus routes, and rural areas are no longer troubled by poor road conditions. This is a feat of historical significance. The implementation of the project has strongly supported and guaranteed the victory of the critical battle against poverty and the completion of the building of a moderately prosperous society in all respects. 

In 2022, we conscientiously implemented the decisions and arrangements of the Party Central Committee and the State Council. Throughout the year, the total fixed-asset investment in rural roads across the country reached 473.3 billion yuan, a year-on-year increase of 15.6%. Over 180,000 kilometers of rural roads were built or renovated, 10,589 dangerous rural bridges were reconstructed, and 135,000 kilometers of rural roads were reinforced to better protect vehicles and passengers under a road safety project. We also implemented 3,859 rural road projects in the form of work-for-relief, creating job opportunities for 78,000 rural laborers. In the field of rural road management and maintenance, approximately 800,000 jobs were created. By the end of 2022, the coverage rate of the road chief scheme for rural road management tasks in counties (cities, districts) had reached 98.7%, with the number of road chiefs totaling 671,000. More than 8,000 integrated routes for passenger, freight and mail transportation were opened. All these efforts have promoted the high-quality development of the project.

Going forward, we will thoroughly implement General Secretary Xi Jinping's important instructions, promote the high-quality development of the project, and accelerate the improvement of a modern rural transportation system, to better serve the overall promotion of rural revitalization and agricultural and rural modernization, and provide strong and effective service guarantees for achieving common prosperity for all. We plan to continue to promote five aspects of work in improving the construction, management, maintenance and operation of rural roads. First, we will conduct another round of rural road construction and renovation work. There are five major projects: upgrading the backbone road network, extending and improving the basic road network, enhancing safety guarantee capabilities, integrating industrial development, and improving service levels. Through these five major projects, we will accelerate the improvement of a convenient, efficient, inclusive, and equitable rural road network system.

Second, we will help rural people find local employment opportunities and increase their income. We all know that rural roads are transport infrastructure, and their construction attracts migrant workers, allowing farmers to get jobs nearby and increase their income. We must make greater efforts to promote jobs instead of giving grants and continuously increase rural road-related job opportunities.

Third, we will strengthen the management and maintenance of rural roads, improve specialization, mechanization and scale, and promote rural roads' digitalization and information management.

Fourth, we will continuously improve the service quality of rural roads. It is necessary to accelerate the construction of a three-tiered rural logistics system at village, township and county levels and further promote the integrated development of passenger, freight, and postal services, that is, the integrated development of rural passenger transport, rural freight transport, and rural express postal services. We will improve the service level by equalizing urban and rural transport access.

Fifth, we will promote the integrated development of rural roads. It is necessary to develop rural roads in tandem with the construction of supporting facilities, industrial parks, tourist attractions, and rural tourism along the way. In addition, it is necessary to vigorously develop the road derivative economy so that better roads can boost local economies, incomes and areas. Thank you.

Red Star News under Chengdu Economic Daily:

Expanding investment in transportation is an important measure to protect people's livelihoods and promote development, and it is also an effective tool to promote the stable growth of investment. What work has the MOT done in the past year to promote investment and steady growth, and what deployments has it made in the first year to fully implement the guiding principles of the 20th CPC National Congress? Thank you.

Li Xiaopeng:

Thank you for your question about investment. Last year, national transportation fixed asset investment reached 3.8 trillion yuan, a year-on-year increase of 6%, contributing to economic development. This year we will maintain a high transportation fixed asset investment level and continue to contribute our share to the economic development. Next, let me give the floor to Mr. Xu Chengguang to elaborate on this question.

Xu Chengguang:

Transport infrastructure has characteristics such as large investment scale, fast implementation, sound, comprehensive benefits, and a solid driving effect. As you said, it is an important measure to protect people's livelihoods and promote development, and it is also one of the important areas for stabilizing growth and expanding employment. In 2022, the MOT will adhere to the general principle of pursuing progress while ensuring stability, fully implement policies for stabilizing the economy and follow-up policies and invest in transport infrastructure in a moderately advanced manner. As Mr. Li Xiaopeng introduced, asset investment exceeded 3.8 trillion yuan, a year-on-year increase of more than 6%, hitting a record high. Among them, the railway network received 710.9 billion yuan of investment in fixed assets, which was the same as the same period last year. The investment in fixed assets of highways was 2.9 trillion yuan, a year-on-year increase of 9.7%. The investment in fixed assets of waterways was 167.9 billion yuan, a year-on-year increase of 10.9%. Investment in fixed assets in civil aviation exceeded 120 billion yuan, which was the same as the same period last year. It was not an easy year in 2022 for fixed asset investment in transportation to maintain a growth rate of more than 6%, keeping major economic indicators and operations within an appropriate range.

Last year, we focused primarily on three aspects of work:

First, we strengthened policy implementation. We formulated and issued policy documents aiming at expanding effective investment in transportation, including National Highway Network Planning and Opinions on Accelerating the Framework Construction of the National Comprehensive Three-dimensional Transportation Network. We also increased project reserves and preliminary work. We worked with the National Development and Reform Commission, the Ministry of Natural Resources and other relevant departments to make great efforts to solve problems such as land use and sea environment assessment for transportation projects, creating a good policy environment for expanding effective investment.

Second, we increased our efforts to promote projects. We focused on networking, supplementing the network, and reinforcing weak links in transportation. We implemented 11 major project packages, such as the National Expressway Major Corridors Connection Project , and accelerated the construction of the first batch of 16 major projects to build a country with a strong transport infrastructure. The spatial layout of the national comprehensive three-dimensional transportation network framework, consisting of six axes, seven corridors, and eight channels, came into shape. Several railways, highways, water transport and civil aviation projects were completed one after another. Regarding railways, we added 5,000 kilometers of operating range, including about 2,000 kilometers of high-speed railways. As for highways, about 70,000 kilometers of new highways were created, including about 8,000 kilometers of new expressways. Meanwhile, we added and improved 92 tonnage berths and approximately 800 kilometers of high-grade inland waterways. In terms of civil aviation, six new certified transport airports were added. Many key transportation projects, such as the Shenzhen-Zhongshan link, Sichuan-Tibet Railway and supporting highway projects, Chengdu-Lanzhou Railway, Pinglu Canal and other major projects of the Western Land-Sea New Corridor, Xiaoyangshan North Operation Area Container Terminal and supporting projects, and Nanning Airport T3 Terminal Area and supporting projects were advanced in an orderly manner. In 15 major cities, the first round of national comprehensive freight hub supplement and strengthening work was carried out, and a new round of rural road construction and renovation was launched. More than 180,000 kilometers of rural roads were rebuilt, representing a year-on-year increase of about 8%. About 13,800 dilapidated and old bridges were renovated, more than 20,000 kilometers of fine-tuning safety facilities were implemented, and more than 5,400 kilometers of disaster prevention and control projects were implemented.

Third, we raised construction funds from multiple sources. We have given full play to the leading role of central funds. In 2022, the central government arranged special funds of more than 340 billion yuan for road and waterway construction. We strived actively for local government special bonds to be used in transportation projects, strengthened cooperation with financial institutions, and gave full play to the role of policy-based development financial instruments and supporting credit financing to support transportation projects. We promoted the public-private partnership (PPP) model, steadily carried out pilot projects for infrastructure real estate investment trusts (REITs), and actively attracted social capital to participate in transportation construction.

This year, we will fully implement the guiding principles of the 20th CPC National Congress, adhering to the general principle of pursuing progress while ensuring stability. We will also actively expand effective investment in transportation and provide strong support for achieving an overall upturn in economic performance. First, we will continue to focus on networking, supplementing the network, strengthening weak links in the transportation chain, and accelerating the construction of key transportation projects. Second, we will strengthen financial and policy guarantees, effectively encouraging investment in the whole society through government investment and policy incentives. Third, we will increase pre-project work and project reserves, continuing to lay a solid foundation for expanding effective investment in transportation. Thank you.

Changjiang Daily:

Transport is the artery of the market economy and provides substantial support for serving and ensuring people's livelihoods. Over the past year, what practical work has the MOT undertaken to improve people's livelihoods and facilitate travel? Thank you.

Li Xiaopeng:

Thanks for your questions on the practical work concerning people's well-being . General Secretary Xi Jinping has pointed out that the people's aspiration for a better life is what we are striving for. In fact, all of our work on transport directly affects people's well-being. Meeting people's expectations is an important goal for us. While doing our work on transportation, we select practical work concerning people's well-being each year and advance the implementation. Since 2015, this work has been carried forward for eight consecutive years. Last year, we put forward 12 pieces of practical work concerning people's well-being, all of which have been completed. In the future, we will continue to work on that. Next, Mr. Xu will give you a detailed introduction.

Xu Chengguang:

Let me elaborate further on that. Mr. Li mentioned that transport is essential to the country's stability and people's well-being; it serves hundreds of millions of people. Our work on transport is related to work in all fields. Over the years, the MOT has upheld the people-centered development philosophy. Since 2015, we have launched a series of practical work concerning people's well-being in the transport sector every year for eight consecutive years and developed a regular working mechanism to ensure that all the practical efforts we launch every year are fully implemented.

Last year, we came up with 12 pieces of practical work concerning people's well-being, all of which were accomplished. For example, to make travel safer in rural areas, we carried out a life protection project for rural highway safety, covering 135,000 kilometers of rural highways and reconstructing 13,800 dilapidated highway bridges. To facilitate the travel of elderly people, we created over 2,700 urban tram and bus routes with services that provide care and respect for the elderly and reconstructed over 9,500 urban tram and bus stops, continuously improving travel services for the convenience of senior citizens. To deal with limited parking availability at expressway service areas for trucks, we added 21,500 parking spaces for trucks at expressway service areas and built more than 400 service centers for drivers. To address the difficulties for crew members of international voyages to change shifts during epidemic prevention and control, we coordinated with multiple parties. We tried to gain their understanding and support. During that period, 170,000 shifts of crew members on international voyages were completed, resolving the problem of being able to embark but not disembark.

In addition, we completed a series of practical projects concerning people's well-being in regard to railways, civil aviation and postal services, providing all-round and multi-dimensional services for people's travel. Regarding railways, we revised the regulations for railway passenger traffic to allow more children to enjoy preferential policies based on the real-name-based ticket system. We prevented and controlled noise pollution on railways, such as the train whistle. Regarding civil aviation, we launched special campaigns to address the temporary cancellation of flights, with the number of flights canceled within 24 hours dropping from 16,000 in June 2022 to 6,000. We accelerated the application of whole-journey luggage tracking and provided whole-journey tracking for 2.317 million pieces of luggage on 67,000 flights. In terms of postal services, we fully implemented projects to roll out express delivery services in rural areas. As a result, 95% of administrative villages now have access to delivery services. Meanwhile, we worked to safeguard the rights and interests of couriers and built over 30,000 service centers for them, such as the "warm bee post house."

In 2023, we will focus on the most pressing, most immediate issues that concern the public the most. We will launch a series of new practical initiatives concerning people's well-being in the transport sector, including the "sunshine rescue" action on expressways, special action to care for truck drivers, a project to improve service capacity at ports, and measures to provide convenient waterway passenger services. With all these efforts, we will heed the public's concerns and strive to fulfill their aspirations. We will try to provide more considerate and heart-warming services for the people and employees in the transport sector, ensure easier movement of people and a smoother flow of goods, and help people feel more satisfied, happier, and more secure. Thank you.

Xing Huina:

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

CCTV:

Last year, on the first anniversary of the second United Nations Global Sustainable Transport Conference, the Global Innovation and Knowledge Center for Sustainable Transport was inaugurated. How will the MOT use this center as a platform to promote global transport cooperation? Thank you.

Li Xiaopeng:

Thanks to the reporter from CCTV for the question. General Secretary Xi Jinping attaches great importance to promoting global transport cooperation. On Oct. 14, 2021, he announced that China would set up a Global Innovation and Knowledge Center for Sustainable Transport in his keynote speech at the opening ceremony of the second United Nations Global Sustainable Transport Conference. On Oct. 14 last year, at the first anniversary of the conference, the center was inaugurated. General Secretary Xi Jinping sent a congratulatory letter on the center's establishment. In the congratulatory letter, he pointed out that China was ready to work with other countries to make full use of this platform to promote global transportation cooperation and contribute to advancing the Global Development Initiative, implementing the UN's 2030 Agenda for Sustainable Development, and building a human community with a shared future.

Taking it as a top priority, the MOT has developed the center and implemented all the tasks. Here I announce that with the permission of the State Council, the MOT will hold the Global Forum for Sustainable Transport (2023) in Beijing from Sept. 25 to 26. The center will host the forum. During the forum, the 15th International Exhibition on Transport Technology and Equipment will also be held, and we will announce the establishment of a global coalition for sustainable transport innovations. During Sept. 25 and 26 this year, the forum, the exhibition, and the coalition will be launched together. Let me brief you on these events.

First, the forum will last for two days and will be held online and offline. The theme is "Sustainable Transport: working together to contribute to global development." The forum will focus on five topics based on the important "five principles" put forward by General Secretary Xi Jinping to advance global transport cooperation. It will host one plenary session, four themed meetings, one ministerial roundtable discussion, and relevant supporting events. Moreover, guests both at home and abroad will be invited. We aim to build a high-level official platform to advance global transport cooperation and contribute to implementing the Global Development Initiative.

Second, the 15th International Exhibition on Transport Technology and Equipment will take "innovation-driven development of global transport" as its theme. It will focus on new technologies, breakthroughs and achievements in areas including intelligent upgrades to transport infrastructure, research and the development of new transport equipment and intelligent transport operation and services. It will become a new platform for publicizing and promoting sustainable transport technologies, equipment, standards and experience.

Third, the global coalition for sustainable transport innovations will be jointly established by the center with Chinese and foreign enterprises and organizations. The coalition will include companies and institutions in the transportation, financial and scientific and technological sectors as founding members. The coalition is positioned to be an international and non-profit social organization for industrial purposes and aims to build a multi-level cooperation platform for governments, society and enterprises. The forum and exhibition will invite domestic and foreign government departments and enterprises, and public institutions to participate. Furthermore, we also welcome our friends from the media, especially those of you here today, to join and give coverage of the events. Thank you.

Xing Huina:

Today's briefing is at this moment concluded. Thanks to Mr. Li and Mr. Xu, as well as our friends from the media. Goodbye!

Translated and edited by Zhu Bochen, Wang Qian, Lin Liyao, Ma Yujia, Zhang Tingting, Huang Shan, Yan Xiaoqing, Wang Wei, Zhang Rui, Yuan Fang, Yan Bin, Li Huiru, Xu Kailin, 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:

Mr. Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council

Mr. Weng Jieming, vice chairman of the SASAC

Mr. Zhao Shitang, vice chairman of the SASAC

Chairperson: 

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

Date: 

Feb. 23, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the second briefing in the series "Embarking on the New Journey—A Government Perspective." Today, we have invited Mr. Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, to brief you on thoroughly studying and implementing the guiding principles of the 20th National Congress of the Communist Party of China (CPC) and comprehensively promoting the high-quality development of centrally administered state-owned enterprises (SOEs), and take your questions. We also have with us two vice chairmen of the SASAC, Mr. Weng Jieming and Mr. Zhao Shitang. 

Now, I will give the floor to Mr. Zhang Yuzhuo.

Zhang Yuzhuo:

Thank you. Ladies and gentlemen, good morning. It is a great pleasure to meet with friends from the press and introduce the situation of state-owned capital and SOEs.

The CPC Central Committee with Comrade Xi Jinping at its core attaches great importance to the management of state-owned capital and SOEs. The 20th CPC National Congress has drawn up a grand blueprint for advancing the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. It has also made significant arrangements for deepening the reforms of state-owned capital and SOEs, in a bid to accelerate the creation of a new development pattern and pursue high-quality development. Recently, General Secretary Xi Jinping published an important article in the Qiushi Journal titled "Several Major Issues in Current Economic Work." The article emphasizes the need to improve the core competitiveness and core functions of SOEs. Additionally, it lays out plans for a new round of actions to deepen SOE reforms, which is also a major deployment made at the Central Economic Work Conference.

SOEs are an important material and political foundation for socialism with Chinese characteristics. The SASAC has 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, firmly upholds Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and also upholds the Central Committee's authority and its centralized, unified leadership. We are working unswervingly both to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector, and continue to build up the strength, quality and size of state-owned capital and SOEs. In these ways, we aim to contribute to comprehensively building a modern socialist country.

In the past year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the SASAC and centrally administered SOEs conscientiously implemented the decisions and deployments of the CPC Central Committee and the State Council. Despite facing difficulties, we made efforts to achieve generally stable economic growth while making further progress. The operating revenues of China's centrally administered SOEs reached 39.6 trillion yuan in 2022, an increase of 9.1% year on year, while their total profits increased by 6.2% to 2.6 trillion yuan and tax payments rose by 19.3% to 2.8 trillion yuan. Remarkable achievements have been made in the reform and development of state-owned capital and centrally administered SOEs and in Party building, making important contributions to the development of the Party and the country. However, we also recognize that there is still a gap between what we have done and the expectations of General Secretary Xi Jinping, the Party Central Committee, and the people.

This year marks the first year of thoroughly implementing the guiding principles of the 20th CPC National Congress. The SASAC and centrally administered SOEs will adhere to 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, thoroughly carry out the deployments of the Central Economic Work Conference and the government work report to be deliberated by the National People's Congress, and focus on Party building, value creation, technological self-improvement, deepening reform, optimizing the layout and keeping the bottom line, to solidly promote various tasks. We will actively promote stable growth, stable employment and stable prices, and play a leading role in promoting the overall improvement of economic operation. We will thus make new and more extraordinary contributions toward building a modern socialist country in all aspects.

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

Chen Wenjun:

Thank you, Mr. Zhang. The floor is now open for questions. Please identify the media outlet you represent before asking your questions.

CCTV:

The 20th CPC National Congress drew up an ambitious blueprint for building a modern socialist country in all respects and advancing the great rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. What are the new missions and tasks for SOEs, especially centrally administered SOEs, in the process of modernization through a unique Chinese path?

Zhang Yuzhuo:

Promoting high-quality development is an essential requirement of Chinese modernization. The SASAC and central SOEs will make high-quality development their top priority. So, to summarize, we will focus on "one goal" and "two paths."

"One goal" means we will strengthen, expand, and increase returns on state-owned capital and SOEs. This is in response to the important arrangement made by General Secretary Xi Jinping and the CPC Central Committee on SOEs, including central SOEs, and to the expectations of all the Chinese people for the SASAC and central SOEs. Also, we set the goal considering that SOEs hold an important position and play a key role as the material and political foundations of socialism with Chinese characteristics. In addition, they are an important pillar and source of strength for the Party to count on in governance. 

"Two paths" means that, on the one hand, we need to increase our core competitiveness; on the other hand, we need to strengthen essential functions through optimal distribution and structural adjustments. To improve core competitiveness, there are four keywords on which we need to concentrate. First, technology. We will focus our efforts on sci-tech self-reliance and self-strengthening, establish cradles for original technologies, and improve the capabilities of basic research and application-oriented basic research at a faster pace. We will also tackle problems in core technological research that hinder the country's development, improve the input-output efficiency of research and development (R&D) investment, and constantly make breakthroughs in increasing the efficiency of our innovation system to ensure that enhanced sci-tech capabilities will further strengthen enterprises, industries and the economy. Second, efficiency. We will give better play to the guiding role of assessment based on a target management system of operational indicators, including total profits, debt-to-asset ratio, return on equity, per capita labor productivity, the ratio of R&D spending to revenues, and the ratio of net cash flow to revenues. We will also strengthen lean production management and increase operational efficiency to improve quality effectively and reasonably increase quantity. Third, talent. We will continue cultivating and making good use of talents and actively participate in the country's establishment of highlands and platforms for high-level talent gathering to cultivate greater numbers of master scholars, science strategists, first-class scientists and innovation teams, young scientists, outstanding engineers, master craftsmen, and highly-skilled workers. Fourth, branding. We will strengthen brand management to realize a transformation from "Made in China" to "Created in China," from "Chinese speed" to "Chinese quality," and from "Chinese products" to "Chinese brands."

To strengthen essential functions, we will focus on optimizing distribution and structural adjustments to consolidate the controlling role of the state-owned sector in major industries and key fields vital to national security and comprise the economy's lifeline. We will also intensify efforts to strengthen the development of the innovation capability system and the layout of new strategically emerging industries. We will also increase support for public service systems to give better play to the state-owned sector's leading and strategically supporting role.

Meanwhile, we will uphold the Party's overall leadership and strengthen Party building in enterprises. We will make efforts to advance a new round of SOE reform and strengthen state-owned assets supervision and administration to provide significant political and institutional guarantees for promoting the high-quality development of SOEs and moving faster to help Chinese companies become world-class entities.

Thank you for your question.

zhonghongwang.com:

A key report delivered at the 20th CPC National Congress further stressed that the modern enterprise system with Chinese characteristics should be improved. What achievements has the SASAC made in improving the modern enterprise system with Chinese characteristics in recent years? What is the goal of building the modern enterprise system? Thank you. 

Zhang Yuzhuo:

Thank you. Mr. Weng is responsible for reform affairs, so let's invite him to answer your questions. 

Weng Jieming:

Thank you for your questions. Corporate governance is a common concern of enterprises of all countries. We must accelerate the building of relevant systems based on the realities of both China and enterprises. The CPC's leadership in SOEs is a "major political principle," and this principle must be insisted on, General Secretary Xi Jinping noted at a national meeting on building the role of the Party within SOEs held on Oct. 10, 2016. Reform to establish a modern enterprise system within SOEs should be adhered to as well, Xi said.  These two principles have elevated the modern corporate governance of SOEs with Chinese characteristics to a new height. Centrally administered SOEs have resolutely implemented the two principles in recent years. On the one hand, we uphold and strengthen the Party's overall leadership and keep in the right direction of reforms and development of SOEs. Centrally administered SOEs have incorporated Party building into their provisions, and the secretary of Party committees or leading Party members groups simultaneously serves as chairman of the board. All centrally administered SOEs and 12,600 important subsidiaries have worked out a list of major business management matters for preliminary research and discussion by Party committees or leading Party members groups, which ensures the leading role of Party committees or leading Party members groups in terms of system, organization and procedure. 

On the other hand, we continue to improve the modern enterprise system to effectively promote the efficiency and vitality of SOEs. The status of independent market entities has been strengthened, the reform to convert SOEs into standard companies has been completed in all respects, and the task to relieve enterprises of their obligation to operate social programs is about to be completed. The establishment of boards of directors has been facilitated. Working rules for boards of directors and a series of measures and procedures for recruitment management, remuneration and treatment, and performance support of outside directors have been introduced. The board of directors should be fully established, with a majority of external directors. Important breakthroughs have been made through three institutional reforms. Contractual management for managers of centrally administered SOEs has achieved full coverage of signed contracts. More than 60% of corporate executives are selected through competitions, and medium- and long-term incentives have been expanded and improved, covering 368,000 people in total.

Practice has shown that the modern enterprise system with Chinese characteristics, which is fundamentally characterized by the two principles, meets the requirements of a socialist market economy, is effective and has overall, fundamental and far-reaching significance for SOEs. 

Next, state-owned capital and central SOEs will take the opportunity of a new round of initiatives to deepen and upgrade the reform of SOEs and implement the two principles to better transform the strength of the modern enterprise system with Chinese characteristics into effective governance. First, we will promote the integration of Party leadership into all aspects of corporate governance and classify and dynamically optimize lists of major business management matters for preliminary research and discussion by Party committees or leading Party members groups. Second, we will pay more attention to improving the corporate governance structure. We will strengthen outside director teams by appointing competent board members, ensuring that the board of directors can play a central role in decision-making. We will also implement the mechanism of delegating authority from the board to managers, establish new forms of responsibility systems in operating business, and attract more talent to participate in the governance of SOEs, so that decision-making, governance, and management of enterprises are more in line with the market economy. Third, we will promote entrepreneurship. We will improve training, selection, appointment, assessment and evaluation mechanisms for entrepreneurs of SOEs, and improve material incentives and awards and honors systems. Fourth, we will be more open to strengthening exchanges and mutual learning about corporate governance. We will strengthen exchanges between SOEs and other ownership enterprises regarding equity, operation, governance and human resources to jointly build modern enterprises. 

Thank you. 

21st Century Business Herald:

My question is about restructuring and integration of centrally administered SOEs. In recent years, intense efforts have been made to step up the restructuring and integration of centrally administered SOEs and innovate their forms. Can you introduce the changes of methods in structural adjustments of centrally administered SOEs as well as the features and achievements of the work? Going forward, do you have a preference for reconstructing and rearranging the centrally administered SOEs through professional restructuring or industrial integration? Thank you. 

Zhang Yuzhuo:

Thank you for your interest in restructuring of centrally administered SOEs. I'd like to invite Mr. Weng to answer these questions. 

Weng Jieming:

Thank you for your questions. Market-based strategic restructuring and professional integration is an effective approach to improve the layout and structure of the state-owned sector. Let me give you some data. Since the 18th CPC National Congress, 27 groups of 49 centrally administered SOEs have undergone strategic restructuring and professional integration. A total of 13 centrally administered SOEs have been established by or included under the regulation of the SASAC of the State Council. The number of centrally administered SOEs being monitored was reduced from 116 to 98, which substantially increased the competitiveness, innovative ability, control power, influence and anti-risk capacities of the state-owned economy. 

First, the ability to provide essential energy and resources has been enhanced. For instance, the establishment of enterprises such as China Mineral Resources Group Co. Ltd. and China Rare Earth Group Co. Ltd. has ensured the security of important energy and resources. The reconstruction of Sinochem Group Co. Ltd. and China National Chemical Co. Ltd. as well as the equity cooperation between China Grain Reserves Group Ltd. and COFCO Corporation has guaranteed the national grain supply and the seed industry. 

Second, the efficiency in allocating state-owned assets and resources has been improved. For example, after the inception of China Oil & Gas Piping Network Corporation (PipeChina) , a total of 89,000 kilometers of oil and gas pipelines formerly owned by three major oil and gas enterprises were reorganized, which promoted the social equality of oil and gas piping network infrastructure. Since the establishment of China Tower, the proportion of shared newly built base stations has increased from 14% to over 80%, saving 55,000 mu (3,667 hectares) of land and 176 billion yuan ($25.57 billion) of investment. 

Third, industrial competitiveness has increased. For example, China COSCO Shipping Co. Ltd . integrated from COSCO Group and China Shipping Group topped the world in many aspects including comprehensive shipping capacity and container port throughput. It was also one of the founders of Ocean Alliance , which has extensive influence. The cooperation between Ansteel and Bensteel as well as China Baowu Steel Group 's mergers and acquisitions of Magang (Group) Holding Co., Ltd. , Taiyuan Iron & Steel (Group) , Chongqing Iron & Steel (Group) and Xinyu Iron & Steel (Group) increased the concentration and competitiveness of the industry. Genertec integrated many companies in the machine tool industry and overcame bottlenecks in high-end machine tooling. The integration of resources in sectors like medical care and examination and testing was accelerated. In this way, professional enterprises take charge of specialized businesses, thus enhancing the competitive edge of enterprises. 

Fourth, the layout of emerging industries has been advanced. For example, we established the China Satellite Network Group to enhance development of new telecommunication technologies. The newly founded China Logistics promoted the construction of modern logistics systems. 

Going forward, the SASAC and the centrally administered SOEs will continue focusing on restructuring and integration, and speed up the optimization of layouts and structural adjustment of state-owned assets. We will advance our work by following market-based principles and according to functions and positions of the SOEs. We will focus on building a modernized industrial system as well as the efficient allocation of resources. 

As for your question about the preference for professional integration or industrial integration in our future work, in my view, the two methods are interconnected and reinforce each other, and cannot be separated completely. We will work with both methods so that they can promote each other. On the one hand, we will push forward professional integration of centrally administered SOEs and regional SOEs. By integrating lateral and relevant industries, one enterprise concentrates on one business and each business is run by one enterprise. In doing so, enterprises are more concentrated and we can enhance our intensive management. On the other hand, we will also press ahead with industrial integration. We will promote the development of strategic emerging industries and integrate not only centrally administered SOEs and other SOEs but also enterprises in other fields and under all forms of ownership with market-based equity cooperation. Thus, we will advance the modernization of national industries. Thank you. 

ThePaper.cn: 

Since the 18th CPC National Congress, historic achievements have been made and historic changes have occurred in the cause of the Party and the country. What important contributions have been made by central SOEs? And what roles have they played? Thank you.

Zhang Yuzhuo:

Centrally administered SOEs are the witnesses, participants and contributors to the great changes that have been made in the cause of our Party and country in the new era. The contributions made by centrally administered SOEs can be summarized in the following five aspects:

First, important contributions have been made to the steady growth of our economy. As market and economic entities, SOEs must first shoulder their economic responsibilities and make economic contributions. Over the past 10 years, centrally administered SOEs have followed the approach of high-quality development, vigorously transformed the growth model, and significantly improved the quality and efficiency of development. The benefits brought by economy of scale have reached new heights. Central SOEs' asset value increased from 31.4 trillion yuan in 2012 to 81 trillion yuan by the end of last year. Their operating revenue increased from 22.3 trillion yuan to 39.6 trillion yuan, and their total profits increased from 1.3 trillion yuan to 2.6 trillion yuan. The efficiency of centrally administered SOEs has improved significantly. Their overall labor productivity increased from 382,000 yuan per person to 763,000 yuan per person. The contributions in tax revenue of central SOEs are also prominent. Their cumulative taxes and fees accounted for around one-seventh of the country's tax revenue, and they have transferred 1.21 trillion yuan of state capital to social security funds.

Second, important contributions have been made in industrial structural optimization and upgrading. Most of the centrally administered SOEs are in major industries that are important to the economy and people's livelihoods, and many are industry leaders. Over the past 10 years, centrally administered SOEs have focused on supply-side structural reform, adjusted stock assets, improved the allocation of incremental capital, and optimized the layout and structure, which strongly promoted the upgrading and development of the industrial system. Primary responsibilities and core businesses were highlighted. As Mr. Weng Jieming just mentioned, 49 enterprises in 27 groups were reorganized or merged through market-based approaches, and 13 enterprises were newly established or accepted as central SOEs. At the meantime, 93% of sub-enterprises were engaged in core business, and the proportion of being involved in the fields related to national security, national economy and people's livelihoods surpassed 70%.The influence in key areas of strategic importance was further increased. Meanwhile, the task of reducing backward production capacity was accelerated, and the task of resolving overcapacity in steel and other sectors was completed first. We disposed of 2,041 “zombie enterprises” and solved problems for enterprises in particular difficulty, effectively revitalizing stock assets. The deployment of emerging industries was accelerated. In the past five years, investment in emerging industries of strategic importance has grown at an average annual rate of more than 20%. The development of green and low-carbon industries was vigorously promoted. From 2012 to 2021, comprehensive energy consumption per 10,000 yuan of output value in central SOEs dropped by around 33%, and emissions of sulfur dioxide, nitrogen oxide and other pollutants all fell by more than 50%.

Third, important contributions have been made in building China into a country of innovators. Scientific and technological innovation is important to the destiny of a country. Over the past 10 years, central SOEs have always given top priority to scientific and technological innovation, strengthened policy support for assessment and capital investment, and accelerated efforts to build up China's strategic capacity in science and technology. Investment in research and development was increased. Centrally administered SOEs have invested 6.2 trillion yuan in research and development, which accounted for more than one-third of the nation's total. Last year, the investment in R&D exceeded 1 trillion yuan for the first time. The building of innovation platforms was accelerated. 764 national R&D platforms and 91 national key laboratories were set up. The number of highly skilled personnel continued to increase. Centrally administered SOEs have 1.045 million scientific and technological personnel or full-time equivalent of R&D personnel, accounting for one-fifth of the nation's total, and 231 academicians of the Chinese Academy of Sciences and the Chinese Academy of Engineering, accounting for one-seventh of the nation's total. Fruitful outcomes were achieved in innovation. Breakthroughs in core technologies were made in key areas, such as power grids, communications and energy. A series of major achievements listed in the 20th CPC National Congress report, such as manned spaceflight, lunar and Mars exploration, deep-sea and deep-earth exploration, satellite navigation, nuclear power technology, new energy technology, and large aircraft manufacturing, were all led or participated in by centrally administered SOEs.

Fourth, making important contributions to deepening reform across the board. On the one hand, the reform of state capital and SOEs has been constantly deepened. To develop the socialist market economy, the three-year action plan for the reform of SOEs has been further implemented, the modern enterprise system with distinctive Chinese characteristics has been established and improved, and the reform to convert SOEs into standard companies, relieve them of their obligations to operate social programs and resolve their other longstanding issues has been comprehensively completed. Significant breakthroughs have been made in the reform to develop market-oriented operation mechanisms, so SOEs and the market economy have been better integrated and a group of modern new SOEs have been created. On the other hand, international cooperation has been continually strengthened. Focusing on the high-quality building of the Belt and Road Initiative, international business operations have been expanded. Overseas assets involved have reached 8 trillion yuan, with over 8,000 projects distributed in over 180 countries and regions worldwide.

Fifth, making important contributions to supplying products essential to people's livelihoods and guaranteeing major events. The enterprises practiced the development philosophy of putting people at the center and actively fulfilled social responsibilities. They resolutely implemented poverty alleviation tasks, with investment and introduction of aid funds totaling nearly 100 billion yuan, and helped lifted 248 key counties included in the national plan for poverty alleviation out of poverty, accounting for 42% of the total number of targeted counties assisted by central departments and organizations. They fully participated in disaster relief, playing an important role in the fight against the COVID-19 epidemic and relieving earthquakes, floods and other major disasters. They provided high-standard services to ensure and support major events, such as the 20th CPC National Congress, the 70th anniversary of the founding of the People's Republic of China, the 100th anniversary of the founding of the CPC, and the Beijing Winter Olympics, fully demonstrating the grandeur of the Party and the country.

Moving along a new journey, we will bear in mind the country's most fundamental interests, adhere to and strengthen the Party's comprehensive leadership over SOEs, and resolutely strive to make state capital and SOEs stronger, better and bigger, making greater contributions to the building of a modern socialist country in all respects .

Thank you.

Phoenix TV:

We have noticed that the report to the 20th CPC National Congress emphasized enhancing people's well-being and raising their quality of life. This puts forward new requirements for the social responsibilities of SOEs, especially central SOEs, in the new era. Can you please tell us what kind of social responsibility work central SOEs have done in recent years and how the SASAC will guide central SOEs to better shoulder these social responsibilities in the future? Thank you.

Zhang Yuzhuo:

Thank you. Mr. Zhao Shitang oversees issues related to social responsibilities. Let's invite him to answer the questions.

Zhao Shitang:

Thank you for your questions. SOEs are enterprises of all the people, and the SASAC and central SOEs are committed to meeting the needs of the people for a better life and seeking benefits for the people. In recent years, SOEs have actively fulfilled their social responsibilities to a high standard, helping to ensure and improve people's livelihoods, which has achieved positive results.

First, we have made every effort to ensure the stable supply and pricing of basic products. Currently, central SOEs account for more than 90% of the national oil and gas supply, more than 60% of the power supply, and more than 25% of the coal supply. They have built a large power grid and telecommunications network covering the whole country. In recent years, faced with the tight supply of energy and electricity, central SOEs have made every effort to allocate resources, ensure supply and stabilize prices, and maintained the security of people's electricity, gas and heating supply. Last year, under the conditions of coal-electricity price inversion and enterprise losses, central SOEs responsible for supplying electricity generated electricity at full capacity, with a cumulative power generation of 5.1 trillion kilowatt-hours, supplying 63.1% of national electricity with 54.7% unit capacity of the total. The average daily output of central SOEs in the coal sector was close to 3 million tons, a year-on-year increase of 7.6%. They made profit concessions of over 190 billion yuan in accordance with medium- and long-term agreements. The central SOEs overseeing the power grid have increased their effort to address the power shortfall of a place by utilizing surplus energy of another place, with a total of more than 2,300 cross-regional and cross-provincial support efforts organized, transferring nearly 45 billion kilowatt-hours of electricity to fill the shortfalls and ensure power supply to the maximum. Petroleum and petrochemical central SOEs, on the one hand, have vigorously promoted domestic shale gas exploration and development and offshore gas field construction, producing more than 206 billion cubic meters of natural gas, a year-on-year increase of 6%. On the other hand, under the situation of large increases in import costs, they have strictly implemented relevant national policy requirements to maintain overall price stability. As we all know, last year, the CPI increase rate in China was controlled at 2%, and the PPI increase rate was 4.1%. The relatively stable prices of basic energies such as electricity, oil, and gas played an important role in it. Central SOEs have made necessary and important contributions in this regard.

Second, we have taken the initiative to help small- and medium-sized enterprises (SMEs) solve their difficulties. Last year, SASAC actively implemented the policy package for stabilizing the economy. In May, we introduced 27 measures to help SMEs overcome difficulties and promote coordinated development to benefit the market. We have achieved the goal of "rent exemption as much as possible, rent exemption as soon as possible." Centrally administered SOEs reduced rents by 19.12 billion yuan in 2022, benefiting more than 220,000 tenants. In particular, the four enterprises --China Resources, China Rongtong Asset Management Group, COFCO Group and China Merchants Group-- each reduced rents by more than 1 billion yuan. We have improved service quality while reducing cost, and offered online services and cloud solutions. During the epidemic, power grid enterprises implemented the policy of "non-stop supply in face of arrearages," optimizing services to reduce costs. A total of 17.5 billion yuan was slashed from the price of purchasing electricity through agents. Telecom enterprises have reduced SMEs' network fees, broadband and special line fees by more than 10% since the end of 2021, saving more than 2.2 billion yuan for their clients. We have achieved "loan deferment and interest waiver, and credit data sharing in the financing sector." At the earliest time possible, we formulated and implemented a policy to postpone the principal and interest payment of consumer loans for commercial trucks for six months. Loan repayments of a total of 57 billion yuan were postponed. The State Grid Corporation's financial services app has helped 27,000 SMEs attain low-cost financing of over 90 billion yuan.

Third, we have actively supported poverty alleviation and rural revitalization. We have actively assisted in industries, employment, consumption and intellectual support. Since the 19th CPC National Congress, centrally administered SOEs have offered more than 27 billion yuan in assistance funds for free, dispatched more than 20,000 officials to help, purchased and helped sell more than 36 billion yuan of agricultural products, directly recruited more than 60,000 people, and helped more than 250,000 poor workers find new jobs. As Mr. Zhang Yuzhuo said just now, all 248 counties designated for receiving assistance have been lifted out of poverty, making an important contribution to winning the battle against poverty, promoting all-round rural revitalization and achieving common prosperity.

Fourth, we have taken the lead in promoting green transformation. We have strengthened energy conservation and emissions reduction and actively built a clean, low-carbon new energy system. Since the 18th CPC National Congress, central coal power enterprises' coal consumption has dropped from 319 grams of standard coal per kWh to 298 grams of standard coal. The proportion of clean energy installed capacity to the total has increased from 28% to 45%, and the utilization rate of new energy in power grid enterprises has exceeded 95%. We have actively participated in ecological governance. China Three Gorges Corporation has actively undertaken the task of protecting the Yangtze River. It has invested over 130 billion yuan along the river and has a daily sewage treatment capacity of 10 million tons, benefiting more than 23 million people.

Fifth, we have devoted ourselves to completing urgent, difficult and dangerous tasks. As long as the country has needs and the people have difficulties, centrally administered SOEs will be unswerving and duty-bound. In the fight against COVID-19, centrally administered SOEs in the construction, pharmaceutical, and other industries rushed to help local governments fight the epidemic and made every effort to ensure a stable supply of medicines, vaccines, and other materials. In disaster relief, centrally administered SOEs gave full play to their professional advantages and offered relief during earthquakes and floods immediately. After the Luding earthquake in Sichuan in September last year, centrally administered SOEs provided more than 6,900 rescue personnel, supplied more than 4,000 vehicles, and donated 1.29 billion yuan.

As we have embarked on a new journey in the new era, the SASAC will continuously require SOEs to adhere to the development concept that puts people first, promote the Chinese path to modernization, and accelerate the process that all share the fruits of development. First, we will further ensure supply and stabilize key energy and resource product prices. Second, we will actively accelerate rural revitalization to ensure people's livelihoods. Third, we will encourage the mutual development of industrial chains and ecosystems. Fourth, we will vigorously promote green development and low-carbon development. Thank you.

Zhang Yuzhuo:

I would like to add something to Mr. Zhao's answer to the question raised by the journalist from Phoenix TV. As you have noticed, international energy prices rocketed last year, with natural gas prices in Europe soaring more than 10-fold. I have also worked in the petroleum and gas industry. The amount of natural gas we produce ourselves is limited, around 200 billion cubic meters. Therefore, liquefied natural gas (LNG) needs to be imported in large amounts. And centrally administered SOEs shouldn't sell the imported LNG at higher prices, instead, they should sell it at rather low prices to stabilize energy prices, and that is how we kept prices at a relatively low level last year with the price inflation rate standing 2% for the 10-year period. It's fair to say that centrally administered SOEs have shouldered their social responsibilities. Thank you. 

Economic Information Daily:

As you mentioned, the three-year reform campaign for SOEs has been completed. Could you please elaborate on the milestone achievements accomplished? Did you gain any beneficial experiences and what effective measures did you adopt in the process? What are the consideration and arrangements of the SASAC for the next round of reforms? Thank you. 

Weng Jieming:

Thank you for your questions. The three-year reform campaign for SOEs from 2020 to 2022 is a major project personally planned and deployed by General Secretary Xi Jinping, generating profound significance in the reform history of SOEs. Thanks to the joint efforts of all parties, including the strong support of friends from the media, the main goals of the three-year SOEs' reform campaign have been accomplished and three notable achievements have been made.

First, the modern enterprise system with Chinese characteristics and the state-owned assets supervision system has become more established and achieved notable results. We have firmly adhered to two principles. We have strengthened the Party's leadership in improving corporate governance and completed restructuring SOEs into corporate systems. We have fully established boards of directors in 38,000 SOEs and accelerated building a governance mechanism featuring statutory powers and responsibilities, transparency, coordinated operation, and effective checks and balances. We have adhered to and improved the regulatory system for state assets that focuses on managing capital, giving full play to the advantages of the professional, systematic and law-based supervision system. We have also enhanced centralized and unified supervision and guidance over state assets that are locally operated. The proportion of state assets under unified supervision by provincial and prefecture-level departments of the SASAC reached 98% and 99%, respectively.

Second, we have made noticeable progress in the layout optimization and restructuring of the state owned sector. Over the past three years, seven centrally administered SOEs in four groups and 347 provincial SOEs in 116 groups have carried out strategic restructuring in a market-oriented manner. We added eight new centrally administered SOEs, including China Star Network and China Rare Earth Group, with them being either newly established or newly accepted as central SOEs. We have further promoted professional integration, and state-owned capital has been further concentrated in important industries, dominant enterprises and their main businesses. We have vigorously eliminated backward production capacity and disposed of non-main and non-dominant businesses and inefficient and ineffective assets. With the disposal task fully completed, a total of 306.7 billion yuan of existing assets were put to market-oriented use and the value added reached 23.4 billion yuan. We have removed social functions from SOEs and resolved issues inherited from the past. We have also stepped up efforts to optimize the layout of strategic emerging industries. As Mr. Zhang mentioned, over the past three years, centrally administered SOEs' investment in strategic emerging sectors has grown at an average annual rate of more than 20%, with the operating revenue accounting for more than 35% of the total, realizing the replacement of the old by the new and accelerating the transformation of growth drivers.

Third, improving the vitality and efficiency of SOEs has achieved remarkable results. The three systemic reforms of SOEs, marked by "the promotion and demotion of management personnel, hiring and firing of employees, and salary increase and decrease," have made a breakthrough on a large scale at multiple levels. The proportion of centrally administered SOEs and their local subsidiaries at various levels that carry out a tenure system and contract management has increased from 23.5% and 23.2%, respectively, at the end of 2020 to more than 99% at present. By the end of 2022, 38,000 management personnel of centrally administered SOEs and their subsidiaries at all levels were either reassigned or resigned due to incompetence, accounting for approximately 6.9%. There are 5,750 subsidiaries of centrally administered SOEs that have launched medium- and long-term incentives, accounting for about 94.8% of qualified subsidiaries.

General Secretary Xi Jinping emphasized that if we want SOEs to do well, we must reform them and transform them into modern enterprises . After three years of reform, the group of old SOEs has taken on a new look and unleashed fresh vitality. A group of modern new SOEs have mushroomed, thrived and embarked on a new journey of speeding up the construction of world-class enterprises. Guided by General Secretary Xi Jinping's important instructions on the reform and development of SOEs, we are more confident and determined to further deepen SOE reform and improve SOEs.

There is no end to development, and reform should not stop. The 20th CPC National Congress made specific plan on deepening state-owned capital and SOE reform. General Secretary Xi Jinping personally planned a new round of actions to deepen and upgrade SOE reform. We will firmly implement, adhere to and strengthen Party leadership in all of our work, insist on consolidating the basic socialist economic system, continue reforms to develop the socialist market economy, focus on improving the core competitiveness of SOEs and enhance their core functions, and take advantage of the momentum to carry out the new round of actions to deepen and upgrade SOE reform, which mainly includes the following three aspects.

First, we will move faster to improve the layout and structure of the state-owned sector and enhance its function of serving the national strategy. SOEs, especially centrally administered SOEs, should play a strategic supporting role and their due role in serving the country's overall interests and building a new development pattern. We will promote strategic reorganization and professional integration in a market-oriented manner, make greater efforts to deploy forward-looking strategic emerging industries, promote the digital, intelligent, green transformation and upgrading of traditional industries, improve the resilience and security level of industrial and supply chains, and promote the new type of industrialization and modernize the industrial system.

Second, we will accelerate the improvement of modern corporate governance of SOEs with Chinese characteristics and truly operate according to a market-oriented mechanism. We will consolidate the achievements of the SOE reform over the past three years and dynamically optimize the list of the pre-research items of different types at different levels concerning major business management for the Party Committee or CPC leadership group of SOEs. We will improve the quality and performance of external directors and the modern enterprise system with Chinese characteristics. We will continue to deepen the three systemic reforms and improve the level of modern management. Therefore, we are taking relevant actions to build world-class SOEs in an all-round way.

Third, we will speed up the improvement of systems and mechanisms that are conducive to the scientific and technological innovation of SOEs and accelerate the creation of innovative SOEs. Efforts should be made to solve prominent problems such as mechanisms, investment, talents, and application that restrict corporate scientific and technological innovation, improve the incentive and restraint mechanism and the talent training system, further reinforce the principal position of enterprises in innovation, and jointly build a good innovation ecology, so as to truly fulfill the role of the national team of scientific and technological innovation.

Thank you.

Hong Kong Economic Herald:

My question is about the Belt and Road Initiative (BRI). The report to the 20th CPC National Congress spoke highly of the joint construction of the BRI over the past 10 years. BRI cooperation has become a popular platform for international cooperation. This year marks the 10th anniversary of the BRI. What achievements have central government enterprises made in the Belt and Road cooperation? Regarding implementing the guiding principles of the 20th CPC National Congress, what measures and actions will be taken to promote the Belt and Road cooperation in the next stage? Thank you.

Zhao Shitang:

Thank you for your questions. As you mentioned in your questions, centrally-administered SOEs have proactively integrated themselves into China's all-round opening up over the decade since the launch of the Belt and Road Initiative. They have made great efforts to overcome risks and challenges such as the COVID-19 pandemic, profound changes unseen in a century, and downward pressure on the economy. They have achieved positive outcomes in promoting the high-quality Belt and Road cooperation, which can mainly be demonstrated in the following three aspects.

First, centrally-administered SOEs have focused on constructing infrastructure and industrial parks and have integrated themselves into and promoted the development of the local economy. Over the past decade, centrally-administered SOEs have undertaken over 200 major infrastructure projects abroad, including ports, railways and airports. In the field of transportation, General Secretary Xi Jinping witnessed the successful trial operation of the Jakarta-Bandung High-speed Railway during the G20 summit. The China-Laos Railway has assisted Laos in transforming itself from a landlocked to a land-linked hub. The Piraeus port in Greece has become a gateway to the land-sea transport route in the Mediterranean region. In the field of communications, three major telecommunication operators have provided overseas service networks to over 40 countries. In energy, centrally-administered SOEs have undertaken about 300 projects, including hydropower, wind power, and photovoltaic projects. They have completed signature projects such as the Karot Hydropower Plant in Pakistan and the Belo Monte ultra-high voltage power transmission project in Brazil, advancing the green transition of energy and low-carbon development in host countries. They have constructed and operate over 20 industrial parks abroad, such as the China-Belarus Industrial Park, helping these countries to build a platform for international industrial-capacity cooperation. At present, the China-Belarus Industrial Park hosts more than 100 enterprises. 

Second, centrally-administered SOEs have fulfilled their social responsibilities and taken proactive steps to improve local people's lives. The overseas agencies of centrally-administered SOEs have directly created nearly a million jobs for local people and several times more indirect jobs. When implementing the Djibouti Port and Hambantota Port projects, they carried out the "Blue Ocean" training program, cultivating many port management professionals. The Cabinda water supply system project in Angola enabled 600,000 local people to access clean tap water. The China-assisted project of the Africa Centers for Disease Control and Prevention headquarters has been put into use, effectively improving disease prevention, control, and monitoring and epidemic response and emergency speed. 

Third, centrally-administered SOEs have followed international rules and standards and provided high-quality products and services to benefit the world. They have actively formulated international standards in areas such as ultra-high voltage and 5G communications. Meanwhile, they have taken the lead in establishing over 100 international standards for electricity. High-speed railways, ultra-high voltage power transmission technology, the new generation of mobile communications and Hualong One nuclear power technology, have gone overseas, enabling people along the Belt and Road to enjoy high-quality products and services. 

Next, centrally-administered SOEs will keep acting on market-oriented, law-based and international principles. They will build and operate a batch of major projects focusing on green, healthy and digital development areas to a high standard, such as the Jakarta-Bandung High-speed Railway, and develop a series of "small and beautiful" projects with sound economic and social benefits. With all these efforts, they will promote Belt and Road cooperation to deliver more solid outcomes. Thank you.

Thecover.cn:

According to the report to the 20th CPC National Congress, we should speed up efforts to achieve greater self-reliance and strength in science and technology. In this regard, what achievements have been made by SOEs as the major force in scientific and technological innovation? What will be done next to further reinforce the principal role of enterprises in innovation to assist China in achieving greater self-reliance and strength in science and technology? Thank you.

Zhang Yuzhuo:

Thank you for your questions. Regarding the scientific and technological innovation of centrally-administered SOEs, I believe the past work can be generalized into two aspects. One is that glorious achievements have been made. And the other is that much remains to be done.

In terms of glorious achievements, major scientific and technological advances have been made over previous years in the following aspects. First, SOEs have made original innovations in basic and frontier sectors, including manned spaceflight, thermonuclear, the Beidou Navigation System, deep-water exploration, and the Five-hundred-meter Aperture Spherical Radio Telescope (FAST), which are all world-class original innovations. Second, a scientific and technological growth driver has been injected into building a modernized economy. A chain of innovation has been shaped to match the overall industrial chain. Core technologies in key fields have been adopted to steer manufacturing toward the medium- and high-end. China has taken the lead in applying 5G technology on a larger scale. One of the major advances last year was that the high-speed maglev train, with a designed top speed of 600 km per hour, rolled off the production line. In terms of high-end materials, a 10,000-ton-level 48K large-tow carbon fiber was put into production. The large passenger aircraft C919 was delivered. They also released a batch of other high-performance equipment. All these developments have advanced the transition from "made in China" to "created by China." Third, strong support has been provided for safeguarding science and technology security and energy security. Focusing on priority areas of strategic importance, SOEs have promoted the development of technologies in urgent need and those hindering the country's development. They have filled up a batch of gaps in science and technology. Major achievements have been made in high-temperature gas-cooled reactor demonstration projects, the Deep Sea No.1 oil production and storage facility, and the F-class 50 MW heavy-duty gas turbine. Fourth, a solid basis gives guarantee for people to enjoy the latest scientific and technological advances. Efforts have been sped up to promote breakthroughs in the fields of the seed industry and high-end medical equipment. In the fight against COVID-19, starting from scratch, SOEs developed mask machines, plodder machines and other equipment in urgent need and made an all-out effort to develop and supply testing kits and vaccines. These are all glorious achievements that have been made.

On the other hand, there is still a long way to go. Regarding science and technology, there is still a noticeable gap between China and other countries with advanced scientific and technological strengths. Central SOEs continue to have significant potential for solving core technical difficulties. Technology determines the future of businesses, and the businesses of the future. Looking ahead, we will accurately grasp the strategic position of central SOEs in China's overall sci-tech innovation, strengthen advantages, shore up weak links, keep up with the frontiers, enhance enterprises' dominant position in sci-tech innovation, and strive to create innovative SOEs.

We will focus on three areas. First, we will continue to make new breakthroughs in core technologies. We will develop a source of original technologies and promote high-quality breakthroughs in core technologies. We will increase technical investment in traditional manufacturing upgrading and strategic emerging industries, as well as in key areas such as integrated circuits and industrial machine tools, and improve our capacity for basic research and applied basic research. Second, we will secure new breakthroughs in improving the input-output efficiency of sci-tech research and development. We will further optimize the input structure and prioritize sci-tech output, achievements, applications, and the industry. We will establish a results-oriented sci-tech innovation work system, improve the mechanism for the commercialization and application of sci-tech advances, accelerate technological iteration and upgrading, and develop a more effective mechanism for sharing the benefits of sci-tech achievements so that sci-tech advances can be applied and researchers can be rewarded. Third, we will continuously make new breakthroughs in enhancing the efficacy of the innovation system. We will participate in national decision-making on sci-tech innovation in a broader and deeper manner, strengthen the driving force of major projects, make good use of platforms such as national laboratories and innovation consortiums, support qualified enterprises in integrating and transforming into research institutes and application-oriented research institutes, establish industrial research institutes, and lead the deep integration of industry, academia and research.

Thank you.

Chen Wenjun:

Due to the time limit, this will be the last question.

People's Daily:

As we know, since the national meeting on building the role of the Party within SOEs was held, the Party's leadership in central SOEs has been continuously consolidated, and Party building has also been strengthened. What major progress has been made in this regard, and what are the main plans for the work going forward? Thank you.

Zhang Yuzhuo:

Thank you. On Oct. 10, 2016, General Secretary Xi Jinping attended the national meeting on Party building in SOEs and delivered an important speech. Over the past seven years, guided by the principles of General Secretary Xi Jinping's important speech, the SASAC and central SOEs have comprehensively strengthened Party building in SOEs, sincerely fulfilled their responsibilities to exercise full and rigorous governance over the Party at various levels, and fundamentally improved the political ecology of enterprises. The SASAC and central SOEs have undergone transformative changes related to function orientation, development philosophy, development mode, and work focus. Everyone has attached more importance to the Party's leadership in SOEs, as Party leadership in SOEs can be traced back to China's Constitution. Article 1 of the General Principles of the Constitution stipulates that the leadership of the Communist Party of China is the defining feature of socialism with Chinese characteristics, so it is necessary to strengthen the Party's leadership in SOEs. Specifically, achievements have been made in six respects. First, more firm and conscious efforts have been made to uphold Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole, as well as uphold the Central Committee's authority and its centralized, unified leadership. Second, the Party's overall leadership over SOEs has been organized, institutionalized and concretized. Third, a group of politically strong and highly competent enterprise leaders has been cultivated. Fourth, the foundation for Party building at the grassroots level has been thoroughly consolidated. Fifth, the publicity and ideological work under a new situation have been strengthened. Sixth, further efforts have been made to exercise full and rigorous governance over the Party.

The practice has proved that upholding the Party's leadership and strengthening Party building is a proud tradition, the "root" and "soul," and a unique strength of SOEs. The 20th CPC National Congress made major arrangements to advance full and rigorous Party self-governance unswervingly. SOEs should highlight one theme and focus on five key points. The one theme is to let high-quality Party building lead and guarantee the high-quality development of central SOEs, and strive to establish a Party building pattern in the SASAC and central SOEs that matches the system of exercising full and rigorous Party self-governance, coordinates with the modern enterprise system with Chinese characteristics, and accords with the central reform and development tasks of enterprises, so as to provide a political guarantee for developing world-class enterprises at a faster pace. The five key points are to strengthen organization, team building, the exercise of full and rigorous Party self-governance, responsibility, and the publicity and ideological work. Thank you.

Chen Wenjun:

Thanks to Mr. Zhang, Mr. Weng and Mr. Zhao, as well as friends from the media. Today's briefing is hereby concluded. Goodbye. 

Translated and edited by Wang Yiming, Wang Wei, Li Xiao, Wang Qian, Yang Xi, Zhou Jing, Liu Jianing, Dong Qingpei, Liu Sitong, Zhang Rui, Yuan Fang, Xiang Bin, Zhang Junmian, Qin Qi, Yan Bin, Huang Shan, Xu Kailin, Wang Yanfang, Xu Xiaoxuan, 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. Tang Renjian, director of the Office of the Leading Group for Rural Affairs of the CPC Central Committee, and minister of agriculture and rural affairs

Mr. Liu Huanxin, deputy director of the Office of the Leading Group for Rural Affairs of the CPC Central Committee, member of the CPC Leadership Group of the Ministry of Agriculture and Rural Affairs, and administrator of the National Rural Revitalization Administration

Mr. Wu Hongyao, deputy director of the Office of the Leading Group for Rural Affairs of the CPC Central Committee, and member of the CPC Leadership Group of the Ministry of Agriculture and Rural Affairs

Chairperson: 

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

Date: 

Feb. 14, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). 2023 marks the first year of implementing the guiding principles of the 20th National Congress of the Communist Party of China (CPC). We will hold a series of themed press conferences, inviting leaders of relevant departments to introduce the ideas, measures, progress and achievements in implementing the guiding principles of the congress. We named the series “Embarking on the New Journey—A Government Perspective,” and we welcome your attention. Today, we are holding the first press conference in the series, to introduce and interpret the newly unveiled the "No. 1 central document" for 2023 as well as answer your questions. Present at the press conference are: Mr. Tang Renjian, director of the Office of the Leading Group for Rural Affairs of the CPC Central Committee, and minister of agriculture and rural affairs; Mr. Liu Huanxin, deputy director of the Office of the Leading Group for Rural Affairs of the CPC Central Committee, member of the CPC Leadership Group of the Ministry of Agriculture and Rural Affairs, and administrator of the National Rural Revitalization Administration; and Mr. Wu Hongyao, deputy director of the Office of the Leading Group for Rural Affairs of the CPC Central Committee, and member of the CPC Leadership Group of the Ministry of Agriculture and Rural Affairs.

Now, I will give the floor to Mr. Tang Renjian.

Tang Renjian:

Ladies and gentlemen, good morning. With the arrival of spring, farmers are once again busy with work. On Feb. 13, Xinhua News Agency was authorized to issue the "Opinions of the Central Committee of the Communist Party of China and the State Council on Comprehensively Promoting the Key Work of Rural Revitalization in 2023," or the No. 1 central document for 2023. This is the 20th consecutive No. 1 central document released by China's central authorities to guide the work on agriculture, rural areas and rural residents since the beginning of this century. Through the document, the CPC Central Committee reiterated its commitment to the work on agriculture, rural areas and rural residents, sending a strong signal of prioritizing and boosting agriculture. Now, I would like to briefly introduce the document.

First, the background in drafting the document. 

Over the past year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, we have coordinated the COVID-19 response and agricultural and rural development, effectively addressed multiple challenges, kept the fundamentals of agriculture stable, and consolidated the “ballast” for the work on agriculture, rural areas and rural residents, thus providing a foundation for overall economic and social stability. First, China has secured another bumper harvest. The country's grain output totaled 1.3731 trillion jin (686.55 billion kg) in 2022, up 7.4 billion jin (3.7 billion kg) compared to the previous year and again setting a new high. The increase in the production capacity of soybeans and other oilseed crops exceeded projections. Hog production remained stable. The market supply and prices of meat, eggs, milk, fruit, vegetables and fish were stable throughout the year. Second, the gains in poverty alleviation have been further consolidated. The monitoring and assistance mechanism has been continuously improved, industrial and employment assistance has been strengthened, and the risks of returning to or falling into poverty have been effectively defused. We have maintained the bottom line of ensuring no large-scale return to poverty. Third, the incomes of farmers maintained steady growth. The per capita disposable income of rural residents surpassed the milestone of 20,000 yuan, reaching 20,133 yuan ($2,937), an increase of 4.2% in real terms, 1.2 and 2.3 percentage points higher than the growth rates of GDP and per capita disposable income of urban residents, respectively. Fourth, solid steps have been taken to promote priorities for rural revitalization. The development of rural industries has been boosted, initiatives to improve rural infrastructure have been launched, the level of rural governance has been continuously improved, the reform of rural areas has been advanced, and rural society has been stable and peaceful.

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, and proposed for the first time moving faster to build up China’s strength in agriculture. At the annual central rural work conference held at the end of last year, General Secretary Xi Jinping, with the overall strategy of national development and rejuvenation in mind, systematically expounded a series of major theoretical and practical issues on moving faster to build up China’s strength in agriculture, promoting the modernization of agriculture and rural areas and advancing rural revitalization across the board, which provided fundamental principles and guidelines for drafting the No. 1 central document for 2023 and delivering a satisfactory performance in the work on agriculture, rural areas and rural residents on the new journey of the new era. General Secretary Xi Jinping emphasized that a country must first strengthen agriculture to make itself strong, and only when agriculture is strong can the country be strong . He noted that the most challenging and arduous tasks we face in building a modern socialist China in all respects remain in our rural areas. He said that addressing the issues related to agriculture, rural areas and rural residents should have a central place in the work agenda of the Party , and we should mobilize efforts and resources across the Party and the society to advance rural revitalization across the board, accelerate the modernization of agriculture and rural areas, move faster to build up China’s strength in agriculture, and build a beautiful and harmonious countryside that is desirable to live and work in, so as to lay a solid foundation for building a modern socialist country in all respects.

Second, the main content of the document.

Implementing the guiding principles from General Secretary Xi Jinping's important speeches and following the arrangements and requirements of the CPC Central Committee and the State Council, the document fully puts the guiding principles of the 20th CPC National Congress into action. It aims to expedite the efforts to build China's strength in agriculture. It focuses on rural revitalization, with eyes both on the present and future, and features conciseness, practicality, and innovation. The document centers closely on the benchmark issues and urgent matters involved in comprehensively promoting rural revitalization and specifies key tasks and policy measures in the field. It consists of nine sections and 33 items, and its main content can be summarized as completing basic tasks, advancing rural revitalization, and strengthening related support.

In terms of completing basic tasks, the document underlines the effort to ensure the nation's food security and that people do not sink back into poverty in large numbers. First, it stresses the need for stable production and adequate supplies of grains and other important agricultural products. It stresses that we must boost the construction of agricultural infrastructure and strengthen support for agricultural science, technology, and equipment, in a bid to ensure that the country's annual grain output remains over 650 million metric tons. Second, the document underscores the tasks of strengthening the internal growth momentum of areas and people that have shaken off poverty, stabilizing and improving supportive policies, and ensuring that people do not sink back into poverty in large numbers.

In terms of advancing rural revitalization, the document centers on the general requirements of this endeavor and stresses efforts to foster rural development, construction, governance and other significant issues. First, it stresses bolstering high-quality rural industries and developing new industries and business forms in rural areas. Second, it emphasizes boosting employment among rural residents and increasing their incomes, enhancing the efficiency of agricultural businesses, giving rural residents greater property rights and interests, and expanding channels for them to gain additional income. Third, in line with rural areas' goal to have basic access to modern lives, the document stresses building a beautiful countryside that people enjoy living and working in. Fourth, it emphasizes improving the rural governance system led by Party organizations and enhancing the efficiency of rural governance.

In terms of strengthening related support, the document stresses reinforcing organization and guidance. It emphasizes strengthening policy guarantees, institutional innovation, and the Party's leadership in all the work concerning agriculture and rural areas and residents.

In general, this year's document focuses on implementation and highlights the guiding role of the arrangements and the targeted nature of policy measures. It is not only a "to-do list" that specifies the priorities of our work this year but also a "handbook" that guides our efforts to comprehensively advance rural revitalization.

Next, my colleagues and I will take your questions.

Chen Wenjun:

Thank you, Mr. Tang. The floor is now open for questions. Please indicate the media organization you work for before raising questions.

CCTV:

At the end of last year, the central rural work conference made arrangements to accelerate the building of strong agriculture. What does it entail and what are the basic requirements of this endeavor? Thank you.

Tang Renjian:

Thank you for your question. This is a crucial issue and comprises the essence of the document. Accelerating the building of strong agriculture is a strategic arrangement made for the work concerning agriculture, rural areas and rural residents in the new era by the CPC Central Committee with Comrade Xi Jinping at its core. It was made to coordinate China's internal and international imperatives and build China into a great modern socialist country in all respects. It clarifies the historical status and future goals of the work concerning agriculture, rural areas, and rural residents in the overall drive of China's national rejuvenation.

Building strong agriculture involves many facets. It involves the growth of productivity and the development of production relations. It also concerns the comprehensive upgrading of agriculture, progress in every sector of rural areas, and the well-rounded development of rural residents. For one thing, China must meet the standard qualifications for strong agriculture. Despite differences in resources, institutional environment, and agricultural capacity, foreign countries with strong, modern agriculture bear common features. We need to follow the general principle of modern agriculture development, find out where we have fallen short, make up for our weaknesses, and leverage our advantages in a bid to build an agricultural sector that is strong in supply, sci-tech equipment, business systems, industrial resilience and overall competitiveness. In addition, Chinese characteristics need to be considered based on our national conditions. Agricultural planting and animal husbandry require an appropriate natural environment, which is crucial for agriculture. Likewise, the endeavor of building strong agriculture also needs to fit our national and agricultural conditions, and we need to rely on ourselves to solve practical problems. This is very important. China has a vast population but limited land resources. Its farming civilization has a long history, but our time demands greater harmony between humanity and nature. These three aspects determine that we must be self-dependent in securing our food supply. To develop agriculture, we must rely on the two-tier management system, which integrates cooperative management with household contract management. We must also advance eco-friendly and low-carbon agriculture, sustain our farming civilization, and promote prosperity for all. These statements reflect China's characteristics as well as its national and agricultural conditions. We need to explore a path of agricultural modernization with distinctive Chinese features.

Building China's strength in agriculture is a long-term task and a systematic project. This requires attention to methods while grasping timing, degree, and effectiveness. First, it is necessary to accurately understand the layout of rural work regarding agriculture, rural areas, and rural residents. Building China's strength in agriculture is in line with advancing rural revitalization across the board, with the same goals and unified processes. Currently, the focus should be on advancing rural revitalization on all fronts, ensuring the connection between policy and work systems, and maintaining work continuity without changing the focus, theme, or channel. Second, it is necessary to strengthen overall planning. We should accelerate the study and formulation of plans to speed up the building of China's strength in agriculture, do a good job of overall planning and systematic arrangements, and connect with existing plans. It should be neither a completely new plan nor disconnected from existing ones, but rather a clear roadmap and a working plan with a solid and effective implementation that is both connected and innovative. We must work out such a plan. Third, it is necessary to highlight practical results and effectiveness. Our work’s emphasis should be on solving the most urgent and pressing issues of local agricultural and rural development, focusing on specific practical issues raised by farmers, including some key small matters, and making sustained efforts. The goal is to make rural people feel a tangible sense of gain, happiness, and security in the process of rural revitalization. Thank you.

Farmers' Daily with Farmer.com.cn:

Ensuring national food security is the top priority of rural work in agriculture, rural areas, and rural residents. What is the current national food security situation in China? In order to ensure national food security, what specific measures will be taken next? Thank you.

Tang Renjian:

Thank you for your questions. Ensuring national food security is the primary task of building China's strength in agriculture. Regarding the situation you asked about, we all know that we faced the intertwined and overlapping challenges of the pandemic and disasters last year. International grain prices fluctuated dramatically, and there was a severe situation caused by the impact of high agricultural material prices. Nevertheless, China's grain production has achieved another harvest, with a stable output of over 1.3 trillion jin (650 million metric tons) for eight consecutive years. We have made the food supply more stable, better, and more secure for more than 1.4 billion Chinese people, which has provided important support for stabilizing expectations, prices, and confidence. However, we must also see that the pressure to keep our rice bowls safe is increasing due to the large population base, the upgrading of consumption, the growth in food demand, and the increasing uncertainty and instability of global agricultural trade. Next, we must take multiple measures and comprehensive actions to strengthen the foundation of food security from all aspects.

In terms of goals, we will focus on stabilizing the grain acreage, increasing the per-unit crop yield, and striving for greater output. First, we must stabilize the grain acreage, which is the foundation of grain production. We will promote multiple cropping in southern provinces, implement projects to increase the per-unit yield of soybeans and corn (because the per-unit yield of both is now relatively low), and ensure that grain output remains above 650 million metric tons by carrying out the establishment of farmland with an annual yield of 1000 kg per mu. At the same time, we will intensify efforts to expand the planting of soybean and other oil crops, solidly promote the belt-like compound planting of soybeans and corn, support the rotation of grain and soybeans in Northeast China and the Huang-Huai-Hai region, and steadily develop and utilize saline-alkali land for planting soybeans. Pilot projects in some areas have shown good results, and we have opened up a new resource to expand production and increase output with multiple oil crops. Second, we must increase production capacity. The CPC Central Committee and this year's No. 1 central document have made it clear that we must launch and implement a new round of action to increase grain production capacity by 50 billion kilograms, concentrate necessary resources, and use all means to promote the early attainment of a new level of grain production capacity. Typically, every 50 billion kilograms represents one further level, which means we have to reach over 700 million metric tons (from 650 million metric tons). In addition, we must establish a broad concept of food, formulate plans by sector, accelerate the building of a diversified food supply system, and enrich the sources of food varieties.

In terms of measures, we will focus on strengthening the material foundation for crop production based on farmland management and technological application. One is to strengthen infrastructure construction. We will strictly control the usage of farmland, resolutely ensure the area of farmland remains above the red line of 120 million hectares, complete the annual task of new construction and upgrading of high-standard farmland, and promptly formulate an implementation plan to gradually develop all permanent basic cropland into high-standard cropland. This is a big move, involving 103 million hectares of permanent basic cropland. We will use modern agricultural facilities to better ensure food security. The second is to strengthen the support of scientific and technological equipment. We will promote the breakthrough of key and core agricultural technologies, deeply implement the seed industry revitalization action, build up our strength in agricultural technology at a faster pace, focus on improving per unit crop yield, and come up with comprehensive solutions for integrating good soil, good crop varieties, good methods, good machinery, and good mechanisms for each variety, and rely on science and technology to increase the grain output and capacity.

In terms of policy, the focus is to improve institutional safeguards for farmers to grow grain and make a profit and for local governments to take responsibility for grain production. I just talked about the point of strengthening the material foundation for crop production based on farmland management and technological application. The point I’m talking about now emphasizes the improvement of the institutional assurance for farmers to grow grain and make money and for local governments to take responsibility for grain production. The two points come down to these four words: farmland, technology, profit, and responsibility. The first is policy guidance. We need to improve the income guarantee mechanism for grain growers, continue to raise the minimum purchase price of wheat, reasonably determine the minimum purchase price of rice, stabilize rice subsidies, improve corn and soybean producers' subsidies, increase soybean subsidies, and promote the expansion of policy-based purchase and storage of soybeans and market-based purchases. We will gradually expand the implementation scope of full-cost insurance and planting income insurance for rice, wheat, and corn and improve the mechanism for ensuring the supply and stabilizing the price of agricultural materials. At the same time, it is necessary to improve the interest compensation mechanism for major grain-producing areas and increase the scale of rewards for major grain-producing counties. The second is to ensure fulfillment of responsibilities. This year, we will continue to assign the grain production targets and tasks approved by the State Council to all provinces, autonomous regions and municipalities, and ensure the planting area set for each variety is not compromised. We will strictly assess the performance of provincial Party committees and governments under the accountability system for farmland protection and food security, and promote the implementation of policies and measures through the fulfillment of responsibilities. Thank you.

Global Times:

Consolidating and expanding the achievements in poverty alleviation is a prerequisite for comprehensively promoting rural revitalization. What is the current progress in this regard? What measures will be taken next to help people who have been lifted out of poverty to improve their lives? Thank you.

Liu Huanxin:

Thank you for your concern and attention to consolidating and expanding the achievements of poverty alleviation.

2022 is the year of pursuing rural revitalization by building on the success in poverty alleviation in an in-depth manner. Through the joint efforts of all parties, our poverty alleviation achievements are further consolidated and expanded. The foundation of poverty alleviation is more solid and the results are more sustainable, which are mainly reflected in three aspects. First, there have been no people slipping back into poverty in large numbers. The monitoring and assistance mechanisms to prevent people from slipping back into poverty have played an effective role. The time spent on poverty identification and confirmation has been shortened to less than 15 days, and early detection, early intervention, and early assistance have been realized. The capacity for guaranteeing access to compulsory education, basic medical services and safe housing for impoverished rural residents, and the capacity for providing safe drinking water and meeting people’s basic needs continue to be consolidated and improved. Second, the employment situation of the labor force that was lifted out of poverty remains stable. In 2022, 32.779 million of them enjoyed full employment, an increase of 1.329 million from the end of 2021, exceeding the annual target by 2.587 million. Third, the income of areas and people that have been lifted out of poverty has increased rapidly. In 2022, the per capita disposable income of farmers in areas that have been lifted out of poverty reached 15,111 yuan, an increase of 7.5%, which is 1.2 percentage points higher than the growth rate of the per capita disposable income of farmers nationwide. The per capita net income of those that have been lifted out of poverty reached 14,342 yuan, a year-on-year increase of 14.3%, 8 percentage points higher than the growth rate of the per capita disposable income of farmers nationwide.

General Secretary Xi Jinping called for efforts to consolidate and expand our achievements in poverty alleviation and help areas and people that have just shaken off poverty build their own momentum for growth in his report to the 20th CPC National Congress. The task of consolidating and expanding achievements in poverty alleviation has continued to be put high on the agenda in the No. 1 central document for 2023 as one of the bottom-line tasks. We will thoroughly implement the decisions and arrangements made by the CPC Central Committee and the State Council and intensify efforts to carry out all work related to consolidating and expanding achievements in poverty alleviation, in a bid to further improve the livelihoods of people lifted out of poverty.

First, we will strengthen monitoring to ensure the implementation of poverty assistance work. We will carry out regular monitoring and centralized screening of monitored targets, further improve the accuracy of identification and targeted assistance, and promptly address the potential risks of returning to poverty due to epidemics , illnesses or disasters. We will provide classified assistance and implement development-oriented poverty reduction measures for monitored households that are able to work and willing to do so. We should also enhance social security guarantees for those who are unable to work.

Second, we will foster driving force for development. We should regard increasing the income of people lifted out of poverty as a fundamental measure, take accelerating the development of counties lifted out of poverty as the main direction, focus on industrial employment and give full play to the role of development, so as to further narrow the gaps in income and development, and help areas and people lifted out of poverty build their own momentum for growth. We will make good use of the central government's subsidies for rural revitalization to improve weak links of poverty-stricken areas in technology, infrastructure, marketing and other industries. We will deepen cooperation in labor services coordination between eastern and western regions, create more jobs for people lifted out of poverty to prevent them from returning to poverty, and ensure that the scale of employment for those lifted out of poverty remains stable at over 30 million .

Third, we will further improve relevant policies. We will fully implement the policy of effectively linking our achievements in poverty alleviation and rural revitalization, and continue to give greater priority to policies in key counties for rural revitalization and in key areas such as poverty-alleviation relocation centers in inhospitable areas. We will deepen cooperation between the eastern and western regions, mobilize central government departments to provide designated assistance, and encourage more assistance mechanisms such as the "10,000 Enterprises to Aid 10,000 Villages" program, to generate synergy to prevent people from falling back into poverty. We will give full play to the role of assessment and evaluation as the "baton" to consolidate and expand the achievements in poverty alleviation and rural revitalization, and strengthen responsibilities at all levels. Thank you. 

China County Times:

As with the virtuous circle of "science, industry and finance" proposed at last year's Central Economic Work Conference, the development of agriculture and rural areas cannot be separated from the support of funds and policies. Therefore, I would like to ask what measures will be taken in the field of agriculture and rural areas to strengthen policy guarantees and institutional innovation? Thank you.

Tang Renjian:

This question is related with the driving force behind building China's strength in agriculture, that is, where the driving force originates. Thank you for your question, which is a profound one. 

To promote all-around rural revitalization and build up strength in agriculture, we need to make concrete efforts, make real investments, and work together to create policy synergy. This year’s No. 1 central document focuses on areas such as investment, talent, mechanism, and institutional guarantees. 

First, we must improve the investment mechanism through multiple channels to boost rural revitalization, initially via government investment. The document prioritizes agriculture and rural areas as key areas for the national general public budget and requires local governments to take full responsibility for their investments. Efforts will be made to increase the proportion of land transfer revenue that is used for agriculture and rural areas. Eligible rural revitalization projects will be supported via local government bonds. Second, via financial investment. We need to better leverage policy tools, such as relending and rediscounting programs, differentiated reserved requirement ratios, differentiated financial regulation, and assessment and evaluation policies. We encourage financial institutions to increase their lending in the areas related to rural revitalization, with a focus on ensuring credit funding for food security. Third, via investment from social capital. There is a need to improve the linkage mechanism between government investment, financial investment, and social investment. We encourage the bundling of eligible projects implemented by market entities according to regulations. In the agricultural and rural investment sector, projects are often dispersed across many households and vast farmland, and individual projects are often scarce. However, when aggregated at a city, provincial, or national level, the scale can be significant. Therefore, the bundling of projects is necessary to facilitate deposits, loans, and implementation.

Second, we must strengthen the building of the rural talent pool. This involves a combination of cultivating and introducing talent. On one hand, efforts will be made to cultivate local talent in rural areas, such as implementing plans to train high-caliber farmers, carrying out initiatives to cultivate rural entrepreneurial leaders, and developing vocational education for rural revitalization. On the other hand, urban talent will be encouraged to go to the countryside. A program to support rural revitalization talent will be launched, guiding university graduates, skilled professionals, migrant workers, and entrepreneurs to return to or work in rural areas. These four groups of people were mentioned in the speech made by General Secretary Xi Jinping at the central rural work conference at the end of last year. They are encouraged to work at the grassroots level. Additionally, incentive mechanisms will be improved to encourage urban professionals and technical personnel to regularly serve rural areas. Preferential treatment in terms of job promotion and professional title evaluation will be given to those who serve rural areas long-term.

Third, we will improve the mechanism for advancing rural revitalization. The mechanisms mainly relate to the following aspects. First, we need to fully implement the system of responsibility for rural revitalization. We should ensure that Party secretaries at the provincial, municipal, county, township, and village levels assume their responsibilities in implementing rural revitalization. As in poverty alleviation, Party secretaries at five levels are responsible for advancing progress, and we will also adopt this approach in promoting rural revitalization to form a policy and work synergy. Second, we need to improve mechanisms for inspecting and evaluating rural revitalization. Concerted efforts will be taken to conduct performance evaluations on the implementation of the rural revitalization strategy and to carry out assessments on the coordinated efforts between expanding and consolidating poverty alleviation and rural revitalization. We should also make the promotion of rural revitalization through Party building a key part in evaluating the performance of Party secretaries at the five levels. Third, we need to establish a statistical monitoring system for rural revitalization. We should strengthen the statistical monitoring of rural revitalization, set up indicators and statistical systems that reflect the progress of rural revitalization in an objective manner, and conduct evaluations of the implementation of the rural revitalization strategy in a timely and scientific manner. Thank you.

Sannongfabu:

In recent years, the incomes of farmers have grown rapidly, and the income gap between urban and rural areas has gradually narrowed. What are the current channels for farmers to increase their incomes? And what measures are there to help farmers boost their incomes? Thank you.

Tang Renjian:

The phrase "increasing incomes and getting richer" has been used for many years, and was also mentioned in the report to the 20th CPC National Congress and in the No. 1 central document for 2023. I think it has a new meaning in the new stage. Currently, the phrase obviously means to gain common prosperity for everyone. So, from this perspective, it is an old term, but with new connotations and requirements. I'd like to invite Mr. Wu Hongyao to address this question in detail. 

Wu Hongyao:

This is a very important issue. The work on China's agriculture, rural areas and farmers has two main tasks: One is ensuring supplies, and the other is increasing incomes. Therefore, increasing incomes for farmers has indeed been a key task for the work on agriculture, rural areas and farmers. I'll explain more. 

General Secretary Xi Jinping has stressed on many occasions that we must continue to make increasing rural incomes the central task of our work on agriculture, rural areas and farmers, and do everything possible to expand channels for farmers to increase incomes and get richer. Since the 18th CPC National Congress, farmers' incomes have continued to grow rapidly. In 2019, the target of doubling the income of 2010 was achieved one year ahead of schedule. In 2022, the per capita disposable income of rural residents exceeded 20,000 yuan for the first time, reaching 20,133 yuan. The income ratio between urban and rural residents declined from 2.88 in 2012 to 2.45 in 2022. The income gap between urban and rural residents has gradually narrowed. However, we have also noticed that the growth rate of farmers' incomes has slowed, and the driving force of income growth has weakened. We must pay close attention and take practical measures that combine both short- and long-term solutions to expand channels for farmers to increase their incomes. On this regard, the No. 1 central document this year has made arrangements, which focus on four aspects:

First, we need to stabilize employment. In 2022, incomes from wages and salaries accounted for 41.96% of farmers' incomes, which made the major contribution to the increase in farmers' incomes. We will strengthen the implementation of various policies to stabilize employment, improve employment skills, increase job positions, create employment opportunities and stabilize the employment of rural migrant workers. Our research shows that, currently, more than three-quarters of rural migrant workers are employed within their provinces; and more than half are employed in their counties. We should follow this trend and develop county-level industries which have competitive advantages, strong motivational ability and large employment capacity, so as to encourage rural residents to find jobs and start businesses locally. 

Second, we will focus on increasing the effectiveness of the operation. The net income from household operations accounted for 34.63% of farmers' income. Among them, over 60% comes from agricultural operating income. We will cultivate new types of agribusinesses and improve commercial services catering to small agricultural households, to improve farmers' income. We will carry out a promotional campaign to offer services for agriculture businesses to help plant and harvest crops and even manage everything involved in the agricultural production process. Then, we can encourage small household farmers to save costs, improve quality and promote marketing.

Third, we will tap the potential of property income. Net property income accounted for 2.53% of farmers' income. There is still much potential and space to be tapped. We will deepen the reform of the rural land system to ensure the affirmation of rights to contract rural lands, promote endowment steadily, and protect the flexible management rights in an orderly way so that farmers can increase property income and enjoy the dividends of the reform.

Fourth, we will pay more attention to transferring income. Farmers' net transfer income accounted for 20.88% of their income. It is an important component of farmers' income, especially those lifted out of poverty and those with low incomes in rural areas. We will continue to beef up policy support to strengthen agriculture, benefit farmers, and raise rural living standards. We will ensure that the social security level is improved in rural areas and that farmers get more subsidies. By doing so, we aim to provide a safety net concerning social security and ensure people prosper in rural areas. Thank you.

Tang Renjian:

We just mentioned that increasing farmers' incomes is the central task of the work concerning agriculture, rural areas, and farmers. Moreover, we should note that food security is a top priority. We need to handle holistically the relationship between these two tasks, which are both vital to our development.

Red Star News:

The launch of rural reform is the key to the rural revitalization strategy. According to the No. 1 central document for 2023, what new tasks and requirements have been pushed forward to advance rural reform, stimulate production factors and resources in rural areas, and spur internal creativity? Thank you. 

Wu Hongyao:

The No. 1 central document for 2023 mentioned two drivers: scientific and technological innovation and institutional innovation, i.e. reform. I will answer your question.

General Secretary Xi Jinping stressed the need to rely on reform to speed up building strong agriculture. The overall idea for deepening rural reform in the new era and on the new journey is to continue to handle the relationship between farmers and land properly. We must align strengthening the foundation of collective ownership, safeguarding and realizing the rights of farming collective members with activating resource elements to improve the separation of rights and interests over rural collective resources and assets. We need to ensure farmers can share more of the fruits of reform. In the No. 1 central document for 2023, we have made deployments and arrangements from three areas.

First, we will deepen reforms of the rural land system. We will mainly advance reform concerning rural contracted land, residential land, and collective land for development purposes. With regard to contracted land, we will steadily advance trials on extending the second round of rural land contracts for another 30 years upon expiration. We will gradually expand the scope of the pilot scheme, uphold the principle of maintaining overall stability and making minor adjustments to ensure the original contract rights of most farmers remain stable and are smoothly extended. In regions where conditions permit, we will explore resolving the fragmentation of farmland based on the premise of farmers' willingness. In terms of rural residential land, we will give priority to advancing trial reforms on rural land designated for housing in a steady and prudent fashion. Focusing on ensuring housing, controlling illegal construction, making use of idled land, and based on the work to determine, register, and certify both land and house rights, we will strengthen management and explore ways to achieve the separation of ownership, entitlement, and right to use of rural land designated for housing. Concerning rural collective land for development purposes, we will focus on advancing trials for marketing rural collective land for development purposes. We will establish effective regulatory mechanisms for distributing revenues from the appreciation in land values between the state, rural collective economic organizations, and farmers. 

Second, we will develop new collective economies in rural areas. We will continue to advance the reform of the rural collective property rights system and consolidate and expand its achievements. We will work to improve the operation mechanism, advancing the development of an operation mechanism with clear property rights, sound governance structures, steady ways of operation, and reasonable distribution of benefits. We will also explore diversified means to develop new collective economies in rural areas and promote various models, including the contract of resources, the rental of property, the intermediary services, and the share participation of assets. At the same time, we will improve the regulatory system for rural collective assets and fully protect collective members’ rights to know, participate, and supervise.

Third, we will promote integrated urban-rural development in counties. Counties connect urban and rural areas and serve as basic units of economic and social development. They have huge potential in helping expand domestic demands and foster a new development pattern. Over the years, we have seen that more and more people who have moved from rural to urban areas seek employment and start businesses in counties and gain permanent urban residency there. There are 910 million permanent urban residents in China, and nearly one-third of them live in the urban areas of counties and county-level cities. Based on that, we will take counties as a focal point and improve institutions and mechanisms, and policy systems for urban-rural integrated development to ensure the smooth flow of factors of production between urban and rural areas. We will coordinate the planning and development of urban and rural areas in counties; allocate public resources in counties, townships, and villages in an incremental manner; and continue to grant permanent urban residency to rural migrant workers in counties. With all these efforts, we will gradually break the barriers between urban and rural areas in counties and build counties as an important bond for industry-agriculture and urban-rural synergies. Thank you.

Tang Renjian:

Let me emphasize how Mr. Wu Hongyao’s answer just now and this year’s No. 1 central document both mention new collective economies in rural areas. New collective economies in rural areas have been talked about for many years, but it has not been stated explicitly what the new collective economy is and how to develop it. This time, we actually make clear the new collective economy that we will develop, which can be generalized into four aspects. That is the economy with an operation mechanism with clear property rights, sound governance structures, steady ways of operation, and reasonable distribution of benefits. How to develop the new collective economy in rural areas? There are also four aspects, including promoting various models, including the contract of resources, the rental of property, the intermediary services, and the share participation of assets. Therefore, I would like to make this point clear that answers have been provided concerning innate laws and pathways of development of the new collective economy in rural areas.

China Daily:

According to the report to the 20th CPC National Congress, we will build a beautiful and harmonious countryside that is desirable to live and work in. What specific arrangements have been made in this regard in the No. 1 central document for 2023? Thank you.

Liu Huanxin:

Thank you for your question. General Secretary Xi Jinping has stressed that building a beautiful and harmonious countryside that is desirable to live and work in is integral to building China's strength in agriculture. From building a beautiful countryside to a beautiful and harmonious countryside that is desirable to live and work in, the content and goal of rural development have been further enriched and broadened. It also underlines how rural development should focus on both material elements and the people and work on advancing material and cultural progress to achieve the all-around development of rural areas. The No. 1 central document for 2023 has made specific arrangements concerning building a beautiful and harmonious countryside that is desirable to live and work in, with a focus on advancing both material and cultural development. 

First, we will work to promote material development and ensure modern standards of living in rural areas. The report to the 20th CPC National Congress has taken ensuring modern standards of living in rural areas as one of China's overall development objectives by 2035. Last year, the general offices of the Communist Party of China Central Committee and the State Council issued the Action Plan on Rural Construction. We will focus on improving rural living environments, rural infrastructure, and basic public services and advance rural development in an effective and orderly manner. We will give priority to establishing three mechanisms. First, we will build the mechanism that gives full play to the guiding role of rural development plans. In response to the changes in urban-rural structure and new forms of the countryside, we will advance the planning and construction of urban and rural infrastructure and public service systems in a coordinated way. We will pool resources to work on projects that are inclusive, meet essential needs, and ensure basic living standards for people in difficulty. We will also give priority to programs that both bring convenience to people’s lives and promote production. Second, we will build a mechanism that improves the features of the countryside. The original features of the countryside will be demonstrated, and elements of modern life will also be incorporated. We will ensure the integrity of the space and modernization of the infrastructure and preserve the history and original features so as to preserve the customs and charms of the countryside and retain its cultural roots. Third, we will build the mechanism for farmers’ participation. We will respect farmers’ aspirations; widely listen to public opinions on what to build, how to build, and how to manage; and guide farmers to participate in the whole process of rural construction.

Second, we will work to promote cultural development in the countryside and foster a prevailing ethos of kindness, friendship, harmony, and peace. Since ancient times, China has valued the idea of harmony. People follow the laws of nature and take local conditions into consideration in agricultural production. In rural living, people pursue kindness and friendship and value peace and harmony. The villages and settlements are in harmony with the environment and nature. The idea of harmony shall be upheld throughout the process of rural construction to nurture people, educate people, and unite people so as to ensure good social morality and peace and stability in the countryside. First, we will integrate carriers to strengthen and improve rural governance. We will improve primary-level social governance platforms featuring grid-based management, meticulous services, and IT support and integrate effective systems, including a points-based system and the list system. We will also pool the strengths of various departments in a coordinated way to improve rural governance efficacy. Second, we will take innovative measures to advance progress in culture and ethics in the countryside. Based on the needs and desires of farmers, we will provide more interesting, farming-related rural cultural products and services that showcase harmonious living, amicable relationships, and beautiful surroundings in the countryside. We will continue to update outmoded and undesirable habits and customs, and prevent unhealthy tendencies and make extensive efforts to promote good habits and customs in the countryside by formulating regulations, improving village rules and regulations, and making party members and officials serve as role models.

Tang Renjian:

From a beautiful countryside to a beautiful and harmonious countryside, with one word – change – our goals have become richer and deeper. Thank you.

Chen Wenjun:

The last question, please.

CRNTT:

The development of industries is a top priority on the agenda of rural revitalization. What are your considerations concerning implementing supportive policies in this regard and enabling the industry of local specialties to advance rural revitalization? Thank you.

Tang Renjian:

Just now, there was a question about increasing the income of farmers, behind which the most important support is actually the development of industries. General Secretary Xi Jinping has made it clear that the development of industries is the most important on the agenda of rural revitalization, and it tops the “five priorities” of rural revitalization. He also made clear requirements that particular attention should be paid to local specialties at the Central Rural Work Conference held last year end. In this year’s No. 1 central document, specific arrangements have been made concerning the high-quality development of rural industries. Priorities will be given to the following four aspects.

First, we will work on promoting specialties. The development of rural industries depends on making good use of local resources. That is their specialty: diversified agricultural and sideline products, beautiful countryside sceneries, and traditional culture that values farming and education. All of these are attractive features of the countryside and provide unique conditions for the development of rural industries. We should accommodate changes in the market demand and make full use of the special resources of agriculture and rural areas to develop a variety of agricultural functions and multiple types of value in rural areas. We will make breakthroughs in the development of industries in accordance with the local conditions and turn the advantages in resources, eco-environment, and culture into advantages in products and industries to strengthen competitiveness and capacity for sustainable development. 

Second, we will work to promote industrial integration. We will focus on giving full play to the role of the multiplier effect brought about by the three industrial integrations, which we are all familiar with, and work to develop leading enterprises, strengthen weak links, boost all forms of business, and establish self-developed brands. We will break barriers between the production, processing, and sale of agricultural products and develop agricultural products processing and distribution industries. We will foster industries for precooked dishes and improve the standardization of industries for fresh-cut vegetables and the central production kitchen. We will also promote the local conversion and processing of agricultural products and promote transformation from selling raw materials to processed products. We will promote the integration of agricultural, cultural, and tourism industries and accelerate the modern rural service industry, meeting the consumption needs of urban and rural residents. The intermediary services in the new collective economies in the rural areas we just mentioned also refer to that. We will encourage the development of shopping, culture, sport, tourism, elderly care, and child care along with information intermediaries and other daily life services and promote the transformation from selling products to selling both products and services. We just talked about the transformation from selling raw materials to processed products. This is the transformation from selling products to selling both products and services.

Third, we will optimize the layout. We will foster and develop county-level industries that benefit the people. We will prioritize the construction of industrial parks and zones and improve the layout of industries at the county, township, and village levels. We will take the whole county into consideration when making development plans and make a reasonable layout of production, processing, sales, consumption, and other sectors. We will work to improve the carrying capacity and supporting services of county-level industries and give better play to the role of major towns in attracting people. We will guide agricultural product processing enterprises to locate in product origin centers and industrial parks. With all these efforts, we will build industrial clusters that connect urban and rural areas.

Fourth, we will work on connecting and leading farmers. The above-mentioned three measures will make little sense if without doing a good job in connecting and leading farmers. We will guide enterprises to make full use of their advantages and to develop themselves in the process of leading and serving farmers. We will improve the mechanism from which farmers can benefit from a closer integration into agricultural industrial chains, and accelerating the development of the pattern featuring mutual complementarity and division of labor between enterprises and farmers, so as to leave more benefits to farmers as industries produce more value. Moreover, we will improve guidance for nongovernmental businesses to invest in agriculture and rural areas. While encouragement and guidance will be provided, whole-process supervision will also be carried out concerning the introduction, use, and exit of nongovernmental businesses. By doing so, farmers can gain benefits to the greatest extent, and their interests will be safeguarded. Thank you.

Chen Wenjun:

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

Translated and edited by Zhang Liying, Wang Qian, Zhu Bochen, Liu Sitong, Zhang Rui, Yang Xi, Yan Bin, Yuan Fang, Qin Qi, Cui Can, Zhou Jing, Yan Xiaoqing, Li Xiao, Ma Yujia, Wang Yiming, Zhang Junmian, Xu Kailin, 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. 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

Ms. Meng Huating, an official at 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:

Feb. 2, 2023

Shou Xiaoli:

Friends fro 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 development in 2022 and 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 Ms. Meng Huating, an official at 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. Welcome to today's press conference. As we move beyond the recent seven-day holiday, I would like to extend my belated happy Chinese New Year wishes. I also want to express my deep gratitude for your continued interest in and support for our commerce work. Now, I would like to provide a brief overview of our business operations in 2022.

In 2022, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, MOFCOM steadfastly carried out the decisions and deployments of the CPC Central Committee and the State Council. It effectively addressed the impact of unforeseen factors, balanced epidemic control and business development, and effectively implemented a range of policies and follow-up measures to stabilize the economy. The overall business operations made steady progress throughout the year, positively impacting the stability of the overall economic and social landscape. To be specific: 

The consumer market was generally stable. China's retail sales of consumer goods in 2022 hit 44 trillion yuan, basically unchanged from 2021. The trend of new consumption is positive. Online retail sales of physical goods grew by 6.2%, further increasing their share of total social retail sales to 27.2%. Physical retail sales continued to grow, with a 1% increase in retail sales of goods from physical stores above designated size. The market for consumer goods is expanding and customer experience is improving. The demand for upgraded products surged, leading to a 93.4% increase in sales of new energy vehicles.

Foreign trade exceeded expectations. Despite the challenges faced last year, efforts were made across departments and regions to effectively address them. As a result, China's foreign trade hit a new record high with a total of 42.1 trillion yuan, a 7.7% increase year on year, exceeding the 40-trillion-yuan mark. Trade with major partners continued to grow. Imports and exports to the top three trading partners, ASEAN, the European Union and the United States, increased by 15%, 5.6% and 3.7%, respectively. The trade structure has also been optimized. Foreign trade by private firms jumped 12.9% to account for over 50% of the total. The export of labor-intensive products and electromechanical products increased by 8.9% and 7%, respectively. In particular, the export of new energy vehicles and other products has grown rapidly, and the new competitive advantage is rapidly taking shape. Trade in services also grew steadily, reaching 5.98 trillion yuan, a 12.9% increase, with travel and knowledge-intensive services increasing by 8.4% and 7.8%, respectively.

The use of foreign capital continued to grow. China's actual use of foreign capital hit 1.2 trillion yuan in 2022, up 6.3% year-on-year on a comparable basis, once again proving China's continued appeal as a popular destination for foreign investment. The quality of foreign investment continued to improve, with a 46.1% increase in manufacturing investment, accounting for 26.3% of the total, an increase of 7.8 percentage points over 2021. Investment in high-tech industries increased by 28.3%, accounting for 36.1%, with an increase of 7.1 percentage points over the previous year. Investments from major sources of foreign capital continued to grow. Investments from Germany, South Korea and the United Kingdom increased by 52.9%, 64.2% and 40.7%, respectively, and investments from Hong Kong increased by 1.7%. Pacesetters in opening-up have exhibited a positive influence by setting an example. The 21 free trade pilot zones attracted foreign investment amounting to 22.252 billion yuan, representing 18.1% of the national total. Additionally, the 230 national economic development zones attracted foreign investment totaling 259.64 billion yuan, accounting for 21.1% of the national share.

Foreign investment grew steadily. China's non-financial outbound direct investment rose 7.2% to 785.94 billion yuan. Among this, investment in countries along the Belt and Road increased by 7.7%, accounting for 17.9%. In terms of industries, investment in the manufacturing sector increased by 22.4%, accounting for 18.5%; investment in the wholesale and retail industry and construction industry increased by 24.6% and 19.8%, respectively; investment cooperation in green, digital and other fields have become new growth drivers. Foreign contracted projects developed steadily, with a turnover of 1 trillion yuan, an increase of 4.3%; and the number of newly signed projects with a contract value of more than $50 million increased by 59 compared with 2021.

Significant progress was made in bilateral and multilateral cooperation. Head-of-state diplomacy deepened economic and trade ties. Last year, we promoted the G20 and APEC to achieve positive results in the economic and trade field, and successfully held the BRICS Trade Ministers Meeting and Meeting of the Shanghai Cooperation Organisation Member States Ministers Responsible for Foreign Economic and Foreign Trade. We promoted a package agreement reached at the 12th WTO Ministerial Conference and advanced the substantive conclusion of investment facilitation negotiations. China officially launched negotiations for its accession to the Digital Economy Partnership Agreement. The joint feasibility study for building the "version 3.0" China-ASEAN Free Trade Area was completed and negotiations began. The Regional Comprehensive Economic Partnership (RCEP) agreement came into effect and was implemented with high quality. 30.8% of China's total foreign trade was with other RCEP members.

This year marks the first year of 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, fully implement the guiding principles of the 20th CPC National Congress, and steadfastly carry out the directives from the Central Economic Work Conference. In line with the requirements of the State Council executive meeting, based on our key roles in promoting domestic circulation, dual circulation and fostering a new development pattern, we will focus on restoring and expanding consumption, promoting stable growth, optimizing the structure of foreign trade, and making greater efforts to attract and utilize foreign investment. We will also advance high-level openness and boost market confidence, drive high-quality business development, provide crucial support for stabilizing economic growth, employment and prices, and make positive contributions for comprehensively building a modern socialist country.

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

Shou Xiaoli:

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

ThePaper.cn:

In 2022, China's foreign trade withstood the impact of multiple unexpected factors, and the total value of imports and exports exceeded 40 trillion yuan for the first time. What were the highlights of China's foreign trade growth in 2022? Facing a potential international landscape that may include shrinking overseas demand, what measures will MOFCOM take in 2023 to stabilize foreign trade? Thank you.

Li Xingqian:

Thank you for your attention to foreign trade. China's foreign trade experienced an extremely challenging year in 2022. Under the strong leadership of the CPC Central Committee and the State Council and thanks to the cooperation between MOFCOM and various localities and departments, foreign trade enterprises rose to challenges and foreign trade performed exceptionally after withstanding various risks and tests. It also successfully achieved the goal of sustaining stability and improving quality. Overall, our foreign trade's outstanding performance in 2022 can be summed up in three respects: reaching a new height, unleashing new impetus and making new contributions. 

Regarding the new height, China's import and export volume in 2022 hit a record high again at 42 trillion yuan, passing the 40-trillion-yuan mark. In U.S. dollar terms, the volume reached $6.3 trillion, which is an unprecedented increase from the ultra-large base reached in 2021. We have remained the largest trader of goods for six consecutive years. While the volume registered sound growth, the structure also continuously improved. The share of imports and exports of private enterprises increased, and their export share rose by 3.2 percentage points to 60.8%. Multilateral and bilateral economic and trade cooperation also made positive progress. Exports to RCEP trading partners grew by 17.5% year on year, 7 percentage points higher than the overall growth rate. The proportion of imports and exports to Belt and Road partner countries reached 32.9%, up by 3.2 percentage points from 2021.

Regarding the new impetus, China's high-tech, high-value-added products contributing to the green transformation, such as electric vehicles, photovoltaic products and lithium batteries, have become a new growth driver of exports. In 2022, exports of electric vehicles increased by 131.8%, photovoltaic products by 67.8%, and lithium batteries by 86.7%. At the same time, new foreign trade forms, such as cross-border e-commerce and market procurement trade, also boomed, with the import and export volume exceeding 3 trillion yuan and accounting for more than 7% of foreign trade.

Regarding the new contributions, domestically, foreign trade made an important contribution to promoting overall economic recovery. Net exports of goods and services contributed to 17.1% of GDP growth last year, driving GDP growth by half a percentage point. There were 598,000 foreign trade enterprises with robust import and export performance last year, an increase of 31,000 compared with 2021, effectively promoting employment stability in the country. Internationally, amid the turbulent global economic and trade environment, China took effective measures to stabilize production and exports, ensuring the smooth operation of the global industrial and supply chains. Meanwhile, we actively expanded imports. China's import volume reached $2.7 trillion last year, making it a key contributor to global economic and trade development.

At present, foreign trade development is facing an extremely severe environment, as the risk of a global economic recession is rising, the growth of external demand is slowing down significantly, and the international supply chain is restructuring at a faster pace. In 2023, we will make greater efforts to maintain volume stability and optimize structural aspects of foreign trade and stabilize the supporting role of exports in the national economy. We prioritize respecting and stimulating the creativity of trade entities. On Dec. 30, 2022, the Foreign Trade Law was amended, which abolished the requirement for certain filing and registration procedures for foreign trade operators. This actually grants all market entities the right to conduct foreign trade, which is a major reform of China's foreign trade management.

To promote high-level opening up, it is important to make foreign trade easier, more convenient, and more rewarding. Therefore, in the new year, we must carefully serve the main body of foreign trade enterprises, optimize and introduce new trade policies, help enterprises reduce costs, increase efficiency and solve problems, and continue to improve the overall competitiveness of foreign trade. Our focus is on implementing the following four measures. The first is to strengthen trade promotion. We will closely connect suppliers and purchasers to stabilize exports and fully resume offline events of a series of domestic export fairs such as the China Import and Export Fair (Canton Fair). At the same time, we will fully support foreign trade enterprises participating in various overseas professional expos to create more trade opportunities. The second is to expand imports reasonably. We will closely cooperate with our trading partners, leverage the advantages of our super-large market, and expand the imports of high-quality products from other countries so as to stabilize the global trade supply chain. The third is to deepen trade innovation. We will promote the continuous, rapid and healthy development of new business forms, including cross-border e-commerce and overseas warehouses. The fourth is to stabilize the industrial base of foreign trade. We will continue to optimize the industrial structure of foreign trade and, while strengthening general trade, support the gradual relocation of processing trade to the central, western and northeastern regions for upgrading and development. Thank you!

Phoenix TV:

Over the past year, the CPC Central Committee and the State Council have released a series of policies and measures to stabilize the economy. Consumption plays a fundamental role in sustaining economic growth. What are the measures the Ministry of Commerce has taken to promote consumption? What are the highlights? Thank you.

Xu Xingfeng:

Thank you for your question. As you mentioned, last year, the CPC Central Committee and the State Council promptly issued a series of policies and measures to stabilize the economy, among which promoting consumption was a major part of our work. The Ministry of Commerce fully implemented the decisions and plans made by the CPC Central Committee and the State Council. First, we adopted detailed policies and concrete measures to recover and expand consumption actively. Ms. Guo just briefed us about the progress made in consumption. We have stabilized the consumption sector. Over the past year, we have focused on the following aspects:

First, we encouraged spending on major consumption. We usually call vehicles, home appliances, catering and housewares the four pillars of the consumption sector. Together they account for about a quarter of the total retail sales of consumer goods. Regarding vehicles, we worked with related departments and issued policies to stimulate auto circulation and expand spending on vehicles. As you may recall, a press conference was held to introduce such policies. These policies were efficient, covering 12 items in six aspects, and achieved substantial progress. In the second half of 2022, the sales of vehicles stopped falling and rebounded, registering a negative growth of 6.6% in the first half of the year and a positive growth of 10.7% in the second half of the year with the support of such policies. The proportion of new energy vehicles (NEVs) to new car sales increased from one-eighth in 2021 to one-fourth in 2022, meaning that one out of every four vehicles was a NEV, rising from one in eight vehicles previously. In addition, we worked with relevant departments to promote the sales of green and smart home appliances and green building materials in rural areas. In terms of catering, targeted support policies have been introduced to encourage the recovery and development of catering consumption.

Second, we accelerated the development of new types of consumption. Targeted measures have been taken to promote e-commerce, green consumption, and winter sports-related consumption, advance the integration of online and offline consumption, and create new opportunities in the consumption sector. Online retail sales of physical goods climbed 6.2% year on year, 2.7 percentage points higher than in 2021. Online consumption is particularly striking in live-streamed e-commerce, where the number of live broadcasts, viewers, live-streamed products, and active hosts all multiplied compared to 2021.

Third, we upgraded the platforms and carriers of the consumption sector. The carriers refer to cities and rural areas. In terms of cities, we accelerated the development of international consumption center cities, held the first forum on international consumption center cities, and promoted the first 14 items of practices in four aspects. We focused on the role of 15-minute community life circles in cities, while leveraging the role of platforms such as smart stores and smart business districts. In other words, our efforts covered cities, sub-districts and business districts. At the same time, we carried out a three-year action plan to develop county-level commercial systems, improve county-level consumption channels, and steadily increase the proportion of retail sales of consumer goods at the township and county level to the total social retail sales throughout the year.

Fourth, we held various consumption promotion activities. While ensuring epidemic prevention and control measures, we successfully held a series of major exhibitions and fairs, including the China International Import Expo, the China International Consumer Products Expo, and the China International Fair for Trade in Services. By hosting such fairs, we were able to increase the supply of quality goods and services. In addition, we also organized a series of activities, including the International Consumption Season, a nationwide month-long pro-consumption campaign, an online Lunar New Year's Shopping Festival, the Brand and Quality Online Shopping Festival , the Home Appliances Consumption Season, and the Chinese Food Festival, to attract consumers. We guided local governments to carry out consumption promotion activities in line with local conditions. The central and local governments worked together, and ministries, associations and local governments held various activities to boost consumption.

Fifth, we ensured the consumption of necessities. As we all know, pandemic outbreaks emerged in different places in the past year, such as Shaanxi, Jilin, Shanghai, Hainan, Tibet and Xinjiang. We firmly implemented the decisions and plans made by the CPC Central Committee and the State Council. Putting people and their lives first, we established a cross-regional mechanism to ensure the supply of daily necessities and increased support for organizing and transporting goods. A response mechanism was built into the market to promptly follow up on any shortages of daily necessities. We released 10 batches of over 140,000 tons of central meat reserves into the market, effectively ensuring people's consumption needs in key regions and periods of time.

With these measures, the consumption market has been effectively stabilized. The market continued to show healthy momentum during the Spring Festival period. According to our monitoring, the sales revenue of key retail and catering enterprises increased by 6.8% compared to the same period last year. In 2023, we will continue to fully implement the decisions and plans made by the CPC Central Committee and the State Council, strive to overcome possible difficulties and challenges, and promote economic recovery and consumption through practical actions. 

Thank you!

CCTV:

As China's vanguard of reform and opening-up, how was the construction of pilot free trade zones (FTZs) in 2022? What results have been achieved? For the next step, what are the considerations of MOFCOM in constructing pilot PFTZs in 2023? Thank you.

Guo Tingting:

Thank you for your questions. I will briefly answer them. The construction of pilot FTZs is a crucial strategic measure taken by the CPC Central Committee with Comrade Xi Jinping at its core to deepen reform and opening-up in the new era. In 2022, all pilot FTZs across the country made further advancements by forging ahead and exploring bravely. Those achievements were mainly demonstrated in the following aspects.

First, we have promoted high-quality opening-up. All pilot FTZs have implemented a slew of measures to deepen opening-up in the field of investment and trade in a bid to give full play to the leading role of opening up. They have made positive contributions to the development of foreign trade and investment. Since the new negative lists for foreign investment market access for pilot FTZs took effect on Jan. 1, 2022, the amount of items in the manufacturing sector on the negative list for pilot FTZs has dropped to zero, and the service sector has constantly deepened opening up. In 2022, the actual use of foreign capital in the 21 pilot FTZs totaled 222.52 billion yuan, accounting for 18.1% of the country's total. Among those, the actual use of foreign capital in high-tech industries reached 86.34 billion yuan, up 53.2% year on year. At the same time, local governments have taken innovative measures to further enhance trade liberalization and facilitation. Guangxi, Yunnan and Heilongjiang have explored new models to facilitate frontier trade among inhabitants of border regions. Shaanxi has pioneered the "customs declaration before packing" mode to clear cross-border e-commerce bulk cargo, shortening the customs clearance time by two to three days. In 2022, the total import and export volume of the 21 pilot FTZs reached 7.5 trillion yuan, up 14.5% year on year, accounting for 17.8% of the country's total.

Second, we have deepened reform and innovation. Pilot FTZs have strived to improve governance capacity through institutional innovation, to further optimize the business environment. In 2022, MOFCOM and relevant departments issued 56 documents to support the development of pilot FTZs, empowering those pilot FTZs to conduct more reform tasks on a trial basis. As of the end of 2022, all provinces, autonomous regions and municipalities directly under the central government have delegated more than 5,400 items of provincial-level administrative authority to pilot FTZs, significantly streamlining the approval process. Shandong, Guangxi and other places have even innovated and rolled out negative lists for delegating power.

Third, we have boosted high-quality development. Pilot FTZs have actively explored ways to remove institutional barriers that hinder the accumulation of innovative resources and factors at home and abroad. This has accelerated the development of new industries, business forms and models. Several competitive industrial clusters have already taken shape. For example, the Xiyong bonded area in Chongqing has formed a hundred-billion-yuan intelligent terminal industry cluster with an annual output of more than 100 million units. The bonded area of Wuhan in Hubei province has made extensive efforts to develop the optoelectronic information industry, gathering more than 16,000 related enterprises.

Fourth, we have supported major national strategies. Pilot FTZs have vigorously promoted cross-regional collaborative innovation. In 2022, Shandong, Henan, Sichuan and Shaanxi jointly built the Yellow River Basin Pilot Free Trade Zone Alliance with five other provincial-level regions along the Yellow River. Together with the previously established joint conference mechanism of the pilot FTZs in Beijing, Tianjin and Hebei and Yangtze River Delta Pilot Free Trade Zone Alliance, they have given full play to the influence and driving role of the new highland of reform and opening-up, injecting new impetus into serving and promoting the implementation of major national strategies, especially major regional strategies.

The 20th National Congress of the CPC proposed implementing a strategy to upgrade pilot FTZs. In 2023, we will earnestly fulfill the functions of the State Council's Inter-ministerial Joint Meeting for the Work of Pilot Free Trade Zones in accordance with the decisions and arrangements of the CPC Central Committee and the State Council. First, we will actively align with high-standard international economic and trade rules, intensify stress tests in pilot FTZs and free trade ports, and steadily advance opening up with institutional guarantees in the areas of management, standards, rules, and norms, to accumulate experience and explore ways to deepen domestic reform in relevant fields. Second, we will support pilot FTZs to conduct in-depth differentiated exploration and promote open and innovative development of the whole industrial chain in key areas such as integrated circuits, biomedicine, and high-end equipment manufacturing. Third, we will replicate and promote more and better institutional innovation achievements to further unleash the dividends of reform and opening-up. Thank you.

Reuters: 

Following last month's announcement that four Chinese coal importers have been granted permission to resume import of Australian coal, does China plan to lift restrictions on a broader range of Australian exports, such as cotton, rock lobster, wine and barley, soon? And if not, then why not? Could you also confirm whether the Chinese and Australian ministers of commerce will meet next week? Thank you.

Yang Tao:

Thank you for your questions. As we all know, enterprises remain the mainstay of Chinese-Australian trade. Companies of the two countries independently make business decisions based on demand and market conditions. China has taken inspection, quarantine and trade remedy measures strictly in accordance with the laws and regulations of China and WTO rules. It is obviously inappropriate to misinterpret them as restrictive measures.

Recently, the leaders of China and Australia held a meeting in Bali, Indonesia, charting the course for improving bilateral relations. China is ready to work with Australia to implement the important consensus reached by the two countries' leaders, expand cooperation, manage differences and push forward bilateral economic and trade cooperation based on the principle of mutual respect and mutual benefit. Under a mutual agreement between the two countries, the minister of MOFCOM, Wang Wentao will meet his counterpart, Don Farrell, via video conference next week. The two sides will discuss China-Australia economic and trade relations and economic and trade issues of common concern. Thank you.

SSTV:

Hainan has become a popular tourist spot during the first Spring Festival since the outbreak of the epidemic three years ago. What has been done by the Ministry of Commerce to support the construction of the Hainan Free Trade Port over the last year? What upcoming measures will be taken to build Hainan into the world's most open free trade port? Thank you.

Yang Tao:

Thank you for your questions. The construction of the Hainan Free Trade Port has drawn wide attention. More than two years have passed since the Overall Plan for the Construction of the Hainan Free Trade Port was released. Over the past years, its construction has made smooth progress and the overall development has advanced swiftly but steadily and in an effective and orderly manner. In 2022, the Ministry of Commerce has focused on promoting trade and investment liberalization and facilitation, giving priority to the critical task of launching an island-wide independent customs operation and fully supporting the construction of the Hainan Free Trade Port. Our work mainly includes the following three aspects:

First, working with relevant departments, we have adopted a series of supporting policies and measures to accelerate the development of the Yangpu Economic Development Zone. We have issued documents such as opinions on promoting the high development of foreign culture trade, continuously improved the system of policies concerning trade and investment and advanced the implementation of relevant policies.  

Second, together with Hainan province, we have successfully hosted the second China International Consumer Products Expo, with a large increase in the number of exhibitors, including enterprises and brands, buyer attendance, and professional attendees from the first expo.

Third, we have released the "Report on the Development of Trade and Investment of the Hainan Free Trade Port," fully demonstrating the achievements in trade and investment liberalization and facilitation.

Under the strong leadership of the CPC Central Committee and the State Council, the Ministry of Commerce, together with relevant departments and Hainan province, have worked to achieve positive results in the development of trade and investment in the Hainan Free Trade Port. Last year, utilized foreign investment reached 24.44 billion yuan, up 7.1% year on year. The total trade volume in goods surpassed 200 billion yuan, an increase of 36.8% over the previous year. The open economy has maintained strong momentum for development. During the Spring Festival this year, there was strong demand and sufficient supply in Hainan's consumer market and its culture, tourism and catering sector boomed. All of this demonstrated the vitality of the Hainan Free Trade Port. 

Next, the Ministry of Commerce will fully implement the arrangement of "accelerating the construction of the Hainan Free Trade Port" put forward in the report to the 20th CPC National Congress. Under the coordination and guidance of the leading group on deepening overall reform and opening-up of Hainan province, we will prepare for independent customs operation and conduct pressure tests. At the same time, we will implement relevant policies in the areas of trade and investment, study and formulate the list of goods prohibited and limited from importation and exportation of the Hainan Free Trade Port and host the third China International Consumer Products Expo to promote the development of an open economy in Hainan province and support the development of the Hainan Free Trade Port in constantly making new breakthroughs. Thank you!

Zhonghongwang.com:

What are the plans and considerations of the Ministry of Commerce concerning the work to promote consumption this year? Besides, automobiles are one of the major contributors to consumption, and recently many regions have issued documents to boost the consumption of automobiles. What specific measures is the Ministry of Commerce taking to expand automobile consumption? Thank you.

Xu Xingfeng:

First, thank you for your attention to the work on consumption. It was put forward in the report to the 20th CPC National Congress that we should strengthen the fundamental role of consumption in driving economic growth. According to the Central Economic Work Conference, we should prioritize economic recovery and boost consumption. On Jan. 28, the executive meeting of the State Council came up with clear requirements for the work on consumption. The CPC Central Committee and the State Council have consistently attached great importance to consumption. The Ministry of Commerce will fully implement the decisions and plans of the CPC Central Committee and the State Council and maintain the momentum of consumption demonstrated during the Spring Festival. As mentioned earlier, sales of major retail and catering enterprises in China during the Spring Festival increased by 6.8% over the previous year. At present, we will enhance our work's overall coordination and planning by grounding our efforts in the first quarter and setting our sights for the whole year. Our work will mainly focus on three aspects.

First, we will continue to strengthen the guiding role of policies. We will supervise and inspect the implementation of the policies that have been issued to ensure that these policies are fully implemented. In addition, based on the new situation this year, we will focus on key areas such as automobiles and homes. We will launch a batch of new policies to give full play to the role of policies. 

Second, we will plan major events to unleash market vitality. We have designated this year as the "2023 consumption promotion year," and with a focus on that, we will launch events to promote consumption nationwide. At a press conference on Jan. 19, we briefed you on our plan to organize events for consumption promotion nationwide. With the joint actions of provinces and cities, interactions among regions, and cooperation of relevant associations, we will support businesses and boost market dynamism to promote a series of consumption booms.

Third, we will keep optimizing platforms and carriers to make more progress. Just now, I have talked about cities and the countryside. In urban areas, we will advance the development of international consumption center cities, enhance the supporting role of smart shops and smart business districts, further develop 15-minute radius community life circles to bring more convenience for people, and increase quality supplies through multiple channels. Surely, county-level commerce development is still one of our priorities. Our work generally involves the above three aspects. As a result, we will maintain the momentum established during the Spring Festival and deliver a satisfactory performance regarding consumption work in 2023.

The second question was about automobiles. Automobiles, together with the other three consumer goods categories, account for about a quarter of the total retail sales of consumer goods. Automobile sales account for 10% of the total retail sales of consumer goods. If you buy an automobile, you will consume gasoline. Therefore, sales of automobiles and gasoline together represent nearly 15% of the total retail sales of consumer goods. Therefore, automobiles deserve to be considered the top of the four major consumer goods. In 2022, 26.864 million new vehicles were sold in China, up 2.1% year on year, ranking first in the world for 14 consecutive years. Sales of new energy vehicles were most impressive, with a nearly one-fold increase in domestic sales and a growth rate of 93.4%. Penetration rates of new-energy vehicles reached 25%, accomplishing the national plan's goal three years ahead of schedule. What was the goal of the national plan? According to the development plan for the new energy vehicle industry issued in 2020, by 2025, new energy vehicles would account for 20% of the total sales of new vehicles. However, the proportion has already reached 25.6%, fulfilling the goal three years ahead of schedule.  

As the number one of the four major consumption sectors, automobile sales receive consistent policy support. After MOFCOM issued relevant policies together with 16 other departments, we released information to the public in time. There are three key points to keep in mind. The first point is our easing of restrictions on used car relocation nationwide on Aug. 1, 2022, ensuring the free circulation of all second-hand cars that meet National-V standards. The second point is that on Oct. 1, 2022, the process of reverse invoicing began. Usually, a seller issues an invoice to a buyer, but for used cars, enterprises, as second-hand car buyers, can now issue invoices to individual sellers. The third point is that new measures came into effect on Jan. 1, 2023, to change second-hand car agencies into second-hand car dealers. At the end of last year, more than 40,000 second-hand car dealers were registered, up by 180% on a yearly basis. This demonstrates that our policies have delivered notable results.

Next, we will continue to work with relevant departments to stabilize and expand auto sales. We will roll out multiple measures that cover the whole industrial chain and focus on clear priorities. Our efforts will be focused on the following four areas:

First, we will stabilize new car sales. The country has issued a document to promote the transformation from the administration of purchase to the administration of use, as a limitation on car purchases still exists in some regions. In addition, we will carry out various promotional events to stabilize new car sales growth.

Second, we will support the consumption of NEVs. Just now, I said that good progress was made in NEV sales, which conforms with our goal to achieve carbon peak and neutrality targets. We will guide local authorities to further improve the NEV user experience, from license plate registration to charging and traffic, so that people will have no worries. Imagine the unpleasant experience of taking a long-distance trip and failing to find any charging piles. Therefore, our next step is to improve NEV users' environment.

Third, we will continue to expand the circulation of second-hand cars. The construction and improvement of a nationwide second-hand car information inquiry platform will be accelerated, and the Measures for the Administration of the Circulation of Second-hand Automobiles will be revised. As a result, information about cars will be released more transparently. We aim to create a worry-free atmosphere for second-hand car consumers so that they feel like new car buyers. If the second-hand car you bought had been soaked, burned, or undergone major repairs, and you didn't know about it before purchasing, that would certainly affect your consumption experience. Therefore, we must adhere to our aim and dedicate ourselves to achieving it. Expanding the circulation of second-hand cars will invigorate our vast auto market, with the total number of cars reaching 319 million, and promote sequential consumption in this sector.

Fourth, we will streamline the process of scrapping and trading-in automobiles. As previously mentioned, vehicles have a lifespan. Both brand-new and used cars have limited lifespans and must eventually be scrapped and disassembled. We will revise regulations on scrapping motor vehicles and improve the recycling system. Furthermore, we will encourage regions with suitable conditions to exchange old cars for new ones, thus promoting the circular consumption of cars. 

By creating policy incentives and implementing specific measures, we will maintain a sound environment for auto sales to leverage their role in driving consumption. Thank you.  

China News Service:

In 2022, China's utilized foreign investment expanded by 6.3% year on year, hitting an all-time high. How does MOFCOM view the country's overall performance in attracting foreign investment last year? What do you expect the situation to be this year? Thank you.

Meng Huating:

Thank you for your attention to our work involving foreign investment in China. In 2022, China's attraction to foreign investment was affected by multiple negative factors, such as the spread of COVID-19, slowing global growth, and surging investment protectionism. MOFCOM has resolutely implemented the decisions and plans of the CPC Central Committee and the State Council. It has also worked with other departments and local governments to make solid progress in attracting foreign investment. The volume of foreign investment in China has increased, and its composition and quality have been improved. We have therefore made an active contribution to maintaining stable macroeconomic performance. Throughout the year, China's attraction to foreign investment has shown five features:

First, the scale of foreign investment reached a new record high. On the basis of double-digit growth in 2021, foreign investment continued to maintain stable growth in 2022, and the actual use of foreign investment exceeded 1.2 trillion yuan for the first time as calculated in RMB, with a year-on-year increase of 6.3%, according to comparable standards. If calculated in US dollars, the utilized foreign investment reached $189.13 billion, an increase of 8%, and the scale of investment attraction remained at the forefront of the world.

Second, foreign investment into the manufacturing industry increased significantly. The industry's actual use of foreign capital was 323.7 billion yuan, up 46.1% year on year. In particular, thanks to the lifting of market access restrictions on foreign investment, foreign investment in the automobile manufacturing industry increased by 263.8%. In addition, the attracted investment in computer and communication manufacturing and pharmaceutical manufacturing increased by 67.3% and 57.9%, respectively.

Third, the high-tech industry became an important source of growth. The industry utilized 444.95 billion yuan of foreign investment, up 28.3%, driving the further improvement of the quality of foreign investment. Among them, the investment in the high-tech manufacturing industry and high-tech service industry increased by 49.6% and 21.9%, respectively. In addition to computer and communication manufacturing and pharmaceutical manufacturing mentioned just now, foreign investment in the services for applying scientific and technological achievements, and services for R&D and design also achieved rapid growth, with the growth rate reaching 35% and 26.4% respectively.

Fourth, investments from major sources increased generally. South Korea, Germany, the United Kingdom, and Japan increased their investments by 64.2%, 52.9%, 40.7%, and 16.1%, respectively. Meanwhile, from a regional perspective, investments in China by the EU, countries along the Belt and Road, and ASEAN increased by 92.2%, 17.2%, and 8.2%, respectively.

Fifth, China's eastern, central, and western regions attracted more investment in full force. The actual use of foreign capital in the eastern, central, and western regions increased by 4.7%, 21.9%, and 14.1%, respectively. Among the eastern provinces, Jiangsu province attracted foreign investment of nearly 200 billion yuan; Guangdong province, Shanghai municipality, Shandong province, Zhejiang province, and Beijing municipality each attracted more than 100 billion yuan. Among the central and western provinces, foreign investment in Shanxi, Henan, Guangxi, Hunan, and Shaanxi increased by 229.6%, 119.8%, 49.1%, 41.3%, and 33.6%, respectively. It should be noted that the potential for attracting foreign investment in the central and western regions has been further unleashed.

At present, the situation faced by China in attracting foreign investment is still very complex and severe. World economic growth is sluggish, and various adverse factors are still brewing. A report published by the UNCTAD last month pointed out that global transnational investment will face huge downward pressure in 2023. But at the same time, we are aware that the fundamentals sustaining China's steady and long-term economic growth remain unchanged, and the comprehensive advantage composed of a super-large-scale market, a complete industrial system, rich human resources, and a continuously optimized business environment are being constantly strengthened to attract investment. The majority of foreign investors still have a strong desire to invest in China. We are confident that we will continue to achieve new great results in attracting foreign investment in 2023, promote the "quantity" growth and "quality" improvement of foreign investment, and better help to foster a new development pattern and promote high-quality development. Thank you!

Bloomberg: 

At the end of December, MOFCOM announced a "request for comments" on looking to restrict the export of manufacturing technology for solar cells, amongst other things. Can you provide more details about this effort? And can you also explain how this is different from the US's looking to restrict exports of technology to manufacturers of semiconductors? Thank you.

Yang Tao:

First of all, thank you for your questions. There is a deviation in your understanding of the restrictions on the export of solar cell production technology. Recently, in accordance with the Foreign Trade Law of the People's Republic of China and the Regulations on the Administration of Technology Import and Export of the People's Republic of China, MOFCOM and the Ministry of Science and Technology revised the catalog of technologies that are subject to export bans or restrictions and publicly solicited opinions. Currently, we are sorting out the opinions and suggestions we have collected and will carefully study them along with relevant departments. Next, we will continue to uphold open cooperation, constantly optimize the business environment of technology trade, and promote global technology trade exchanges and cooperation. Thank you.

Red Star News:

Over the past year since the RCEP agreement entered into force, dividends have started to emerge, and all parties have paid close attention to this. What achievements have been made since the RCEP agreement entered into force in 2022? Thank you.

Guo Tingting:

Thank you for your question. Let me take this question. The Regional Comprehensive Economic Partnership agreement, also known as the RCEP agreement, entered into force on Jan. 1, 2022. MOFCOM firmly implements the decisions and arrangements of the CPC Central Committee and the State Council. Together with relevant departments, we have applied and fulfilled the rules and market access commitments of RCEP and promptly issued the guiding opinions on the high-quality implementation of the RCEP to guide and support local governments, industries, and enterprises to seize opportunities and expand trade and investment cooperation with RCEP members. Positive results have been achieved, which are mainly reflected in:

First, the agreement played a powerful role in the development of trade and investment. From the perspective of trade, the total import and export between China and other RCEP members reached 12.95 trillion yuan in 2022, up 7.5% year-on-year, accounting for 30.8% of China's total foreign trade. In particular, China's import and export with eight of the members grew by double digits. From the perspective of two-way investment, in 2022, China's non-financial direct investment in other RCEP members was $17.96 billion, up 18.9%, while China attracted their direct investment of $23.53 billion, up 23.1%. The growth rate of two-way investments was higher than the overall level.

Second, local governments have achieved initial progress in aligning policies with the RCEP agreement. MOFCOM offered them comprehensive guidance and support in this regard. We organized 10 training sessions nationwide along 10 themes, with a total attendance of more than 400,000. We upgraded the free-trade zone public services platform, helping local governments and enterprises make full use of tariff reductions and cumulative rules of origin under the RCEP, seize the opportunities for trade and investment liberalization and facilitation, and deepen cooperation on industrial and supply chains with other participating countries. Some local governments have taken the active implementation of RCEP encouraging obligations as leverage to optimize the business environment. They have worked to build high-level open cooperation demonstration zones for RCEP and attract industries, capital, and talent, thus significantly improving the local trade and investment climate.

Third, enterprises enjoyed tangible benefits of the agreement. The implementation of the RCEP agreement, combined with previous bilateral free trade agreements that China signed with other participating countries, has delivered more benefits to enterprises. In 2022, Chinese export companies applied for a total of 673,000 RCEP certificates of origin and declarations of origin worth 235.3 billion yuan, with an estimated 1.58 billion yuan in tariff reductions from importing countries. Chinese companies benefited from an estimated 1.55 billion yuan in tariff reductions for the import of products worth 65.3 billion yuan.

Fourth, participating countries worked together to enhance the outcomes of the agreement. China actively promoted the ratification of the agreement by more countries through mechanisms such as RCEP ministerial meetings and joint committees. South Korea, Malaysia, and Indonesia, among other countries, have already rectified and implemented the agreement. At the same time, we closely cooperated with other RCEP members to promote the implementation of tax reduction obligations and facilitation measures, optimize the regional business environment, and enhance the outcomes of the agreement.

In the next step, MOFCOM will continue to ensure high-quality implementation of RCEP, advance the continuous release of its dividends, and give full play to the positive role of RCEP in ensuring stable performance in foreign trade and investment, promoting cooperation on industrial and supply chains, and driving high-quality development. At the same time, we will work with other RCEP members to promote the full and effective implementation of the agreement for all signatory countries, strengthen mechanism development, and provide a strong guarantee for the steady and sustained progress of RCEP. Thanks!

The Poster News APP:

Under the current situation, what favorable factors does China have in attracting foreign investment? What specific measures will be taken to maintain the current level of foreign investment, expand its quantity, and improve its quality? Thanks!

Meng Huating:

Thank you for your questions. As was introduced just now, under the joint efforts of all parties, we have achieved remarkable progress in attracting foreign investment in 2022, which laid a good foundation for relevant work in 2023. There are still many favorable factors for China to attract foreign capital. They can be summarized as the following four aspects:

First, the outlook for China's economic growth is promising. The fundamentals of the Chinese economy — its strong resilience, enormous potential, great vitality, and long-term sustainability — remain unchanged. The 20th CPC National Congress made a strategic deployment for China's economic development both in the immediate future and for some time to come, and the Central Economic Work Conference put forward clear requirements for promoting the overall improvement of economic performance this year. All localities and departments are actively devising measures to implement the deployment and requirements so as to achieve the goal of "ensuring steady growth and keeping employment and prices stable." Recently, a number of international organizations have raised their forecasts for China's economic growth this year. Economic growth means investment opportunities. Recent surveys by relevant institutions showed that most foreign-funded enterprises are very confident in China's economic outlook this year. Investors' confidence is our greatest strength in work.

Second, the Chinese market is becoming a stronger magnet for foreign capital. According to statistics from MOFCOM, more than 90% of foreign-funded enterprises in China are mainly targeting the Chinese market. With a population of more than 1.4 billion, China is the second-largest consumer market in the world. New forms and models of consumption continue to emerge, further unlocking the market potential. The Central Economic Work Conference required that the country prioritize the recovery and expansion of consumption this year. The market size will be further expanded, and foreign investors will have more motivation to invest in China.

Third, the synergy building through various policies is more evident. Since last year, MOFCOM, together with relevant parties, has issued the new Catalogue of Encouraged Industries for Foreign Investment and introduced a series of special policies to promote investment in manufacturing and encourage the development of foreign-invested R&D centers. This year, we will vigorously promote the implementation of these policies and introduce another batch of policies and measures according to the deployment of the central leadership. The synergy of existing and new policies will bring more sense of gain to foreign-funded enterprises.

Fourth, cross-border exchanges are more convenient. In the past three years, the pandemic impeded the cross-border flow of people and logistics, which was the most prominent problem encountered by foreign investors. Now, as China has entered a new phase of COVID-19 response, cross-border exchanges are becoming normalized. As you may have noticed, many local governments have recently organized activities overseas to attract foreign investment. It is believed that more foreign-funded projects will be implemented in China this year.

These are some favorable factors for attracting foreign capital. Now, I will briefly introduce our specific measures in 2023.

The 20th CPC National Congress and the Central Economic Work Conference made a series of important arrangements for promoting high-standard opening-up and making greater efforts to attract and utilize foreign investment. In the next step, we will resolutely implement the deployment of the central leadership and make every effort to deliver a satisfactory performance.

In terms of boosting newly-added foreign investment, we will work to cut the negative list for foreign investment in a reasonable manner and further expand opening-up in the modern service sector. Based on major economic and trading expos and various investment promotion mechanisms, we will support all localities to attract investment by combining the strategies of "going global" and "bringing in" and see that more iconic foreign investment projects are implemented.

In terms of stabilizing existing foreign investment, we will continue to leverage the role of the special task force for key foreign-funded projects under the foreign trade and investment coordination mechanism. We will strengthen regular communication with foreign-invested enterprises and foreign chambers and associations of commerce, help solve difficulties facing enterprises, and ensure national treatment for all foreign-invested enterprises. We will also improve the interdepartmental coordination mechanism of all levels for solving complaints from these enterprises and protect their rights and interests in accordance with the law so as to ensure the sound operation and development of existing foreign-invested enterprises.

In terms of improving the quality of foreign investment, we will work to communicate and implement a series of related policies and encourage localities and related government bodies to roll out detailed supporting measures. We will proactively guide more overseas investment towards sectors such as advanced manufacturing, modern services, energy conservation and environmental protection, and sci-tech innovation and toward the central, western, and northeastern regions. We will keep scaling up the efforts to attract investment in high-tech industries and continuously improve the quality and standard in attracting foreign investment.

Thank you.

Shou Xiaoli:

The commerce work has attracted much attention as many journalists still have questions to ask. Due to time limits, we will have two last questions.

Tianmu News:

Regarding the "going global" strategy mentioned earlier, since the second half of last year, many local foreign trade enterprises have been taking overseas group trips to boost business orders, which fostered a strong atmosphere of expanding the market. What efforts will MOFCOM make this year to boost trade? What kind of assistance or guidance will MOFCOM provide to foreign trade enterprises? Thank you.

Li Xingqian:

Thank you for your questions. In the fourth quarter of last year, MOFCOM and another five government departments rolled out policy measures to ensure unimpeded channels for foreign trade enterprises to boost business orders. All localities have proactively supported these enterprises to take overseas group trips, participate in expos, visit clients, and seek business opportunities. As a result, the foreign trade sector has sprung to life. Foreign trade businesses have their own features, and an in-person meeting often works better than thousands of emails. Our foreign trade enterprises are looking forward to taking their samples and designs to the global market and bringing in business orders and clients.

In 2023, the global economic and trading situation has grown extremely challenging, and the downward pressure mounted markedly. The major problem facing China's foreign trade has turned from impeded supply chains and insufficient order delivery capacity last year to weak global demand and a drop in the number of orders this year. This is a crucial change. MOFCOM has specified that strengthening the enabling role of trade and building closer connections between supply and purchasing will be put high on the agenda. It will also ramp up efforts to support our foreign trade enterprises to boost business orders and expand the market. Specifically, we will work on the following four aspects concerning foreign trade enterprises.

First, in-person expos will be resumed. We will carry out the decisions made by the State Council executive meeting on Jan. 28 and work to fully resume in-person trade fairs and expos domestically. We will ensure the success of a series of well-known events such as the China International Import Expo, the Canton Fair, and the China Hi-tech Fair.

Second, new business forms will be better explored. We will promote the further growth of new business forms that have seen rapid development in recent years, such as cross-border e-commerce and overseas warehouse. We will also give full play to digital measures to unlock trade potential and boost exports from micro, small, and medium-sized foreign trade enterprises.

Third, we will tap new demand. MOFCOM will give full play to the role of the economic and commercial offices of Chinese embassies and consulates overseas and assist local governments in organizing enterprises to carry out trade cooperation abroad. We need to strengthen research on international market segmentation, share supply and demand information in various markets in a timely manner, and help companies obtain foreign trade orders in time.

Fourth, we will support enterprises to "go global." MOFCOM will provide more convenience for foreign trade enterprises to carry out cross-border business exchanges, encourage enterprises to promote Chinese products, Chinese manufacturing, and Chinese brands in various ways, and support qualified local governments to expand their overseas exhibitions. Thank you!

Hong Kong Bauhinia Magazine:

What new progress and achievements have been made in terms of Belt and Road economic and trade cooperation in 2022? How will it advance this year? Thank you.

Yang Tao:

Thank you for your questions. Since the Belt and Road Initiative (BRI) was put forward more than nine years ago, MOFCOM has conscientiously implemented the decisions and plans of the CPC Central Committee and the State Council and continuously deepened the economic and trade cooperation along the Belt and Road, which has effectively promoted mutual benefit and win-win cooperation with the partner countries, and provided important support for the high-quality development of the BRI. During the previous year, thanks to the joint efforts of all parties, the Belt and Road economic and trade cooperation has taken new steps, and the results are mainly reflected in the following four aspects:

First, trade and investment grew rapidly. In 2022, China's trade with countries along the Belt and Road hit a record high, with the volume of trade in goods reaching 13.8 trillion yuan, a year-on-year increase of 19.4% and 11.7 percentage points higher than the overall growth rate. The two-way investment between China and Belt and Road countries also reached a new level, covering multiple industries. Among them, the non-financial direct investment in the countries along the Belt and Road was 141.05 billion yuan, and the actual investment in China by the countries along the Belt and Road was 89.15 billion yuan, a year-on-year increase of 7.7% and 17.2%, respectively, which are 0.5 percentage point and 10.9 percentage points higher than the overall growth rate, respectively.

Second, project construction achieved solid and effective results. In 2022, China's newly signed contracted projects in countries along the Belt and Road were valued at 871.84 billion yuan, with a turnover of 571.31 billion yuan, accounting for 51.2% and 54.8% of its total contracted projects there, respectively. Steady progress was made in the construction and operation of key projects such as the China-Laos railway and the Hungary-Serbia railway, and a number of "small but beautiful" livelihood projects involving agriculture, medical care, and poverty reduction were implemented one after another. Overseas economic and trade cooperation zones were upgraded. By the end of 2022, the cooperation zones built by Chinese companies in countries along the Belt and Road had seen an investment of 397.9 billion yuan in total, creating 421,000 local jobs. More than 16,000 trips were operated by China-Europe Railway Express throughout the year, a year-on-year increase of 9%. The construction of new land-sea transit routes opened a new chapter. A China-Singapore cooperation plan on jointly building the New International Land-Sea Trade Corridor was implemented. These high-quality cooperation projects have effectively promoted the economic and social development of the host countries and brought a real sense of fulfillment to the local people.

Third, cooperation has been continuously expanded. Cooperation in the fields of new energy, energy conservation, environmental protection, and new infrastructure construction boomed. In 2022, China signed 31 memorandums of investment and cooperation involving green development, the digital economy, and the blue economy with relevant countries, creating more development opportunities for Belt and Road cooperation. The Silk Road e-commerce circle of friends continues to expand and the number of our partner countries that have established bilateral e-commerce cooperation mechanisms has increased to 29. In addition, special e-commerce activities such as online shopping festivals featuring quality African products and "Buy at BRICS" online promotion events have become new highlights of the cooperation.

Fourth, mechanisms and platforms have been well improved. We actively leveraged the role of multilateral and bilateral economic and trade mechanisms, deepened communication and alignment, and established 12 new cooperation mechanisms for trade, investment, and trade in services with relevant countries. Key cooperation such as the "nine programs" of China-Africa cooperation and the demonstration zones jointly built with ASEAN countries for economic innovative development was advanced in an orderly manner. China-ASEAN Expo, China-Eurasia Expo, China-Central Asia Economic and Trade Cooperation Forum, China-Latin America Infrastructure Cooperation Forum , and other exhibition forums were successfully held.

This year marks the 10th anniversary of the Belt and Road Initiative. MOFCOM will thoroughly implement General Secretary Xi Jinping's important instructions and guiding principles on Belt and Road cooperation, implement the decisions and plans of the CPC Central Committee and the State Council in a solid way, deepen unimpeded trade, tap new potentials of investment and cooperation, improve quality and efficiency, and make new contributions to high-quality development of the BRI! Thank you!

Shou Xiaoli:

Thank you to Ms. Guo, our speakers, and also to all the friends from the media. That's all for today's press conference.

Translated and edited by Wang Yiming, Wang Qian, Xu Xiaoxuan, Zhang Rui, Cui Can, Zhang Junmian, Qin Qi, Liu Sitong, Xu Kailin, Ma Yujia, Li Xiao, Zhang Liying, Li Huiru, Zhu Bochen, Liu Qiang, Yan Bin, Wang Wei, 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. Zhao Chenxin, vice chairman of the National Development and Reform Commission (NDRC)

Mr. Xin Guobin, vice minister of industry and information technology

Mr. Liu Guohong, vice minister of natural resources

Mr. Zhao Yingmin, vice minister of ecology and environment

Chairperson:

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

Date:

Jan. 19, 2023

Xing Huina:

Friends from the media, 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 Green Development in the New Era," and organized this press conference to introduce and interpret its main content.

The white paper fully implements Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the guiding principles of the 20th National Congress of the Communist Party of China (CPC), and presents a comprehensive picture of China's work to apply the new development philosophy and its major decisions, achievements, and experience in green development since the 18th CPC National Congress. The white paper introduces China's efforts and progress in promoting the modernization of harmony between humanity and nature and its ideas, actions, and contributions regarding actively participating in global environment governance and efforts to respond to climate change.

At around 18,000 Chinese characters, the white paper consists of a preface, a main body, and a conclusion. The main body is divided into seven parts: "Staying Firmly Committed to Green Development," "A Basic Green Territorial Configuration Is in Place," "Adjusting and Improving the Industrial Structure," "Extensive Application of Green Production Methods," "Eco-Friendly Living Becomes the Prevailing Ethos," "Improving the Institutions and Mechanisms for Green Development," and "Building the Earth into a Beautiful Home." The white paper is published in eight languages - Chinese, English, French, Russian, German, Spanish, Arabic, and Japanese - by the People's Publishing House and the Foreign Languages Press. It is available at Xinhua Bookstores across the country.

To help you gain a full and accurate understanding of the white paper, we have invited Mr. Zhao Chenxin, vice chairman of the National Development and Reform Commission (NDRC); Mr. Xin Guobin, vice minister of industry and information technology; Mr. Liu Guohong, vice minister of natural resources; and Mr. Zhao Yingmin, vice minister of ecology and environment, to brief you on relevant information and then take your questions.

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

Zhao Chenxin:

Friends from the media, good morning. It's my great pleasure to attend today's press conference and introduce the white paper "China's Green Development in the New Era" together with several leaders of relevant departments.

I've got the white paper and let me show it to you.

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to ecological conservation and made a series of major deployments, leading to significant achievements in China's green development. With rich content and clear focus, the white paper "China's Green Development in the New Era" systematically summarizes China's actions and achievements in green development over the past decade, and expounds the country's ideas and experience of green development. 

Ms. Xing introduced the structure of the white paper just now. Here I would like to briefly explain its main content from three perspectives.

First, the white paper elaborates on the underlying philosophy of China's green development in the new era.

The first is applying a people-centered development philosophy. China has taken a sound eco-environment as the most inclusive public benefit, vigorously promoted eco-friendly ways of work and life, and improved the quality of the environment and ecosystems so as to help people feel happier, more satisfied, and more secure.

The second is focusing on sustainable development in China. China has treated lucid waters and lush mountains as invaluable assets and firmly pursued a green and low-carbon path to development to enhance economic, ecological, and social benefits.

The third is applying systems of thinking and a coordinated approach. China has striven to maintain a balance between development and protection, between overall and local interests, and between the present and the future. The country has worked to coordinate industrial restructuring, pollution control, eco-environmental conservation, and climate response. It has endeavored to cut carbon emissions, reduce pollution, expand green development, and pursue economic growth.

The fourth is working together for global sustainable development. China has upheld the vision of a human community with a shared future, always been a major participant, contributor, and torchbearer in the global movement for building an eco-friendly civilization, and contributed its wisdom and strength to global sustainable development.

Second, the white paper systematically summarizes China's actions and achievements in green development in the new era.

The first is a sustained and steady improvement in the eco-environment. During the decade (from 2012 to 2021), 64 million hectares of trees were planted, desertification prevention and control was carried out over 18.53 million hectares of land, and 40 million hectares of land were improved through sowing grass, and more than 800,000 hectares of wetland were added or restored. China has steadily increased areas of forests, grasslands, wetlands, rivers, and lakes, and effectively reversed the trend of desertification. The quality of the environment has significantly improved. The average PM2.5 density of China's cities at the prefecture level and above dropped from 46 micrograms per cubic meter in 2015 to 30 micrograms per cubic meter on 2021. On 87.5% of the days in 2021, people enjoyed a good air quality. In 2021, the proportion of surface water at or above Grade III in the country's five-tier water quality system reached 84.9%. All these were major changes.

The second is a considerable increase in the quality of economic growth. Strategic emerging industries have become a key driver for economic development. The value-added output of high-tech manufacturing in 2021 accounted for 15.1% of that of industries above the designated size, up 5.7 percentage points from 2012. China's green industries are booming. China leads the world in the manufacture of clean energy generation facilities. In 2021, the output value of China's energy conservation and environmental protection industries exceeded 8 trillion yuan. 

The third is the extensive application of green production methods. China has advanced the comprehensive green transformation of the manufacturing, agriculture, and service sectors, improved the energy mix, fostered a greener and low-carbon way of transportation, and significantly increased efficient resource utilization. The proportion of clean energy sources in total energy consumption increased from 14.5% in 2012 to 25.5% in 2021, and the proportion of coal decreased from 68.5% to 56% over the same period. China's average annual economic growth of 6.6% has been supported by an average annual growth of 3% in energy consumption, and the per unit GDP energy consumption dropped by 26.4%. China is among the countries with the fastest reduction in energy intensity.

The fourth is the active promotion of eco-friendly living. China has worked to raise public awareness of conserving resources and protecting the environment, and advocated a greener and low-carbon lifestyle, creating a conducive social atmosphere for jointly promoting green development.

The fifth is further improvement in institutions and mechanisms. China has strengthened the rule of law, tightened supervision and management, and improved market-based mechanisms, thus providing a solid guarantee for its green development.

Third, the white paper offers with a large number of facts on China joining hands with the rest of the world to build the Earth into a beautiful home.

The Earth is our one and only home, and a beautiful homeland is the shared aspiration of mankind. China has actively participated in global climate negotiations in a constructive manner, and made historic contributions to the conclusion and implementation of the Paris Agreement. China is also an active participant in the South-South cooperation on climate change. The country endeavors to build a green Belt and Road and carries out extensive green international cooperation. In doing so, China is working with the international community to advance sustainable development worldwide.

China will keep to the path of green development, promote the modernization of harmony between humanity and nature, and work with other countries to build a cleaner and more beautiful world.

That's my introduction to the key points of the white paper. Now, my colleagues from relevant departments and I are ready to answer your questions. Thank you.

Xing Huina:

Thank you, Mr. Zhao, for your introduction. Now we will open the floor for questions. Please identify the media outlet you represent before raising questions.

The Paper:

Low-carbon energy is the key to reducing air pollution and controlling greenhouse gas emissions. In the past 10 years, how has China coordinated energy security and green and low-carbon transformation and accelerated the building of a clean, low-carbon, safe, and efficient energy system? Thank you.

Zhao Chenxin:

Thank you for your question. You raised a very good question. Indeed, human beings cannot survive and develop without energy. To achieve green development, we must vigorously reform how we produce and utilize energy. In the 10 years of the new era, China has accelerated the reform of energy production and utilization, continuously enhanced energy security capabilities, and promoted the substantial improvement of green and low-carbon levels, providing critical support for the realization of high-quality economic and social development. I will briefly introduce it from several aspects.

First, we have strengthened the ability to guarantee energy supply. We are committed to maintaining energy security and have developed a diverse energy production system that includes coal, oil, gas, electricity, nuclear, and renewable energy. Recent data from the National Bureau of Statistics and the National Energy Administration (NEA) shows that the supply of raw coal, crude oil, natural gas, and electricity in China has grown steadily, with improved quality, in recent years. At a press conference of the SCIO two days ago, Lian Weiliang, vice chairman of the NDRC, and Zhang Jianhua, administrator of the NEA, elaborated on this topic, so I won't go into details on this aspect. Through these efforts, we have ensured high-quality energy production growth, effectively guaranteeing national energy security.

Second, we have vigorously promoted renewable energy. The capacity of wind and photovoltaic power generation has continued to grow. Wind and solar energy are gradually becoming the dominant source of newly installed capacity and power generation. At the end of 2022, the national installed capacity of wind and photovoltaic power reached over 700 million kilowatts, and the installed capacity of wind power and photovoltaic power generation ranks first in the world. In 2022, the newly installed capacity of wind and photovoltaic power made up 78% of the country's newly installed capacity, and newly added wind and photovoltaic power generation accounted for more than 55% of the country's new power generation in that year - a significant proportion. We have taken many measures to implement the full guarantee purchase system for renewable energy power generation and have also been carrying out a weighted assessment of our renewable energy power consumption responsibility. The utilization efficiency of renewable energy has been significantly improved.

Third, we have focused on enhancing the efficient and clean utilization of fossil fuels. We advanced coal industry supply-side reforms and implemented green mining. Also, we transformed coal power plants to ultra-low emission and energy-saving standards. By the end of 2021, over 1 billion kW of coal-fired generating units have achieved ultra-low emissions nationwide, and nearly 900 million kW have undergone energy-saving renovations. We encouraged the substitution of coal with natural gas, electricity, and renewable energy and promoted clean end-use energy. We also carried out special actions to upgrade refined oil quality to an internationally advanced level. Furthermore, we accelerated the phasing out of high-emission and old vehicles to reduce pollution emissions effectively.

Ensuring energy security and promoting a green, low-carbon transformation while accelerating the development of a clean, efficient, and safe energy system is a crucial and long-term objective that must be upheld. Building on our current efforts, we will continuously strive to fully implement the guiding principles of the 20th CPC National Congress and further advance the energy revolution, providing strong support for a green and low-carbon transformation of the economy and society. Thank you.

Hong Kong Economic Herald:

The report of the 20th CPC National Congress proposed to move the manufacturing sector toward higher-end, smarter, and greener production and made a series of important arrangements for the transition to green development. What developments have been made in the green and low-carbon transformation of China's industry and information technology in the new era? Thank you.

Xin Guobin:

Thank you for your question. The 20th CPC National Congress made important arrangements for promoting the green development of the manufacturing sector, and further pointed out the direction for the green and low-carbon transformation of the industrial and information industry. Since the 18th CPC National Congress, we have conscientiously implemented Xi Jinping Thought on Ecological Civilization, applied the new development philosophy in full, the right way and all fields of endeavor, and adopted a series of policy measures, all resulting in significant progress.

First, the restructuring of the industrial sector has seen notable results. Traditional manufacturing is undergoing rapid optimization and adjustment. During the 13th Five-Year Plan period (2016-2020), China removed more than 150 million tons of excess steel production capacity and about 300 million tons of excess cement production capacity. Substandard steel products have been eliminated. The advanced manufacturing industry continues to grow and develop. The value-added output of high-tech and equipment manufacturing in 2021 accounted for 15.1% and 32.4% of that of industries above the designated size, up 5.7 and 4.2 percentage points from 2012, respectively.

Second, energy resource utilization efficiency continues to improve. All stakeholders are actively promoting industrial energy conservation and reduction. In 2021, the comprehensive energy consumption per unit of products such as steel, electrolytic aluminum, cement clinker, and flat glass was reduced by more than 9% compared to 2012, and the coal consumption per kilowatt-hour of thermal power units nationwide decreased to 302.5 grams of standard coal, both leading the world. At the same time, resource utilization is being actively pursued. According to preliminary estimates, in 2021, the total utilization of bulk industrial solid waste was approximately 2.1 billion metric tons, with a utilization rate increase of nearly 10 percentage points compared to 2012. The impact has been substantial.

Third, the green supply capacity has been significantly enhanced. Efforts were made to fortify the low-carbon and green industrial chain, reinforce the industrial foundation, and drive key technological advancements. The mega-kilowatt hydropower generator set is now operating and generating power. China produces more than 70% of the global total of polysilicon, wafers, cells, and modules. Green transformation of transportation was actively promoted. The production and sales of new energy vehicles have ranked first globally for eight consecutive years, and the output of such vehicles is expected to surpass 7 million in 2022. The global market share of green shipping using LNG and methanol has approached 50%. Green building materials have been successfully promoted and used in urban and rural areas, especially going down with rural residents.

Fourth, a coordinated digital and green transformation has been enhanced. The integration and advancement of digital tech and manufacturing have increased. The digital control rate of key processes in key areas increased from 24.6% in 2012 to 55.3% in 2021. Efforts were made to optimize the energy efficiency of new infrastructure. Currently, the average energy consumption of a 5G base station has decreased by over 20% from its initial commercialization stage, and 153 national green data centers have been established. The average PUE of large and above data centers planned and under construction nationwide has decreased to 1.3.

Next, we will conscientiously implement the guiding principles of the 20th CPC National Congress and work to maintain harmony between humanity and nature in our development. We'll actively promote peak carbon emissions in the industrial sector and build a green and low-carbon tech system as well as a green manufacturing support system. We aim for industrial transformation and development toward a high-end industrial structure, low-carbon energy consumption, circular resource utilization, clean production processes, digital manufacturing, and green product supply.

Thank you.

CCTV:

In recent years, green industries have attracted wide attention and become a new driving force in economic growth. What measures has China taken to develop green industries, and how are they going so far? Thank you. 

Zhao Chenxin:

Thank you for your questions. To vigorously develop green industries and cultivate a new, green driving force in development is an important approach to accelerating the transition to a green development model. In the past decade, various localities and departments across China have worked on resource conservation and environmental protection, which have in turn promoted the development of green industries. Here are some facts about our progress: 

First, we have strengthened ecological and environmental protection and created massive market demand. Since the 18th National Congress of the Communist Party of China, we have made solid gains in the battle against pollution, enhanced ecological protection and restoration, promoted the green transition of traditional industries and upgraded them, and vigorously developed clean energies, providing key development opportunities for green industries. With the rollout of policies aimed at carbon emissions peak and carbon neutrality, green industries have grown at an even faster pace. In recent years, the output of energy conservation and environmental protection industries and new energy industries has grown at an annual average rate of over 10%, with China leading the world in the manufacture of clean energy-generation facilities. And as Minister Xin just said, China's output and sales of new energy vehicles have topped the world for eight consecutive years. 

Second, we have utilized all kinds of policy tools to incentivize and encourage the development of green industries. With the use of fiscal policies, tax, price, and other measures, various departments have worked together to support the development of green industries. In the past 10 years, more than 100 billion yuan in central government budget has been allocated to support the construction of environmental infrastructure. During the 13th Five-Year Plan period (2016-2020), the central government allocated nearly 200 billion yuan in ecological protection subsidies annually. More than 50 tax and fee preferential policies have been implemented, and the resource and environment pricing mechanism has been constantly improved. We have also set up a system of green product assessment standard, ramped up green government procurement, and encouraged the consumption of green products. 

Third, we have strengthened innovation in green technologies and promoted the industrial application of green technologies. China has constantly ramped up sci-tech innovation. At the end of 2021, the number of in-force invention patents in China's energy conservation and environmental protection industries and new energy industries stood at 49,000 and 60,000, respectively, which were 1.6 and 1.7 times from the end of 2017, demonstrating relatively rapid development. A green technology equipment manufacturing system covering energy conservation, water conservation, environmental protection, renewable energy, and other areas has been formed. In addition, technologies in new energy, pollution control, and environment monitoring have become advanced by international standards, and technologies have increasingly led the development of industries. 

Fourth, we have robustly developed green finance to provide financial support for green industries. We have improved green finance policies and promoted the establishment of a multilevel green finance product and market system. At the end of 2021, China's green loan balance in RMB and foreign currencies stood at 15.9 trillion yuan, and its outstanding green bonds stood at 1.1 trillion yuan, both ranking among the largest in the world.

Green industries have become a new driver of economic growth and are demonstrating their sound momentum. The development of green industries requires attention and support from all sides. From the government side, we will ramp up policy guidance and promotion and keep lending support to green industries in order to promote their sound and sustained development. Thanks.

China Daily:

Over the years, we have seen environmental conditions becoming better and better. There are more lucid waters and lush mountains, and humanity and nature coexist in perfect harmony. I wonder, what has been done in the area of ecological and environmental protection to build beautiful homes featuring harmony between humanity and nature and accelerate green and low-carbon development? What has been achieved so far? And what measures will be taken next? Thank you. 

Zhao Yingming:

Thank you for your questions. Making eco-environmental progress and strengthening ecological and environmental protection should not only meet people's growing desire for a beautiful environment but also promote high-quality development as well as green and low-carbon development. With the sound guidance of Xi Jinping Thought on Ecological Civilization, we moved from firmly deciding to battle pollution to working on pollution control and making further progress in the battle against pollution. The past decade has witnessed unprecedented measures, efforts, and achievements in China's ecological and environmental protection. In summary, there are four key areas of work in building beautiful homes featuring harmony between humanity and nature and achieving green and low-carbon development. 

First, we have worked to resolve prominent ecological and environmental problems. We have adopted a targeted, scientific, and law-based approach to curb pollution; further addressed air, water, and soil contamination; and continued to improve China's ecology and environment. The average PM2.5 density in China's cities at prefecture level and above dropped from 46 micrograms per cubic meter in 2015 to 29 micrograms per cubic meter in 2022. China has made the fastest progress in air quality improvement in the world. Last year, the proportion of surface water at or above Grade III in the country's five-tier water quality system reached 87.9%. China has also effectively brought the threat of soil contamination under control and banned the import of foreign waste, fulfilling its goal of "zero import" of solid waste. We have also ramped up efforts to protect and restore ecosystems and made solid gains in biodiversity protection. Thus, the Chinese people have a stronger sense of gain, happiness, and security in terms of ecology and environment. 

Second, we have taken active steps to advance the Beautiful China Initiative. A series of measures have been adopted to strengthen environmental protection and build a beautiful China. Major strategies for regional development have been implemented concerning the Beijing-Tianjin-Hebei region, the Yangtze Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta, and the Yangtze River basin and Yellow River basin. Joint protection of the regional eco-environment and joint prevention and control of pollution have been strengthened. Hubs for green development and pilot zones for building a beautiful China have been established. Coordinated efforts have been made to promote innovation demonstrations in key areas. The first branch of 18 beautiful rivers and lakes and eight beautiful bays have been built. The construction of "zero-waste cities" has been launched in 113 cities at and above the prefecture level and eight special areas. Demonstration initiatives have been launched for eco-environmental progress. Currently, 468 national demonstration zones for eco-environmental progress and 187 practice and innovation bases for turning natural resources into economic gains have been established, vividly demonstrating various examples of a beautiful China.

Third, we have made extensive efforts to advance green and low-carbon development. The pursuit of synergy in reducing pollution and carbon emissions has been taken as a key task in promoting green transition in all respects of economic and social development and the Implementation Plan on Pursuing Synergy in the Reduction of Pollution and Carbon Emissions has been published and implemented. Pollution prevention has been strengthened at the source. The region-specific environmental management system of "three lines and one list" (i.e., enforcing red lines for ecological conservation, setting the threshold for environmental quality, imposing a ceiling on resource utilization, and implementing a negative list of environmental standards for market access) has been implemented. Environmental impact assessments and management have been further advanced. Moreover, strict environmental standards for project approval have been enforced. Synergy in reducing pollution and carbon emissions has been promoted in key fields such as industry, transportation, urban and rural construction and agriculture. Adjustment and improvement in industrial structures, the energy mix and transportation structure have been advanced. Construction has begun on the first collaborative innovation zone to reduce pollution and carbon emissions. The Environmental Code of Conduct for Citizens (for Trial Implementation) was published, and a green and low-carbon lifestyle has been strongly advocated.

Fourth, China has fully engaged in global environmental governance. China successfully hosted the 15th Meeting of the Conference of the Parties to the Convention on Biological Diversity. The U.N. biodiversity deal, entitled the Kunming-Montreal Global Biodiversity Framework, was adopted in the second phase of the meeting earlier. Serving as the host of the COP15 is the first time China has held the presidency of an important international environmental convention and facilitated negotiations and the adoption of agreements among international communities. It is also a new practice for China to take a leading role in global environmental governance. China has worked to bring about positive results at the 27th Meeting of the Conference of the Parties to the United Nations Framework Convention on Climate Change, promoted green development under the Belt and Road Initiative, and launched the Belt and Road Initiative International Green Development Coalition (BRIGC) and the BRI Environmental Big Data Platform. Pragmatic measures have been adopted to carry out multilateral and bilateral environmental cooperation, and active steps have been taken to promote South-South cooperation on ecological conservation and climate response, making positive contributions to maintaining sustainable global development. 

Next, we will thoroughly study and implement the guiding principles of the 20th CPC National Congress and aim to build a beautiful China. We will coordinate industrial restructuring, pollution control, eco-environmental conservation, and climate response. We will take coordinated steps to cut carbon emissions, reduce pollution, and expand green development, while pursuing economic growth. We will promote high-quality development and a high-quality life through high-level environmental protection and make great efforts to achieve Chinese modernization based on harmony between humanity and nature. Thank you.

Changjiang Daily:

With a large population, China has long faced the problem that land resources fail to satisfy the needs of the population in the process of advancing modernization. Faced with such a reality, what measures will be adopted to coordinate the development and protection of land to promote the green transformation of China's growth model and achieve sustainable development? Thank you.  

Liu Guohong:

Thanks to this reporter for the questions. As is known to all, China's basic national condition is that it has a large population but limited land resources. Therefore, to achieve sustainable economic and social development the only way out is to strictly protect arable land and use intensive land efficiently. The measures we have adopted can be generalized into four aspects. That is, strictly controlling the "increment", vitalizing the "stock", improving the structure, and enhancing efficiency. Let me elaborate on each of them.

First, we will strictly control additional land use for nonagricultural purposes. Arable land is the lifeline of grain production and, thus, is the most valuable resource. We must adhere to the strictest possible system for the protection of farmland, implement strict regulations on land use and prevent the arable land and other agricultural land from being used for construction purposes. During the 14th Five-Year Plan period, the area of additional land designated for construction projects nationwide will be kept at 1.97 million hectares, with a reduction of 200,000 hectares over the 13th Five-Year Plan period.

Second, we will put existing resources to good use. We will reform the way of managing land use plans, ensure that land stays with the project it is allocated to, and implement the mechanism for coordinating the consumption of existing resources and the arrangements for additional resources to force local authorities to make great efforts to use land stock. Since the introduction of the mechanism in 2018, a total of 1.47 million hectares of land, consisting of land that had got approval but had not been provided to developers and land that had been left idle by developers, have been consumed over the past five years, over three times the area of additional land in the annual plan. It should be said that this mechanism has yielded good results.

Third, we will improve the land use structure. We will work to promote the redevelopment of land in urban areas that cannot be fully exploited in order to use the "stock" in exchange of the "increment". We will encourage the integrated development of above ground and underground spaces. We will double efforts to improve land use in rural areas in a comprehensive manner. We will ensure that the total acreage of arable land does not diminish, and the layout of permanent basic farmland remains stable. We will gradually move the arable land in higher mountains into lower areas and try to place fruit trees and forest trees along the mountains based on local conditions. These measures will release space by improving the land use structure. 

Fourth, enhancing efficiency. We will thoroughly advance the development of a sound unified rural-urban market for land designated for construction purposes, further improve the system for the paid use of state-owned land, make a big push to promote the combination of leasing and transferring of land designated for industrial purposes, and improve the secondary market for land. We will revise the standards on use of land for infrastructure purposes, expand the scope of paid use for such land, and strive to better utilize capital and technology for development. We will establish model counties (cities) for the conservation and efficient utilization of natural resources, guiding society in increasing awareness of economical and intensive use of land resources. During the 14th Five-Year Plan (2021-2025) period, we will strive to reduce the land for construction per unit of GDP. That is to say, the "land consumption" we often refer to will drop by about 15%.

The report delivered at the opening session of the 20th CPC National Congress noted that the nation will speed up the transition to a model of green development and implement a comprehensive conservation strategy. We will continue to improve the policy system for conserving various natural resources, including land, and using them efficiently, continuously promote conservation and efficient use of resources, and strive to obtain the greatest economic and social benefits with the least cost to resources and the environment.

Thank you.

China News Service:

There are some data on the typical aspects of China's cultivation of green manufacturing in Chapter 4 of the white paper. My question relates to China's green manufacturing system, which has been developing since the 13th Five-Year Plan (2016-2020) period. How is it progressing? What is its special significance to China's green development? How will you further promote green manufacturing? Thank you.

Xin Guobin:

Thank you for your question. With the support and coordination of relevant departments, we have continued to develop a green manufacturing system focused on energy saving, emission reduction and efficiency enhancement, driven by major projects and linked through the construction of green factories, green industrial chains, and green industrial parks since the 13th Five-Year Plan (2016-2020) period. China hosts a total of 2,783 green factories, 296 green supply chain management enterprises, and 223 green industrial parks, and has promoted nearly 20,000 green products. According to preliminary calculations, more than 95% of solid waste at the green industrial parks have been utilized. The energy consumption level of many green factories is better than the advanced value of the national energy consumption quota standard, and a whole-chain green product supply system from basic raw materials to terminal consumer goods has been gradually established.

As for its special significance for green development, we understand the following aspects: First, green manufacturing is an inherent requirement for promoting high-quality manufacturing development and building a modern industrial system. Second, green manufacturing is the fundamental way to break the bottleneck of resource and environmental constraints and realize sustainable development. Third, green manufacturing is a strong guarantee for promoting the economical and intensive use of resources and achieving safe development. Fourth, green manufacturing is an inevitable choice to conform to the trend of technological progress and promote the optimization and upgrading of the economic structure. Fifth, green manufacturing is also an important means of meeting people's growing demands for a beautiful ecological environment and promoting harmonious coexistence between man and nature.

Next, we will fully implement the decisions and arrangements of the Communist Party of China Central Committee and the State Council, and advance green manufacturing in the following five aspects: 

First, improve the green manufacturing and service system. We will draw up guidelines for accelerating the green, high-quality development of the manufacturing sector in accordance with new circumstances and tasks. We will make coordinated arrangements to promote green manufacturing and establish a mechanism for cultivating benchmarking enterprises in an incremental manner. 

Second, establish a policy system for green and low-carbon upgrading. We will continue to advance reduction of carbon emissions and pollution, green expansion, and economic growth in a coordinated manner and fully use fiscal, tax, financial, and other policy resources of the central and local governments to form a multi-tiered, diversified and packaged system of supporting policies. Such a system will support and guide enterprises in carrying out green and low-carbon upgrading and transformation.

Third, stress the guiding role of green and low-carbon standards. We will formulate guidelines for green and low-carbon standardization in industry and information technology to fully play the role of standardization technical organizations in various industries and speed up the formulation and revision of relevant standards.

Fourth, establish a guiding mechanism for digitally enabled green manufacturing. We will accelerate the coordinated transformation of digitalization and greening and promote the application of artificial intelligence, the Internet of Things, cloud computing, digital twins, and other next-generation information technologies in manufacturing.

Fifth, deepen international exchange and cooperation mechanisms for green manufacturing. Relying on existing multilateral and bilateral cooperation mechanisms, we will strengthen communication and exchanges on green and low-carbon technology innovation, outcome applications, policies and standards, and pragmatically advance cooperation and development. Thank you.

SSTV:

We have seen in Chapter 6 of the white paper that sound institutions and mechanisms are essential to green development. My question is, what work have we done to build and improve the system of institutions for ecological conservation and continuously improve the efficiency of green development in recent years? What has been achieved so far, and what are the plans for the next step? Thank you.

Zhao Yingmin:

Thank you for your question. Over the past 10 years, we have been focusing on building a sound system of institutions for ecological conservation with clearly defined property rights, diverse participants, as well as equal emphasis on incentives and constraints to provide a strong institutional mechanism and policy guarantee for green and low-carbon economic development. I will introduce for you three aspects: 

First, strengthening the rule of law. The past 10 years have seen the most vigorous legislative efforts, the strictest supervision and law enforcement, and the most effective implementation of the legal system on the ecological environment. Ecological advancement and conservation have been written into China's Constitution. There are more than 30 laws currently in force regarding ecological and environmental protection. They cover pollution prevention and control in fields such as air, water, soil, solid waste, and noise, as well as important ecosystems such as the Yangtze River, the Yellow River, wetlands, and black soil. The legal and regulatory system for ecological and environmental protection has basically developed. As of the end of last year, China had put in place 2,298 national ecological environment standards, effectively promoting the technological and economic progress of the industry and the optimization and upgrading of the industrial structure. We will continue to deepen the reform of the system whereby environmental protection agencies below the provincial level come directly under the supervision of their respective provincial-level agencies in terms of environmental monitoring, supervision, and law enforcement activities, and reforms for coordinated administrative law enforcement to protect ecosystems and the environment. We will improve law enforcement systems and methods, explore ways to put more than 44,000 enterprises on the positive list, strengthen the high-tech application of a comprehensive system that integrates air, space and land, and continuously improve scientific and targeted environmental law enforcement.

Second, in terms of regulatory systems, the central supervision system for ecological environment protection has served as a sharp weapon to ensure that all parties concerned fulfill their responsibilities in eco-environmental protection, which effectively addresses a series of prominent environmental problems. We have established and put in place various regulatory systems, covering the red lines for eco-environmental protection, region-specific approach to environmental management, the emissions permit, taking back the power for environmental quality monitoring, and sewage outfalls into seas and rivers. We have improved a series of accountability systems, such as the system for ensuring that Party committees and governments assume equal responsibilities for environmental protection, imposing lifelong accountability for environmental damage, mandating end-of-tenure auditing of natural resource assets for leading officials, and measures on evaluating performance in advancing ecological progress. We have piloted the compensation system for eco-environmental damage, and it is now implemented as a regular system.

Third, in terms of market mechanisms, we have put in place the carbon emissions trading system and launched the national carbon market, the world's largest in terms of the amount of greenhouse gas emissions covered, which has wrapped up its first compliance period. We have improved the green taxation system; expanded the catalog of corporate income tax credits for programs of carbon capture, utilization and storage, and comprehensive utilization of industrial waste. We supported the third-party enterprises engaged in pollution prevention and control and cut their corporate income tax rate to 15%. We also cut more than 13 billion yuan in environmental protection tax for taxpayers who emit below emission standards over the past nearly three years. We leverage the role of green finance, piloted the environment-oriented development model, and encouraged investment and financing in response to climate change. We have deepened the reform of the compensation system for eco-environmental conservation, and pushed forward the building of a mechanism where provinces situated on the upper and lower reaches of river basins compensate each other for their impact on water quality. We have made steady progress in building the legal disclosure system for environmental information and the credit system for ecological and environmental protection. The policy system for eco-environmental and economic development has been improved, playing an increasingly important role in guiding, incentivizing, and adjusting the market, which promoted the green, low-carbon transformation.

Next, we will earnestly implement the decisions at the 20th CPC National Congress, improve institutions and mechanisms for eco-environmental conservation, push forward the building of legal systems for eco-environmental protection, and enhance regulatory systems. We will step up efforts to improve fiscal, taxation, financial, investment, and price policies, as well as the system of environmental standards, to support green development. We will accelerate efforts in enhancing the governance system and governance capacity in the field of eco-environmental protection to better promote green, low-carbon development. Thank you.

Zhonghongwang.com:

The white paper mentioned that in the past decade, China has improved the efficiency of resource utilization, such as in the usage of energy, water, land, and raw materials. Could you please share relevant examples with us? Thank you.

Zhao Chenxin:

Thank you for your question. China is a major resource consumer. Conserving energy, resource, and improving resource utilization efficiency is of great significance to China and even global resource security. In the past decade of the new era, China has fully implemented Xi Jinping Thought on Ecological Civilization and adopted strong and effective measures to greatly improve the efficiency of resource utilization.

First, we have strengthened planning and guidance. China has incorporated indicators of resource conservation into its five-year plans, established and improved the evaluation assessment system, and promoted departments and local governments to fulfill their responsibilities. The State Council and relevant departments have issued a series of major comprehensive working plans on energy conservation and emission reduction, the building of a water-saving society, and the development of the circular economy. Such efforts have covered various aspects and forged synergy in pushing forward the resource conservation work. 

Second, we have strengthened energy conservation and improved efficiency in key areas. In major areas, such as industry, construction, transportation, and public institutions, we vigorously promoted energy saving through technological, management, and structural ways. In terms of industry, Mr. Xin just briefed us about green manufacturing. We have carried out the national water conservation campaign and promoted efficient irrigation in agriculture. We have strictly controlled the increase of land designated for construction projects. More efforts have been made to curb waste throughout the entire grain industrial chain. In 2021, the energy consumption per unit of the added value of industry above the designated size and water consumption per 10,000 yuan of value-added of the industry dropped by 36.2 % and 55%, respectively, from 2012.

Third, we have established and improved market-based mechanisms to promote resource conservation and increase efficiency. We have fully implemented the tiered pricing system for residential electricity, water, and gas, which encouraged the public to conserve resources as much as possible. We have introduced a differentiated electricity price policy for industries with high energy consumption. Efforts have been made to implement preferential tax treatments and explore trading systems for energy consumption rights, and water use rights, to promote the efficient allocation of resources. 

Fourth, we have strengthened legal frameworks. We have formulated and revised the Energy Conservation Law, the Anti-Food Waste Law, and Regulations on Energy Conservation by Public Institutions. We have strictly investigated and punished violations of laws and regulations. Measured against internationally high standards, we have developed and improved standards for the consumption of energy, water, and materials in key industries and products and ensured effective implementation.

Fifth, we have encouraged the participation of the whole society. Various activities have been carried out to promote resource conservation. We have worked to raise public awareness about cherishing resources and resource conservation. We have held week-long national campaigns to promote energy conservation for 32 consecutive years and week-long campaigns to promote water conservation for 31 consecutive years. Both achieved great progress. 

We will thoroughly implement the guiding principles of the 20th CPC National Congress, carry out a comprehensive resource conservation strategy, and accelerate the fundamental shift in the use of resources to pursue development on the basis of utilizing resources in a more rational, secure, and sustainable way, providing effective guarantee for building a modern socialist country in all respects.

Thank you.

China Education Television:

We noticed that there is a chapter in the white paper explaining the "green territorial configuration." Optimizing the development and protection of territorial space is an important part of it. What are the considerations in leveraging the role of territorial space planning to promote the building of a green territorial configuration? Thank you.

Liu Guohong:

Thank you for your question. A country's territorial space is the carrier for green development. General Secretary Xi Jinping stressed the need to plan economic and social development from the perspective of harmonious co-existence between man and nature. He said that we should, acting on the principles of prioritizing resource conservation and environmental protection and letting nature restore itself, develop spatial layouts, industrial structures, and ways of work and life that help conserve resources and protect the environment. The Ministry of Natural Resources has fully followed through on the important instructions made by General Secretary Xi Jinping. Efforts have been made to integrate different plans into a single master plan for territorial space development, design sound territorial space planning, which can be summarized into "five levels, three types", and put them into effect to promote the building of a green territorial configuration. Our works are mainly in three aspects, which are as follows:

The first is coordinating development and security, and supporting high-quality development while safeguarding the bottom line of resource security. For food security, priority has been given to drawing red lines for the protection of farmland and permanent basic cropland. The task of retaining at least 124.33 million hectares of farmland area will remain unchanged from 2021 to 2035. To guard the natural ecological security boundary, ecological conservation red lines have been established, and more than 30% of China's total land area is now under the protection of the red lines. To curb the expansion of urban sprawl, we have strictly controlled boundaries for urban development. We have acted in accordance with the principle that the urban development area should not be 1.1 times larger than the existing land construction area in megacities, cities with net population reduction, and cities where per capita construction land exceeds national standards, and not be 1.3 times larger in other cities.

The second is coordinating protection and development, and optimizing the development of territorial space. We have implemented a functional zoning strategy. Based on natural and geographical patterns and the carrying capacity of resources and the environment, we have optimized the strategic layout of major agricultural production zones, key ecosystem service zones, and urbanized zones, coordinated the spatial layout of water conservancy, transportation, energy and other infrastructure, and worked to build a new multi-center, networked, open, and intensive territorial space development configuration. We have encouraged urban and rural areas to use idle construction land effectively, promote endogenous and intensive urban development, and build beautiful and harmonious countryside that is desirable to live and work in.

The third is coordinating conservation and restoration, and taking a holistic and systematic approach to conserving and improving mountains, rivers, forests, farmlands, lakes, grasslands and deserts. We are taking coordinated steps to develop a national park-based nature reserve system, making overall deployments to protect and restore major ecosystems such as lands, rivers, lakes and oceans nationwide. We have launched large-scale and well-conceived greening programs, and carried out integrated protection, systematic restoration and comprehensive management of mountains, rivers, forests, farmlands, lakes, grasslands and deserts, so as to make the sky bluer, mountains lusher, waters clearer, the environment more beautiful, and the human-nature relationship more harmonious. As you may notice, not long ago, China's Shan-Shui Initiative was selected as one of the U.N.'s first 10 World Restoration Flagships, offering China's wisdom, solutions and strength for global biodiversity protection.

The report to the 20th CPC National Congress proposed developing a regional economic layout and territorial space system that complement each other's strengths and promote high-quality development; improving the functional zoning system and the development of territorial space; and advancing the Beautiful China Initiative and enhancing diversity, stability and sustainability in our ecosystems. We will fully implement the guiding principles of the 20th CPC National Congress, continue to deepen coordination in the three respects as mentioned earlier, constantly improve the territorial space planning system, and strictly implement the regulation system for the use of territorial space, so as to better advance high-quality development and achieve a high level of security. Thank you.

Phoenix TV:

The white paper calls on all countries to work together to tackle climate change and safeguard the Earth. What impact has China's green development had on the global response to climate change? What are your future considerations? Thank you.

Zhao Chenxin:

Thank you for your question, which is important. Mr. Zhao Yingmin, vice minister of ecology and environment, has participated in many negotiations on climate change and has just attended the U.N. Biodiversity Conference. His introduction was important and informative, and I would like to add a few more points.

China is the world's largest developing country, and its achievements in green development have strongly supported the global response to climate change. We are also willing to share our experience and achievements in China's green development with other countries. There is lots of relevant information in the white paper.

First, China's commitment to green and low-carbon development has enormously contributed to the global response to climate change. In the past decade of the new era, China has worked to adjust its industrial, energy and transportation structure to promote a green, low-carbon way of life and production, surpassing the target of cutting carbon intensity by 40% to 45% by 2020 compared to that in 2005. China has continued to improve its manufacturing capacity for renewable energy equipment. It now ranks first in the world for the production of wind power and photovoltaic power generation equipment, providing strong support for global energy transformation. China has also intensified efforts to protect and restore ecosystems, becoming the first country in the world to achieve "zero growth" in land degradation and a decrease in both desertification and sandification. Both China's forest coverage rate and forest stock have maintained growth, contributing more "Chinese green" to the world. Since the beginning of this century, roughly one-quarter of the global new green leaf area has come from China. Meanwhile, as I said in my previous answer and opening remarks, China has actively advanced the international negotiations on climate change, carried out South-South cooperation on climate change, promoted the Belt and Road Initiative as environmentally friendly, and made every effort to assist and help other developing countries, playing an essential role in enhancing the global capacity to address climate change.

Second, China has made a major strategic decision to achieve peak carbon emissions and carbon neutrality, injecting strong impetus into the global response to climate change. With the solemn commitment to peak its carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060, China will achieve the biggest decrease in carbon intensity in the world, with shortest time in history between achieving peak carbon emissions and carbon neutrality, which will strongly promote the process of global carbon reduction. To advance peak carbon emissions and carbon neutrality, China has set up a leading group at the central governmental level, and each province, autonomous region and municipality directly under the central government has also set up its own leading group in this regard, forming a working system coordinated from top to bottom. We have also implemented a "1+N" policy system and deployed 10 "carbon peak campaigns" to form an overall pattern featuring clear goals, rational division of work, effective measures, and smooth coordination for promoting peak carbon emissions and carbon neutrality. Thanks to the joint efforts of all sectors of society, great progress has been made in key areas. For instance, as you may know, we have made smooth progress in constructing large wind power and photovoltaic bases with a capacity of 450 million kW in sandy areas, rocky areas and deserts. The first phase of projects with a capacity of approximately 100 million kW has started construction, the information of which we have released to the public in many ways. We are also advancing the second and third phases of the project. In 2021, the proportion of new environmentally-friendly buildings in urban areas increased to 84%. China's investment in clean energy has continued to grow in recent years. According to statistics from the International Energy Agency I saw earlier, China's investment in clean energy in 2021 reached $380 billion, ranking first in the world. Many domestic and international statistics show that China actively encourages the world to achieve carbon reduction targets with practical actions.

Next, China will stay committed to implementing the major strategic decision to achieve peak carbon emissions and carbon neutrality, accelerate its development model's green transformation, and continue contributing to the response to global climate change. First, we will take active yet prudent steps to achieve China's carbon peak and carbon neutrality goals, and strike a balance between development and emission reduction, the big picture and respective situations, long-term and short-term goals, and between the government and the market. Second, we will, based on China's energy resource endowment and its actual conditions, advance the energy revolution and accelerate the planning and construction of a new energy system in accordance with overall planning and the principle of establishing the new before abolishing the old. Third, we will improve China's industrial structure at a faster pace to promote green and low-carbon industrial development. Fourth, we will advance the efficient and intensive use of all resources, and continue to improve the efficiency of their use, as I have mentioned. Fifth, we will continue to improve the green and low-carbon policy system, and pool more resources and production factors to promote green development. Sixth, we will play an active role in global governance on climate change, carry out extensive international cooperation in the green and low-carbon fields, and work to build a clean and beautiful world. Thank you.

Xing Huina:

Today's press conference has now concluded. Thank you, speakers. Thank you to all my friends in the media. Goodbye.

Translated and edited by Zhang Liying, Wang Qian, Wang Yiming, He Shan, Zhang Lulu, Wang Yanfang, Xu Kailin, Ma Yujia, Wang Mengru, Zhang Junmian, Cui Can, Huang Shan, Xu Xiaoxuan, Duan Yaying, Liu Sitong, Li Huiru, Daniel Xu, 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:

Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT) 

Zhao Zhiguo, spokesperson of the MIIT and director general of the Bureau of Information and Communications Administration of the MIIT

Tao Qing, an official of the Bureau of Operation Monitoring and Coordination of the MIIT

Chairperson:

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

Date:

Jan. 18, 2023

Xing Huina:

Friends from the media, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT). Mr. Tian will brief you on the development of the industry and information technology sector in 2022 and take your questions. We are also joined by Mr. Zhao Zhiguo, spokesperson of the MIIT and director general of the Bureau of Information and Communications Administration of the MIIT, and Ms. Tao Qing, an official of the Bureau of Operation Monitoring and Coordination of the MIIT.

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

Tian Yulong:

Ladies and gentlemen, friends from the media, good afternoon. As the new year begins and the Spring Festival approaches, I would like to take this opportunity to extend my best Chinese New Year wishes to you in advance and wish you happiness and good luck in the upcoming Year of Rabbit. I'd also like to thank you for your continued interest in and support for the development of the industry and information technology sector. Now, I'll brief you on the sector's general situation in 2022.

The year 2022 was of crucial significance in history to both the Communist Party of China (CPC) and the nation. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the MIIT, together with all localities and government departments, has thoroughly implemented the decisions and plans of the CPC Central Committee and the State Council. It has acted in full accordance with the key requirements of ensuring effective COVID-19 containment, economic stability, and development security. It has also proactively responded to the shocks of unexpected factors. As a result, China's industry and information technology sector achieved generally stable growth while making further progress. Specifically, the industrial economy has resumed steady growth with a promising outlook; the information and communications technology (ICT) industry has posted a stable growth; and the industrial and supply chains has achieved unimpeded and stable operations. In addition, the industrial sector's contributions to the national economy have further increased; the nation's industrial development has shown greater resilience; and the specialized development of small- and medium-sized enterprises (SMEs) has been further accelerated. In general, the sector has the following four highlights.

First, the industrial economy has resumed its steady growth with a promising outlook, and its role as an anchor of the macro economy has become even more evident. Ensuring stable growth was high on the agenda last year. Given this, we took multiple measures to expand investment, boost spending, and stabilize foreign trade, and our efforts to ensure the unimpeded and stable operations of industrial and supply chains have paid off. In 2022, China's added value of industries above the designated size grew by 3.6% year on year, and that of the manufacturing industry increased 3% year on year. Investment in the manufacturing sector climbed 9.1% from a year earlier, and the export delivery value of industrial enterprises above the designated size rose 5.5% year on year. The industrial economy provided a strong support for stabilizing the macro economy. The industrial sector contributed to 36% of the nation's economic growth, a relatively high level compared to recent years. The industrial sector lifted the nation's economic growth by 1.1 percentage points, which included a boost of 0.8 percentage points from the manufacturing industry. The added value of the manufacturing industry accounted for 27.7% of the nation's gross domestic product (GDP), up 0.2 percentage points over the previous year.

Second, industrial restructuring, transformation, and upgrading have been thoroughly advanced, and industrial development has shown greater resilience. We have continued regarding high-quality development as our top priority and strived to promote industrial restructuring, transformation, and upgrading. As a result, the manufacturing sector has become higher-end, smarter, and more eco-friendly at an accelerated pace. A number of sci-tech innovation achievements have been made. For example, China's first self-developed C919 large passenger aircraft was delivered at the end of last year. Breakthroughs were also made in the whole machine and key spare parts of China's self-developed extracorporeal membrane oxygenation (ECMO), which has been certified for marketing and put into use. A total 45 national-level advanced manufacturing clusters and another 100 SME clusters for distinctive local business were developed. The industrial internet has been used in 45 major categories of the national economy, and there has been more than 240 influential industrial internet platforms, injecting new impetus to industrial upgrading. Steady progress has been made in the eco-friendly and low-carbon transformation of industries. In the first 11 months of 2022, the energy consumption per unit of added value of industries above the designated size dropped 1.4% year on year. The added value of high-tech manufacturing industry grew by 7.4% year on year in 2022, 4.4 percentage points higher than the growth rate of the added value of the manufacturing sector as a whole. The production of new products maintained a high growth rate. In particular, the production of new energy vehicles has been ranking first globally for eight consecutive years, and their production and sales grew by 96.9% and 93.4% year on year, respectively. This speaks volumes for the resilience and stability of industrial development.

Third, the ICT industry posted a stable and continuous growth, and industrial integration further enabled the sector's development. We continued leveraging the leading role of new-generation information technologies, and ramped up efforts to develop new business forms and tech applications. In 2022, the revenue of China's telecommunication sector grew by 8%. Investment in the sector continued to expand, and infrastructure kept improving. China built 887,000 new 5G base stations in 2022, and the total number amounted to 2.312 million, accounting for over 60% of the global total. Among Chinese cities, 110 have reached the standard of building 1000M fiber optic networks. The number of mobile Internet of things (IoT) connections in China reached 1.84 billion, making China the first among major economies to have more IoT connections than internet users. The number of 5G users reached 561 million, accounting for one-third of all mobile phone users, 2.75 times that of the global average. Integration of tech applications were further accelerated. More than 50,000 5G applications have enabled multiple sectors such as industries and healthcare services. The management of mobile applications saw further progress in 2022, and users' rights and interests were effectively safeguarded. More efforts were made to strengthen the protection of critical information infrastructure and improve data security management in industry and information technology sector at an accelerated pace. The capacity to ensure emergency communications continued to strengthen, and the nation's basic telecommunication networks maintained their safe and stable operations. The ICT industry has effectively supported and guaranteed economic and social development and the construction of the digital economy.

Fourth, policy planning continued to take effect, which further boosted business confidence. We earnestly implemented the decisions and plans of the CPC Central Committee and the State Council, kept policy planning as our main focus in order to stabilize growth, and continued to unleash policy dividend and boost business confidence. We scaled up the efforts to carry out the policy package on stabilizing economy and its follow-up measures. We also worked with relevant government bodies to introduce a series of policy documents on further boosting the industrial economy and providing assistance to SMEs. We organized and rolled out 27 plans in the industry and information technology sector for the 14th Five-Year Plan period (2021-2025), in a bid to ensure the coordination and implementation of key industries, projects, and programs. The driving force of these policies and plans has translated into a strong momentum to restore the industrial economy and boosted business confidence and expectations. In 2022, China's tax and fee cuts, tax refunds, and tax and fee deferrals for all types of market entities topped 4 trillion yuan, about 40% of which were offered for micro and small businesses. This has created a solid guarantee to ease the difficulties of SMEs and enable their sound and stable development.

In 2023, the development of the industry and information technology sector still faces a severe and complicated domestic and overseas environment. In particular, the sector's stable operations in the first quarter requires arduous efforts. We believe that, with the optimization of COVID-19 response and the effect of both existing and new policies, we have the confidence, resolve, and ability to cope with various difficulties and challenges. Looking forward, we will fully carry out the guiding principles of 20th CPC National Congress and the decisions and plans of the Central Economic Work Conference. We will keep ensuring stable growth high on the agenda and strive to expand demand, foster market circulation, assist businesses, strengthen growth momentum, and stabilize expectations. We will see to it that the industry and information technology sector achieve new progress, expedite the development of new industrialization, and make new and greater contributions to building a modern socialist country in all respects.

That concludes my introduction. Next, my colleagues and I will take your questions. Thank you.

Xing Huina:

The floor is now open for questions. Please indicate the media organization you work for before raising questions.

Yi Cai:

In recent years, the new energy vehicle industry has maintained rapid development. Can you talk about the development of this industry in 2022? What measures will be adopted by the MIIT to promote its high-quality development? Thank you!

Tian Yulong:

Thank you. I will answer your questions. The new energy vehicle industry is a major direction for the transformation and upgrading of the global automobile industry. This industry has been developing rapidly in all countries. And it is also an important option for emission reduction. Last year was another bumper year for the development of the new energy vehicle industry, mainly reflected in the following aspects.

First, China has been leading the world in market size. In 2022, a total of 7.058 million new energy vehicles were produced, and 6.887 million were sold, with a year-on-year increase of 96.9% and 93.4%, respectively, ranking top globally for eight consecutive years. The sales of new energy vehicles accounted for 25.6% of the total sales of new vehicles. The data is promising, and the industry shows a strong momentum for development.

Second, new breakthroughs have been made in key technologies. The energy density of mass-produced power batteries stood at 300 watt-hours per kilo, reaching an advanced level globally. The gravimetric specific power of the driving motor surpassed 4.8 kWh per kilo, with the highest rotational speed reaching 16,000 rpm. These indicators show that great improvement has been achieved in key components and parts. In particular, breakthroughs have been made in technologies concerning laser radar, AI chips, and intelligent cabins, reaching an advanced global level.

Third, brand competitiveness has markedly improved. In 2022, sales of Chinese-brand new energy passenger vehicles took up 79.9% of the total sales in the domestic market, up 5.4% year on year. The new energy vehicle exports reached 679,000, a 1.2-fold increase over the previous year. Among the global top 10 enterprises in terms of sales of new energy vehicles, three are Chinese enterprises. Among the global top 10 enterprises in terms of installed capacity of power batteries, six are Chinese. The competitiveness and brand impact have been increasingly stronger. 

Fourth, supporting facilities have been increasingly optimized. As of the end of 2022, a total of 5.21 million charging plies and 1,973 battery charging stations have been established. 2.593 million charging piles and 675 battery charging stations were added in 2022. The construction of battery charging and swapping facilities has been notably accelerated. At the same time, over 10,000 service outlets for recycling power batteries have been built, basically ensuring that people can access battery recycling services close to home.

Currently, China's new energy vehicle industry has entered a period of market expansion across the board and maintained rapid growth. Next, we will strengthen our work in the following aspects.

First, stronger policy support will be provided. We will work with relevant departments to establish a coordination mechanism for developing this industry and strengthen coordination and synergy between central and local governments. In particular, we will promote the implementation of supporting policies concerning vehicle purchase tax, vehicle and vessel tax, license plates, and others. We will formulate a roadmap for green development of the automobile industry, revise and issue "double credits" management provisions for corporate average fuel consumption and new-energy vehicles, and launch trials for the market access of intelligent connected vehicles.

Second, steady performance will be ensured. We will conduct research on formulating follow-up supporting policies for the new energy vehicle industry. We will promote the application of battery-charging facilities and the development of fuel-cell vehicles. In particular, we will launch pilot programs in establishing pioneering zones for comprehensive electrification of vehicles in public areas in cities. Further steps will be taken to promote quality brands, and to maintain consumer market stability.

Third, integrated innovation will be supported. We will give full play to the role of leading enterprises and national manufacturing innovation centers and promote small, medium, and large enterprises to pursue development through greater synergy. We will accelerate research and industrial development of new technologies, including new types of batteries, automotive-grade chips, and automotive operating systems, advance integrated development of autonomous driving vehicles and the cooperative vehicle infrastructure system, and enhance the integrated and innovation-driven development of the new energy vehicle industry and sectors such as energy, transportation, and ICT.

Fourth, the development environment will be optimized. We will carry out strict management of production access and provide stronger guidance for investment to avoid low-level and redundant construction. Development and distribution of domestic and overseas resources will be carried out in a coordinated way to ensure the supply of raw materials and key parts. Regulations on recycling power batteries will be formulated at a faster pace to improve the system for recycling power batteries. Greater efforts will be taken to advance the construction of charging piles, and their accessibility will be improved to provide sound facilities and environment for the development of new energy vehicles.

Thank you!

China Electronics News:

The industrial internet plays a crucial role in promoting deep integration of the digital economy and the real economy, and it has been producing positive effects on advancing the transformation and upgrading of traditional industries. What new progress was made regarding China's industrial internet in 2022? What will be done to advance wider application of the industrial internet? Thank you.

Zhao Zhiguo:

Thank you for your questions. In 2022, we resolutely implemented the decisions and plans of the CPC Central Committee and the State Council, sped up the development of the industrial internet, with the total output value of this industry estimated to be 1.2 trillion yuan, providing strong support for high-quality economic and social development.

First, an analysis system for industrial internet identification has been fully established. Five national top-level nodes covering the eastern, western, southern, northern, and central regions and two nodes for disaster tolerance and backup have been put into use. Second-level nodes have fully covered 31 provinces (autonomous regions, municipalities) and provided services for nearly 240,000 enterprises. Over 240 influential industrial internet platforms have been developed, with 28 cross-industry and cross-sector platforms, effectively promoting data sharing and resource coordination among the whole process of product development, all links of production, and upstream and downstream supply chains, and accelerating digital transformation of enterprises.

Second, the "5G+Industrial Internet" 512 Project has been accomplished successfully. Five public service platforms for the industry have been built, providing services for industrial enterprises in their application of 5G technologies. Over 4,000 projects have been launched in more than 10 key industries, including automobile and mining industries. The application of 20 typical application scenarios such as coordinated research, development and design, and the remote control of equipment have been promoted at a faster pace, effectively promoting enterprises to improve quality, reduce costs, and increase efficiency. The integration of the industrial internet and 5G has produced an increasing variety of products. The price of modules has dropped by 80% from the early stages for commercial use. Waves of constructing 5G connected factories have swept across the country, advancing the application of 5G technologies to the core links of production.

Third, multiple measures have been adopted to empower the transformation of the industry. Based on the common needs of the industry, we have developed a batch of carriers to serve the promotion of the application of the industrial internet and foster low-cost and lightweight solutions, lowering the thresholds for enterprises, especially SMEs, to carry out digital transformation. Focusing on the characteristics of various industries, we have formulated and promoted the guidance for integration and application of the industrial internet for over 10 key industries, such as the steel industry and the electronic industry, guiding the industries and enterprises to apply the industrial internet in accordance with the conditions specific to their industries and enterprises. Addressing weak links, we have implemented innovative projects for the industrial internet development, advanced research and industrialization of key technologies and products, and issued a series of national standards, industrial, and group standards, furthering improving the system of standards.

Next, our work will focus on three aspects to accelerate the large-scale development of the industrial internet, promote deep integration of the digital economy and real economy, keep unleashing momentum for industrial upgrading, and support the industrial economy to steadily rebound. 

First, we will optimize the environment by enhancing policy guidance. We will, together with other government departments and local authorities, take solid steps to advance the implementation of a three-year action plan (2021-2023) for the innovative development of the industrial internet to ensure that all work will be accomplished. We will formulate policies and measures to promote the large-scale development of the industrial internet, further improve the top-level design, make good and full use of fiscal, tax, and financial policies, and strengthen cooperation between industry and finance and integration between industry and academia to further create a sound development environment. 

Second, we will create more drivers for development by promoting innovation. We will enhance technological innovation and continue to implement innovative projects for industrial internet development, strive to make major breakthroughs in technologies, and improve the system of standards to remove the major obstacles hindering the large-scale development of the industrial internet. We will deepen industrial innovation, support all kinds of market entities such as telecommunication enterprises, internet platform companies, and industrial enterprises to leverage their strengths and create greater synergy. We will make great efforts to nurture leading enterprises and specialized and sophisticated SMEs that produce new and unique products, and strengthen the industry alliance for the industrial internet to create a healthy and sustainable environment for the industry. 

Third, we will push for wider application by accelerating the promotion and popularization of the industrial internet. We will move faster to foster advanced factories, and encourage enterprises to carry out the digital transformation of factories by means of 5G and other technologies to promote wider applications of new technologies, new scenarios, and new models. We will accelerate upgrading clusters of industries, launch the campaign to promote the application of the industrial internet in 1,000 industrial parks of 100 cities and summarize and promote successful cases to advance digitalization and green development of industrial parks. We will expand the application of the industrial internet in key sectors and in key industrial chains, and widely promote supply-demand matching to promote high-quality development of the real economy by large-scale application of the industrial internet.

Thank you!

CCTV:

The report to the 20th CPC National Congress has underlined that the resilience and security of China's industrial and supply chains will be improved. What has been done by the MIIT to enhance the resilience, security, and competitiveness of industrial and supply chains? What measures will be adopted next? Thank you.

Tian Yulong:

Thank you. We will have Mr. Tao Qing answer your questions. 

Tao Qing:

Thank you for your questions. Since the beginning of 2022, the MIIT has resolutely implemented the decisions and plans of the CPC Central Committee and the State Council, taken it as a top priority of its work to maintain security and stability in industrial and supply chains and worked with relevant departments to effectively respond to the impact of unexpected factors. With all these efforts, the overall security and stability of the manufacturing industry in China have been maintained, and the resilience of China's industrial and supply chains has been further enhanced. First, we have given equal emphasis to short-term response and long-term prevention and made every effort to ensure smooth circulation of industrial and supply chains to consolidate the foundation for ensuring stability. Especially when responding to the impact of the pandemic in April last year, we rapidly established a white list system for enterprises in key industrial and supply chains and promoted work and production resumption along industrial chains in a coordinated and systematic way. We have built up coordination platforms for key industrial and supply chains such as integrated circuits, automobiles, and medical supplies, established a "red light" early warning mechanism for auto parts inventory, and a "red, yellow, and blue" early warning coordination mechanism for bulk raw material supply, and helped to resolve problems that concerned enterprises one by one to ensure stability in key industrial chains. Meanwhile, we have comprehensively summarized the experience, guided local authorities to strengthen early warning and monitoring of emergencies, and set up contingency plans in advance to resist risks to reinforce the ability to withstand risks. Second, we have worked to shore up weak links and build up strengths at the same time and adopted a package of steps to strengthen the core competitiveness of the industrial and supply chains. We have held International Forum on Resilient and Stable Industrial and Supply Chains. General Secretary Xi Jinping has sent a congratulatory letter to the forum. During the forum, we, together with Indonesia, and five other countries, have jointly released the Initiative of International Cooperation on Resilient and Stable Industrial and Supply Chains. Focusing on the blockages in industrial and supply chains, we have launched projects to achieve breakthroughs in core technologies in key fields and projects for upgrading foundational industrial infrastructure to promote breakthroughs in important basic products and core technologies in key fields. We have given play to the guiding role of plans in promoting traditional competitive industries and emerging industries to break growth bottlenecks. We have fostered clusters of advanced manufacturing, with global competitive edges in some areas taking shape. We have promoted the development of specialized and sophisticated SMEs that could produce novel and unique products and given play to the leading role of competitive enterprises to boost the dynamism of the manufacturing industry.

Next, we will keep putting equal emphasis on development and security, give priority to major tasks of shoring up weak links, building up strengths, consolidating foundations, and fostering clusters of industries, and accelerate the upgrading of the industrial base and modernization of industrial chains. Our work will mainly focus on the following three aspects.

First, we will cement foundations and move faster to shore up weak links. We will implement projects for upgrading foundational industrial infrastructure and projects to achieve breakthroughs in core technologies in key fields to build a more self-supporting, safer, and more reliable industrial system with their risks better controlled. We will encourage leading enterprises in industrial chains to strengthen cooperation with upstream and downstream SMEs on technology research, production verification, and standards setting to enhance collaborative innovation and integrated development of industrial chains.

Second, we will consolidate the advantages and create new growth drivers. We will take active steps to reinforce advantages in key advantageous areas, enhance the competitiveness of traditional industries, and accelerate the deep integration of the new generation information technology and the manufacturing industry. We will work hard to develop the digital economy, seize new strategic opportunities, accelerate the development of new technologies, new forms and new models, and promote the development of advanced manufacturing clusters.

Third, we will guard against risks and ensure stable and smooth industrial and supply chains. We will improve the ability to identify and cope with risks, strengthen the monitoring of key areas and key industries, and strengthen synergies between departments and regions to enhance the ability to cope effectively with risks in a coordinated way. We will expedite the implementation of policies on benefiting enterprises and keeping business operations stable, and guarantee the supply of industrial production factors to ensure normal production and operations of enterprises to the maximum possible extent.

Thank you!

ThePaper.cn:

Recently, the demand for medicine and medical devices such as antipyretic and analgesic drugs and oxygen concentrators has increased. What is the current production and supply situation of medicine and medical devices? What's the MIIT's judgment about the next stage of their production and supply? Thank you. 

Tian Yulong:

Thank you for your questions. Recently, the MIIT has implemented the decisions and deployments of the CPC Central Committee and the State Council in conjunction with relevant departments. Under the direct command of the joint COVID-19 prevention and control mechanism, the MIIT, leading this mechanism's medical supply support group, has further guaranteed access to medical supplies together with group member departments and relevant localities. We have also made every effort to help pharmaceutical and medical enterprises fulfill their production goals as well as stabilize and expand production and capacity. We have increased the supply of key drugs in the market and guided their reasonable, orderly, and precise distribution. The current characteristics are as follows:

First, we have made every effort to ensure the production and supply of key medical materials. In terms of drugs, as of Jan. 17, on the basis of maintaining a production capacity of 200 million tablets for 17 consecutive days, 5.14 billion tablets of two key antipyretic and analgesic drugs - ibuprofen and acetaminophen - have been supplied, which can fully meet the medicine demand. In terms of medical equipment and devices, as signs of higher demand for medical resources for severe case treatment emerge, the MIIT recently focused its work on "preventing severe cases and ensuring equipment supply" in a timely manner. As of Jan. 17, the daily output of Azvudine, a small-molecule antiviral drug, has increased by 148% to 744,000 bottles compared with before New Year's Day. Daily output and production capacity have been greatly improved, which can meet the medicinal needs of medical institutions for patients with severe conditions as well as subsequent severe cases. Currently, thanks to a rising scale in production, the daily output of invasive ventilators has increased by 239% to 1,808 units compared with that before New Year's Day. The daily output of oxygen concentrators has increased by 280% in four days, and the maximum daily output can exceed 20,000 units. The supply of oxygen concentrators has been able to meet the basic needs of medical institutions. The daily output of much-needed finger pulse oximeters has exceeded 460,000 units, which can not only meet the needs of medical institutions but can also gradually and sufficiently supply society's needs.

Second, we have conducted precise distribution to prioritize needs in key areas. We share people's concerns. In accordance with the principle of "focusing on key areas and providing targeted distribution," we have worked with relevant departments to actively align with the departments in charge of civil affairs, rural affairs, education, among others and provided targeted medical supplies for key areas (populations), such as in elderly care, rural areas, and schools. Since mid-December last year, we have delivered nearly 136 million doses of drugs through large e-commerce platforms and local drug support platforms, benefiting more than 60 million people in total. Thanks to the convenience and accessibility of e-commerce, we have created a precise distribution model. At the same time, we have equipped every rural clinic with two finger pulse oximeters and supplied 1.172 million finger pulse oximeters in four batches so as to bring finger pulse oximeters to rural areas. Meanwhile, through various financial drives, including corporate donations, more than 10,000 medical oxygen concentrators have been provided free of charge for more than 800 counties lifted out of poverty across the country, fully covering 10,000-plus towns and townships in these counties. We have fully met the needs of key medical supplies for old-age care and child welfare institutions nationwide, as proposed by the civil affairs departments. Currently, we are working with education departments to ensure that the needs of universities for key medical supplies nationwide are satisfied.

Third, we have smoothed the supply channels of medical supplies through various cooperations. We have worked with the transport and postal departments to prioritize delivering urgently-needed medical materials at the community level, especially in rural and remote areas, and spared no effort to link up the "last kilometer" of delivery. We have also formulated a plan to guarantee smooth logistics of enterprises during the Spring Festival and strived to ensure transport and reserve capacities during the Spring Festival and other holidays.

Next, the MIIT will continue to further support the stable production of key medical material enterprises, strengthen supplies, targeted coordinated distribution, and never reduce its efforts in ensuring supplies.

Thank you!

CGTN:

As we all know, China has been adhering to the path of green development. Especially since the carbon peak and carbon neutrality goals were put forward, a green and low-carbon transformation has been further accelerated across society. What are the future considerations of the MIIT regarding energy saving, carbon reduction, and green transformation in the industrial sector? Thank you.

Tian Yulong:

Thank you, and I'll give the floor to Ms. Tao Qing for this question.

Tao Qing:

Thank you for your question. Industry is the backbone of the national economy and its engine of growth. It is also an important battlefield for promoting green development transformation. The MIIT has thoroughly implemented the guiding principles of the 20th CPC National Congress and earnestly promoted a green and low-carbon transformation of the manufacturing industry.

First, the action plan for peaking industrial carbon emissions has been carried out in an orderly manner. Together with the National Development and Reform Commission and the Ministry of Ecology and Environment, we have issued an implementation plan for carbon peak in the industrial sector and coordinated in mapping out a timetable and a roadmap for peaking industrial carbon emissions.

Second, solid progress has been made in industrial green transformation and development. We have thoroughly implemented the plan for the green development of China's industrial sectors during the 14th Five-Year Plan period (2021-2025), introduced and implemented a package of schemes and action plans for improving energy and water efficiency, as well as comprehensive utilization of resources, and formulated the measures for supervision and inspection on industrial energy conservation. We have organized energy conservation monitoring on 3,572 key enterprises, and provided diagnostic services for 124 key enterprises and 1,187 specialized and sophisticated SMEs that produce new and unique products.

Third, green and low-carbon models have been cultivated and expanded. A number of national green factories, green industrial parks, and green supply chain enterprises have been selected. In addition, 99 green design demonstration enterprises, 282 enterprises meeting the industrial standards and conditions, and 32 pilot enterprises (parks) recycling industrial wastewater have been cultivated.

Fourth, the popularization and application of green and low-carbon technologies have been accelerated. Efforts have been intensified to popularize and apply advanced techniques, technologies, and equipment for energy and water-saving plans, cleaning and environmental protection, and comprehensive utilization of resources. Various supply-demand matching and technical training exchanges have been held online and offline.

Next, the MIIT will earnestly implement the guiding principles of the 20th CPC National Congress and the Central Economic Work Conference, take the carbon peak and carbon neutrality goals as the leading principles, take promoting green and high-quality development of the manufacturing industry as its own responsibility, and advance carbon and pollution reduction, green expansion, and growth in a coordinated manner so that green development can become the defining feature of the new type of industrialization.

First, we will accelerate the green and low-carbon transformation of the manufacturing industry. We will formulate and introduce the Guidelines for Accelerating the Green and High-Quality Development of the Manufacturing Industry, clarify the implementation measures, give differentiated guidance, and implement industry-specific policies, as well as promote the green and low-carbon development transformation of key industries, parks, enterprises, and localities in an integrated manner.

Second, we will conduct special actions for industrial energy conservation and carbon reduction. We will fully implement the carbon peak plans in the industry and key sectors. We will continue to monitor national energy conservation, and carry out in-depth activities providing industrial energy conservation diagnostic services and energy conservation services to enterprises. We will launch a number of pilot projects, including developing industrial green microgrids and digital carbon management systems.

Third, we will advance green manufacturing. On the basis of building green factories, we will accelerate the construction of the green manufacturing system and improve the evaluation index system in accordance with the new goals of achieving carbon peak and carbon neutrality.

Fourth, we will promote improving quality and efficiency in the comprehensive utilization of resources. We will carry out projects to optimize battery recycling and utilization and improve the recycling and utilization system. We will strengthen the standardized management of comprehensive utilization industries of renewable resources such as scrap steel and waste paper, promote the pilot implementation of extended producer responsibility for automobile products, and improve our ability to utilize complex and hard-to-use solid waste and emerging solid waste. We will update and publish the catalog of advanced and applicable technologies for the comprehensive utilization of industrial resources.

Fifth, we will strive to improve the level of clean industrial production. We will coordinate and promote green and high-quality development in the Beijing-Tianjin-Hebei region, along the Yangtze Economic Belt, and other areas. In particular, we will focus on steel, petrochemical, chemical, and other key water-using industries to carry out pilot recycling projects for industrial wastewater. 

Sixth, we will foster new drivers of green growth. We will vigorously develop green and environmental protection industries and cultivate key enterprises with advantages. We will improve the mechanism for promoting green transformation and guide fiscal and financial resources to increase support for the green development of the manufacturing industry.

Thank you!

Economic Daily:

As we know, the monthly data of value added of industrial enterprises above the designated size fluctuated markedly last year. How to evaluate the industrial performance for the whole year? Will the trend of recovery continue this year? Thanks.

Tian Yulong:

Thanks for your questions. As I said in my opening remarks, the industrial economy in 2022 faced a relatively severe and complex environment both at home and abroad, and was under great pressure to ensure steady growth.

Over the past year, under the support from all regions and departments, the MIIT put steady growth as its top priority, adopted a series of measures to achieve recovery of the industrial economy in a short time, and maintained sound momentum, demonstrating the "ballast" role of the industrial economy in the macroeconomic performance, as well as contributing China's share in stabilizing the global industrial and supply chains and in promoting the recovery of world economy. 

Overall, the value added of industrial enterprises above the designated size grew 3.6% year on year in 2022. The first quarter got off to a good start with a sound momentum, while it fell sharply in April and began to stabilize and rally again in May. This fluctuation was relatively large. In the fourth quarter, the downward pressure increased because of the pandemic. But on the whole, the positive trend of stability has remained unchanged. In terms of industries, key industries generally performed stably. In particular, the equipment manufacturing industry registered fast growth. In 2022, the value added of this sector grew 5.6%, contributing 50.3% to the overall industrial growth. Among them, a representative sector, including electric machinery as well as instruments and meters, increased by 11.9% and 4.6%, respectively. The automobile industrial and supply chains were fully restored, with annual production and sales rising by 3.4% and 2.1%, respectively, in 2022. Generally, the driving power of the equipment manufacturing sector was very strong. Raw material for manufacturing was growing despite of the pressure. In 2022, the value added of the sector rose 1.6% year on year, with the first three quarters running at a low level, and the growth accelerated since September. The consumer goods manufacturing gradually recovered. In 2022, the value added of the sector grew 0.6% year on year. Daily necessities industry such as food, agricultural and non-staple food, wine, beverage, and refined tea maintained certain growth.

In terms of key products, products of new energy and new drivers of growth grew rapidly, and daily necessities rose steadily. The production and sales of new energy vehicles reached 7.058 million and 6.887 million, up 96.9% and 93.4% year on year, respectively, while the output of charging piles and solar panels soared by 80.3% and 47.8% year on year, respectively. New material products grew at a high level - the production of polysilicon and monocrystalline silicon, for example, grew rapidly, reaching 64.4% and 51.8%. High-tech products also posted rapid growth, with the output of mobile communication base station equipment as well as the industrial control computers and systems increasing by 16.3% and15.0% respectively. We have guided enterprises to focus on the needs of the people and increased the production and processing of related products to effectively meet consumer needs. The output of flash frozen food and dairy products rose 3.3% and 2.0%, respectively, and the woolen fabrics up 4.7%.

In terms of regions, most provinces saw their industrial economy recovering steadily. Last year, 24 of the 31 provinces, autonomous regions and municipalities directly under the central government logged growth to value added to industry. Among them, major industrial provinces such as Jiangsu, Shandong, Zhejiang, Henan, Fujian, Sichuan, Hubei, Hunan, and Hebei posted higher growth rates than the national level. The growth rate of major economic indicators in the central and western regions took the leading position. Last year, the value added of industry of these regions increased by 6.8% and 6.2%, respectively; while the eastern region raised 3.0% year on year, showing steady signs of recovery. 

In 2023, the external environment remains complex, and the development of the industrial sector is still under great pressure. However, in general, the growth trend and pattern remain unchanged, and the economic fundamentals that will sustain long-term growth have been stabilized and consolidated. We believe that with the effective release of the vitality of market entities, the potential of consumer consumption, and the impetus for industrial upgrading, the steady recovery of the industrial economy will keep unchanged so as to provide stronger support for the macroeconomy.

That's all for me. Thanks!

Southern Metropolis Daily:

We noticed that the MIIT recently solicited public opinion on further improving the service capacity of mobile internet applications, aiming to optimize the services and enhance user experience. What achievements has the MIIT made in promoting ICT serving people's livelihoods in the past year? What's the next plan? Thanks.

Zhao Zhiguo:

Thank you for your question. The MIIT attaches great importance to the protection of users' rights and interests and personal information, and continues to improve the ICT capacity and services so as to effectively protect the legitimate rights and interests of users.

First, the quality of services has been improved, and user perception has been refined constantly. We launched campaigns to improve service perception and guided information and communications enterprises to provide quality services. We optimized the business handling process, realized online and remote telecommunication services such as plans change, contract cancellation, and other common services; promoted 100 key internet enterprises to establish customer service hotlines with real person responding to users' demands timely; prompted app stores to improve their review mechanism before launching an app. By the end of last year, the number of various high-quality apps in use exceeded 2.58 million in China, and intelligent applications have enriched people's production and life.

Second, we have improved the accessibility of convenient digital services. More solid outcomes have been delivered and shared by all. We have continued to expand the coverage of the internet, further promoted universal telecom services, supported rural and remote areas to speed up the coverage of the internet, and worked hard to realize broadband connection in all administrative villages nationwide for the first time in history. We have also adopted targeted fee cut measures like preferential policies for special groups such as micro-, small- and medium-sized enterprises (MSMEs), poor households, the elderly, and the disabled. As a result, the average rates for broadband and dedicated internet access services for MSMEs have dropped by 24.2% and 21.9%, respectively, as compared with those in December 2021. More than 32 million households of seniors and disabled people have benefited from the measures, doubling the number in 2021. By doing so, users are increasingly feeling the benefit. We have steadily improved telecom services for the convenience of senior citizens by facilitating usage and improving service quality. Enterprises have been encouraged to provide elderly users with telecom services that can be handled remotely and to resolve technical difficulties for them. A total of 648 websites and apps have finished such improvements.

Third, we have improved oversight effectiveness. Protection of users' rights and interests has been strengthened. We have enhanced management at the source, urged and guided app stores and other distribution platforms to fully harness the role of "goalkeepers," so that apps are reviewed and hit the shelves in accordance with laws and regulations. In 2022, we conducted tests on 1.51 million apps in six batches, achieving a much higher percentage of passing than in 2021. We have built a strong technology shield and established an anti-fraud platform in the ICT industry. Since 2022, we have intercepted a total of 1.82 billion scam phone calls. Cyber security and protection have been increasingly strengthened. We have improved the governance model, curbed spamming on an ongoing basis, intensified administrative guidance, and made regulatory bodies get involved at earlier stages. By doing so, complaints from users dropped to the lowest level in history.

ICT services concern the interests of hundreds of millions of users. Providing high-quality services is an important part in pursuing a people-centered development philosophy. Next, we will focus on our work in three aspects.

First, we will enhance policy guidance to foster an enabling environment for the industry. We will take action to increase the service capacity of mobile applications so that both service supply and user experience will be improved. We will also build a public service platform involving mobile applications to efficiently support the regulation and development of the industry. In addition, we will develop sound systems to coordinate our work, strengthen the self-discipline of the telecom industry, and create an enabling environment for its healthy and orderly development.

Second, we will focus on key problems to address the concerns and aspirations of the people, such as personal information protection and telecom and internet fraud. We will strengthen the regulation of apps at all stages for all entities, urge app stores, terminals, and other key links to fulfill their primary responsibility, and realize joint prevention and governance throughout the industrial chain. We will also accelerate the establishment of a united resource database for the industry to combat fraud, and step up efforts to promote the service that enables citizens to inquire about all mobile phone cards registered under their own ID numbers. Integrated protection capacity will be enhanced, and a sound environment for information consumption will be jointly fostered.

Third, we will step up efforts to improve our capacity to benefit the public and provide more convenient services. We will advance online and cross-regional handling of telecom services, carry out consumer satisfaction measurement of key internet services, speed up the improvement of websites and apps with local features, and provide more comprehensive, considerate, and satisfactory ICT services. 

Thank you.

Shangyou News:

Rapid development of the green energy equipment industry is one of the important areas of forging new industrial competitive strengths of green and low-carbon industries. How did the situation of the green energy equipment industry develop in 2022? What new measures will be taken next to further boost the industry? Thank you.

Tao Qing:

Thank you for your questions. To develop the green energy equipment industry is an important measure to promote green and low-carbon development and achieve our carbon peak and neutrality targets. In recent years, the MIIT has worked with relevant departments to issue and implement an action plan to improve energy efficiency in industries, making a big push to develop the green energy equipment industry.

First, we have accelerated the promotion of high-efficiency and energy-saving equipment. We issued a catalog of selected and recommended energy-saving technologies and equipment in the field of industry and information technologies. Also, we moved faster to promote 133 pieces of energy-saving equipment, including high-efficiency electric motors, transformers, compressors, and draught fans.

Second, we have built up manufacturing capability and competitive production capacity in the whole industrial chain of renewable energy, including wind and photovoltaic power and lithium-ion batteries. At the end of 2022, China led the world with the photoelectric conversion efficiency of self-developed silicon heterojunction cells. The output of wind power generators in China accounted for two-thirds of the world's total. The single-unit capacity continued to grow, with the capacity of the latest developed onshore wind power generator exceeding 6 MW. In 2022, the newly installed capacity of wind and photovoltaic power reached more than 120 million kW, and their cumulative installed capacity exceeded 700 million kW, driving the installed capacity of renewable energy to exceed 1.2 billion kW.

Next, we will stick to our carbon peak and neutrality targets, implement the plan to improve the energy efficiency of electric motors and transformers, organize the compiling of the energy-saving technologies and equipment catalogs in the field of industry and information technologies, and hold a series of themed events at enterprises to promote energy conservation service. By speeding up the development of the green energy equipment industry and e-energy industry in the field of wind, solar, and hydroelectric power, hydrogen energy, and energy storage, we will push green and low-carbon development to a new level and make a positive contribution to the green transition in all respects of economic and social development.

Thank you.

People's Post and Telecommunications News:

We have seen that the ICT sector achieved steady and rapid growth in 2022. What are the main achievements? What other work considerations are there for this year? Thank you.

Zhao Zhiguo:

Thank you for your question. In 2022, the MIIT conscientiously implemented the decisions and plans of the CPC Central Committee and the State Council, made stability our top priority, and pursued progress while ensuring stability, promoting the high-quality development of the ICT sector to achieve new results with a strong sense of responsibility and mission.

The first achievement is that we have created new highlights, and the scale of the ICT industry has continued to grow. The annual telecommunications services revenue was 1.58 trillion yuan, a year-on-year increase of 8%, injecting impetus into economic growth empowerment and boosting market confidence. We continuously optimized the industry structure, with the revenue of emerging businesses such as internet data centers, cloud computing, and the Internet of Things increasing by 32.4% year on year, driving the growth of telecommunications services revenue by 5.1 percentage points and becoming an important growth pole of the telecommunications services. The effective investment was steadily expanded. The investment in telecommunications fixed assets for the year reached 419.3 billion yuan, a year-on-year increase of 3.3%, and the growth rate of investment remained stable. Consumption vitality was effectively stimulated, mobile internet traffic increased by 18.1% year on year, and national online retail sales reached 13.8 trillion yuan, a year-on-year increase of 4%, driving both the quantity and quality of information consumption to increase.

The second achievement is that we have consolidated the new base, and the infrastructure construction has achieved remarkable results. We worked in coordination to promote the "Double Gigabit" networks construction, and a total of 2.312 million 5G base stations have been built and the gigabit optical networks have been expanded to be able to cover more than 500 million households, realizing "every city is covered by the gigabit optical network" and "every county can access 5G services." We coordinated the layout of data and computing power facilities, with the total number of data center racks in use across the country now exceeding 6.5 million standard racks and the average annual growth rate of the total computing power exceeding 25% in the past five years. We continued to optimize internet network architecture, added five national-level internet backbone direct connection points, increased the interconnection bandwidth to 38T, built four new switching centers, and accelerated the formation of an all-round, multi-level, three-dimensional network interconnection architecture, with the network service performance reaching an internationally advanced level.

The third achievement is that we have opened up "a new track," and the process of industrial digitalization continues to accelerate. In terms of industries, the integration of information and communications applications has accelerated to expand and deepen in the fields of industry, medical care, education, and transportation. The number of virtual private networks in the 5G industry has exceeded 10,000, and the number of mobile Internet of Things connections accounts for 70% of the global total. The industrial internet has been fully integrated into 45 major categories of the national economy. In terms of individual users, the number of apps has exceeded 2.58 million, enriching various user needs in consumption, entertainment, social networking, travel, etc., and comprehensively improving quality of life, and promoting the formation of the world's largest and most active digital service market.

Going forward, the MIIT will thoroughly implement the spirit of the 20th CPC National Congress and the plans of the Central Economic Work Conference; ensure both development and security; focus on consolidating foundations, promoting applications, and ensuring security; and consolidate the leading position of the information and communications industry in a bid to serve the high-quality development of the digital economy.

The first is to build high-quality information infrastructure. We will accelerate the in-depth coverage of the "Double Gigabit" networks; implement gigabit city construction actions; build an integrated computing power infrastructure application system with cloud-edge-terminal collaboration and integration of computing, storage, and operation; launch the "Broadband Frontier" project for universal telecommunications services; and promote high-quality development of the mobile Internet of Things, smoothing the information artery.

The second is to cultivate high-level integrated innovative applications. We will vigorously promote the integrated application of new-generation ICT such as 5G and gigabit optical networks in information consumption, vertical industries, people's wellbeing, and digital government. We will also promote the large-scale application of the industrial internet so as to lead the high-end, intelligent, and green development of industries.

The third is to build a highly reliable network security line of defense. We will comprehensively promote the construction of basic telecommunications network security capabilities, deepen the construction of data security management systems and supervision practices in the field of industry and information technology, advance the development of network and data security industries, and improve the network security system based on the security of network facilities, focusing on data security and supported by the security industry.

Thank you.

Hong Kong Bauhinia Magazine:

SMEs provide important support for China's economic resilience and are related to overall economic and social development. May I ask how the operation and development of SMEs were in 2022? What measures did the MIIT introduce to help and solve the difficulties of SMEs? Thank you.

Tian Yulong:

Thank you for your question. I will answer this question. The whole of society pays close attention to SMEs. SMEs connect thousands of households and are also an important force in promoting innovation, employment, and improve people's livelihoods. Since 2020, due to the continuous impact of the epidemic, SMEs have been greatly impacted and faced difficulty in business operations. Under the strong leadership of the CPC Central Committee and the State Council, especially by giving full play to the role of the leading group of the State Council for promoting the development of SMEs, the MIIT, together with relevant departments, has introduced a series of policies and measures to help SMEs ease their difficulties and develop healthily and steadily. Some measures have been taken in the following aspects.

In terms of tax and fee reductions in 2022, tax cuts, fee reductions, tax refunds, and tax and fee deferrals added up to more than 4 trillion yuan for various market entities throughout the year, with about 4% being enjoyed by small and micro-enterprises. In terms of increasing financing, as of the end of November 2022, the national inclusive small and micro-enterprise loan balance reached 23.2 trillion yuan, a year-on-year increase of 23.7%. In addition, the National Small and Medium Enterprises Development Fund has led social capital to invest a total of 35 billion yuan, which has played a very good role in alleviating loan difficulties. In terms of corporate innovation, we have established a gradient cultivation system for high-quality SMEs, accumulatively cultivating 8,997 national-level "little giant" enterprises with high growth potential, advanced technology and strong market competitive edge, and over 70,000 provincial-level SMEs with such strengths. In terms of services, in 2022, we launched the "Together to Benefit Enterprises" service action for SMEs, organized various high-quality resources, and provided policies, management, and technologies. We have provided more than 50 million services to SMEs. Their feelings are good. At the same time, we actively carried out special actions to prevent and resolve payment arrears to SMEs and promote the clearing of undisputed arrears in the ledger. Recently, the office of the leading group issued "Measures for Assisting in Growth Stabilization, Structural Adjustment, and Capacity Enhancement of MSMEs." The move was reported in various news outlets. The document put forward 15 specific measures to help MSMEs solve difficulties and achieve high-quality, sustainable development, especially focusing on their current difficulties and problems and based on a dual strategy of both easing difficulties and providing service, and adjusting structure and building up capabilities in parallel.

With the support of these policies, the vast number of SMEs have continued to strive for self-improvement, rise up to challenges, and overcome various difficulties to achieve stable production and operations. According to the National Bureau of Statistics, from January to November 2022, the number, operating income, and total profit of industrial SMEs above the designated size increased by 10.5%, 6.0%, and 0.3% year-on-year, respectively, demonstrating SMEs' strong resilience and vitality. A survey conducted by MIIT of 43,000 SMEs shows that in 2022, nearly 40% of enterprises had new loans, more than 60% of enterprises invested in research and development, and more than 60% of enterprises invested in fixed assets, demonstrating their growing confidence in development. At the same time, we conducted a survey of more than 1,800 "little giant" enterprises with high growth potential, advanced technology and strong market competitive edge, and found that from January to November, the profit margin of operating income of "little giant" enterprises was 10.7%, which was 5.2 percentage points higher than that of industrial enterprises above the designated size.

In 2023, the difficulties and challenges for the stable development of SMEs remain big. In this regard, all departments and localities need to join efforts. In accordance with the plans of the Central Economic Work Conference, we will continue to work unswervingly both to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector. We will further strengthen policies and measures to promote the high-quality development of SMEs, including improving the policies and environment for their development, providing better services, encouraging innovation and cultivating talents. 

Thank you.

Xing Huina:

If you have no more questions, today's briefing is hereby concluded. Thank you to the three speakers and friends from the media. Goodbye.

Translated and edited by Zhang Tingting, Li Huiru, Xu Xiaoxuan, Zhou Jing, Yan Bin, Yuan Fang, Li Xiao, Liu Sitong, Xu Kailin, Liu Qiang, Wang Qian, Zhu Bochen, Daniel Xu, 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:

Kang Yi, commissioner of the National Bureau of Statistics (NBS)

Fu Linghui, spokesperson of the NBS and director general of the Department of Comprehensive Statistics of the NBS

Chairperson:

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

Date:

Jan. 17, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are joined by Mr. Kang Yi, commissioner of the National Bureau of Statistics (NBS), who will introduce the situation and answer your questions. We also have with us Mr. Fu Linghui, spokesperson of the NBS and director general of the Department of Comprehensive Statistics of the NBS. 

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

Kang Yi:

Ladies and gentlemen, friends from the media, good morning! Welcome to today's press conference. It's a great pleasure to meet you. I'll begin by introducing China's economic performance in 2022 and then answer your questions.

In 2022, faced with challenges of high winds and choppy waters in the global environment as well as arduous tasks to advance reform, promote development, and maintain 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, coordinated the work of epidemic prevention and control and economic and social development in an effective way, and responded to the internal and external challenges effectively. As a result, the national economy continued to develop despite downward pressure, the economic output reached a new level, employment and prices were generally stable, people's lives were continuously improved, new achievements were secured in high-quality development, and the overall economic and social development was stable and healthy.

According to preliminary estimates, the gross domestic product (GDP) was 121,020.7 billion yuan in 2022, an increase of 3% over last year at constant prices. Looking at industries at various levels, the value added of the primary industry was 8,834.5 billion yuan, up by 4.1% over last year; the value added of the secondary industry was 48,316.4 billion yuan, up by 3.8%; and the value added of the tertiary industry was 63,869.8 billion yuan, up by 2.3%. In terms of quarterly data, the GDP in the first quarter was up 4.8% year on year, up 0.4% in the second quarter, up 3.9% in the third quarter, and up 2.9% in the fourth quarter. The quarter-on-quarter growth of GDP in the fourth quarter stayed the same as in the third quarter.

First, the grain output increased and production of animal husbandry grew steadily. 

The total output of grain in 2022 was 686.53 million metric tons, an increase of 3.68 million metric tons over the previous year, or up by 0.5%. Of this total, the output of summer grain was 147.4 million metric tons, up by 1%, and that of early rice was 28.12 million metric tons, up by 0.4%. The output of autumn grain reached 511 million metric tons, up by 0.4%. By species, the output of rice was 208.49 million metric tons, down by 2%; wheat, 137.72 million metric tons, up by 0.6%; corn, 277.2 million metric tons, up by 1.7%; soybeans, 20.28 million metric tons, up by 23.7%. The output of oil-bearing crops was 36.53 million metric tons, up by 1.1%. The total output of pork, beef, mutton, and poultry in 2022 was 92.27 million metric tons, up by 3.8% over the previous year. Of this total, the output of pork was 55.41 million metric tons, up by 4.6%; beef, 7.18 million metric tons, up by 3%; mutton, 5.25 million metric tons, up by 2%; poultry, 24.43 million metric tons, up by 2.6%. The production of milk reached 39.32 million metric tons, up by 6.8% and that of eggs stood at 34.56 million metric tons, up by 1.4%. At the end of 2022, 452.56 million pigs were in stock, up by 0.7%, and 699.95 million pig were slaughtered in 2022, up by 4.3%.

Second, industrial production experienced sustained development, and high-tech manufacturing and equipment manufacturing grew by leaps and bounds. 

The total value added of industrial enterprises above the designated size increased by 3.6% over the previous year. In terms of sectors, the value added of mining was up by 7.3%, the value of manufacturing went up by 3%, and the value of production and supply of electricity, thermal power, gas, and water increased by 5%. The value added of the high-tech manufacturing and equipment manufacturing went up by 7.4% and 5.6%, respectively, 3.8 percentage points and 2 percentage points faster than the value added of industrial enterprises above the designated size. In terms of ownership, the value added of state holding enterprises grew by 3.3%, that of the share-holding enterprises went up by 4.8%, that of the enterprises funded by foreign investors and investors from Hong Kong, Macao, and Taiwan dropped by 1%, and that of private enterprises grew by 2.9%. By products, the production of new energy vehicles, mobile communication base stations, and industrial control computer and system grew by 97.5%, 16.3%, and 15%, respectively. In December, the total value added of the industrial enterprises above the designated size grew by 1.3% year on year, up by 0.06% month on month. In the first 11 months, the total profits made by industrial enterprises above the designated size were 7,718 billion yuan, down by 3.6% year on year.

Third, the service sector sustained its recovery with modern service industries demonstrating a sound momentum of growth. 

The value added of services went up by 2.3% year on year in 2022. The value added of information transmission, software, and information technology services and that of financial services grew by 9.1% and 5.6%, respectively. In December, the Index of Services Production went down by 0.8% year on year, the decline narrowed by 1.1 percentage points compared with that of the previous month. In the first 11 months, the business revenue of service enterprises above the designated size grew by 3.9% year on year, of which the revenues of the information transmission, software, and information technology services, scientific research and technology services, and health and social services went up by 8.3%, 8.3%, and 8.1%, respectively.

Fourth, the scale of market sales was basically stable with sales of basic living goods and online retail sales growing at a fast pace. 

In 2022, the total retail sales of consumer goods reached 43,973.3 billion yuan, down by 0.2% over the previous year. Analyzing by different areas, the retail sales in urban areas reached 38,044.8 billion yuan, down by 0.3%. The retail sales in rural areas stood at 5,928.5 billion yuan, the same as that of the previous year. Grouped by consumption patterns, retail sales totaled 39,579.2 billion yuan, up by 0.5%, and the revenue of food and beverage amounted to 4,394.1 billion yuan, down by 6.3%. Spending on basic living goods increased steadily, with the retail sales of grain, oil, and food and that of beverages by enterprises above the designated size growing by 8.7% and 5.3%, respectively, over the previous year. In 2022, the national online retail sales reached 13,785.3 billion yuan, growing by 4% over 2021. Specifically, the online retail sales of physical goods totaled 11,964.2 billion yuan, up by 6.2%, accounting for 27.2% of the total retail sales of consumer goods. In December, the total retail sales of consumer goods went down by 1.8% year on year, a decline narrowed by 4.1 percentage points than that of the previous month and a month-on-month decline of 0.14%.

Fifth, investment in fixed assets increased steadily, and investment in high-tech industries maintained a good momentum of growth.

In 2022, investment in fixed assets (excluding rural households) reached 57,213.8 billion yuan, up by 5.1% over the previous year. Specifically, infrastructure investment went up by 9.4%, manufacturing investment grew by 9.1%, and investment in real estate development declined by 10%. The floor space of commercial buildings sold reached 1,358.37 million square meters, down by 24.3%. The total sales of commercial buildings was 13,330.8 billion yuan, down by 26.7%. By industries, the investment in the primary, secondary, and tertiary industries went up by 0.2%, 10.3%, and 3%, respectively. Private investment went up by 0.9%. Investment in high-tech industries grew by 18.9%, 13.8 percentage points faster than total investment growth. Specifically, investment in high-tech manufacturing and high-tech services grew by 22.2% and 12.1%, respectively. Among investments in high-tech manufacturing, those in manufacturing of medical equipment, measuring instruments and meters grew by 27.6%, and electronics and communication equipment manufacturing grew by 27.2%. In terms of high-tech services, investment in services for transformation of scientific and technological achievements and investment in research, development, and design services went up by 26.4% and 19.8%, respectively. Investment in the social sector went up by 10.9%. Specifically, investments in health and education went up by 27.3% and 5.4%, respectively. In December, investment in fixed assets (excluding rural households) grew by 0.49% month on month.

Six, import and export of goods grew fast, and the trade structure continued to receive optimization.

In 2022, the total value of import and export of goods was 42,067.8 billion yuan, an increase of 7.7% over last year. The total value of export was 23,965.4 billion yuan, up by 10.5%; the total value of import was 18,102.4 billion yuan, up by 4.3%. The country registered a trade surplus of 5,863 billion yuan. The import and export of general trade goods increased by 11.5%, accounting for 63.7% of the total value of import and export, an increase of 2.2 percentage points compared with last year. The import and export of private enterprises grew by 12.9%, accounting for 50.9% of the total value of import and export, 2.3 percentage points higher than that of last year. The import and export of mechanical and electrical products grew by 2.5%, accounting for 49.1% of the total value of import and export. In December, the total value of import and export of goods was 3,771.3 billion yuan, up by 0.6% year on year. Specifically, the total value of imports was 1,610.6 billion yuan, up by 2.2%, the total value of exports was 2,160.7 billion yuan, down by 0.5%. 

Seventh, consumer price saw mild growth, and growth of producer prices for industrial products went down.

In 2022, the consumer price index (CPI) went up by 2% over last year. Grouped by commodity categories, prices of food, tobacco, and alcohol went up by 2.4%; prices of clothing grew by 0.5%; housing prices increased by 0.7%; prices of articles and services for daily use went up by 1.2%; transportation and communication prices were up by 5.2%; prices of education, culture, and recreation grew by 1.8%; medical services and health care prices went up by 0.6%; and prices of other articles and services increased by 1.6%. In terms of food, tobacco, and alcohol prices, pork went down by 6.8%, grain up by 2.8%, fresh vegetables up by 2.8%, and fresh fruits up by 12.9%. Core CPI excluding the prices of food and energy went up by 0.9%. In December, consumer prices went up by 1.8% year on year, and maintained the same level of growth month on month. In 2022, producer prices for industrial products went up by 4.1% over last year. It went down by 0.7% year on year in December, and down by 0.5% month on month. The purchasing prices for industrial producers went up by 6.1% over last year, and in December, it went up by 0.3% year on year, and down by 0.4% month on month.

Eight, employment was generally stable, and surveyed unemployment rate in urban areas dropped slightly.

In 2022, 12.06 million people in urban areas became newly employed, exceeding the expected annual goal of 11 million. In December, the surveyed unemployment rate in urban areas was 5.5%, 0.2 percentage point lower than the previous month. The surveyed unemployment rate of people with local household registrations was 5.4%, and that of people with non-local household registration was 5.7%. The surveyed unemployment rate of people with non-local agricultural household registration stood at 5.4%. Specifically, the surveyed unemployment rate of the people aged from 16 to 24 was 16.7%, 0.4 percentage point lower than that of the previous month; that of people aged from 25 to 59 was 4.8%, 0.2 percentage point lower than that of the previous month. The urban surveyed unemployment rate in 31 major cities was 6.1%, 0.6 percentage point lower than that of the previous month. The employees of enterprises worked 47.9 hours per week on average. In 2022, the number of rural migrant workers totaled 295.62 million, 3.11 million more than that of last year, up by 1.1%. Specifically, 123.72 million of them were local migrant workers working in the vicinity of their place of home, up by 2.4%; while 171.9 million worked at more distant places in their home province or in regions far away, up by 0.1%. The average monthly income of migrant workers was 4,615 yuan, up by 4.1% over last year.

Ninth, resident income grew generally at the same pace as economic growth, and income of rural residents grew faster than that of urban residents.

In 2022, the nationwide per capita disposable income of residents was 36,883 yuan, a nominal increase of 5% over that of last year, and a real increase of 2.9% after deducting price factors, which was generally at the same pace with the growth of the economy. In terms of permanent residents, the per capita disposable income of urban households was 49,283 yuan, a nominal growth of 3.9% and a real growth of 1.9% after deducting price factors. The per capita disposable income of rural households was 20,133 yuan, a nominal growth of 6.3% and a real growth of 4.2% after deducting price factors. The median of the nationwide per capita disposable income was 31,370 yuan, a nominal increase of 4.7% over that of last year. Taking the per capita disposable income of nationwide households by income quintile, that of the low-income group reached 8,601 yuan, the lower-middle income group 19,303 yuan, the middle income group 30,598 yuan, the upper-middle income group 47,397 yuan, and the high income group 90,116 yuan. In 2022, the nationwide per capita consumption expenditure was 24,538 yuan, a nominal growth of 1.8%, or a real decline of 0.2% after deducting price factors.

Tenth, total population declined and urbanization rate continued to grow.

By the end of 2022, the national population was 1,411.75 million (including the population of 31 provinces, autonomous regions, and municipalities, as well as military service personnel, but excluding residents of Hong Kong, Macao, and Taiwan and foreign nationals residing in the 31 provinces, autonomous regions, and municipalities), a decrease of 0.85 million over that at the end of 2021. In 2022, the number of births was 9.56 million with a birth rate of 6.77‰; the number of deaths was 10.41 million with a mortality rate of 7.37‰; the natural population growth rate was minus 0.6‰. In terms of gender, the male population was 722.06 million, and the female population was 689.69 million; the sex ratio of the total population was 104.69 males to 100 females. In terms of age structure, the population in the working age group from 16 to 59 was 875.56 million, accounting for 62% of the total population; the population aged 60 and over was 280.04 million, accounting for 19.8% of the total; the population aged 65 and over was 209.78 million, accounting for 14.9% of the total. In terms of urban-rural structure, permanent residents in urban areas totaled 920.71 million, an increase of 6.46 million over the end of the previous year; and permanent residents in rural areas amounted to 491.04 million, a decrease of 7.31 million. The share of urban population in the total population (urbanization rate) was 65.22%, 0.5 percentage point higher than that at the end of the previous year.

Generally speaking, positive results have been achieved in effectively coordinating COVID-19 prevention and control and economic and social development in 2022, with stabilized macroeconomic performance, continuously expanded economic output, and steadily improved development quality. However, the foundation of domestic economic recovery is not solid as the international situation is still complicated and severe, while the domestic triple pressure of demand contraction, supply shock, and weakening expectations is still looming. In the next stage, 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 National Congress of the Communist Party of China as well as the decisions and arrangements made by the Central Economic Work Conference, make economic stability our top priority, and pursue progress while ensuring stability. We will better coordinate epidemic prevention and control with economic and social development, ensure better coordination in pursuing development and upholding security, deepen reform and opening-up in all respects, boost market confidence and stabilize growth, employment, and prices, so as to promote overall improvement of economic performance, and achieve effective enhancement of quality and reasonable growth of quantity.

That's all for my introduction. Thank you.

Shou Xiaoli:

Thank you for your introduction, Mr. Kang. Now we will open the floor for questions. Please identify the media outlet you represent before raising a question.

CCTV:

China's economy was affected by multiple factors beyond expectations in 2022, including the international situation, domestic COVID-19 outbreaks, high temperatures and drought. What's your view on the performance of China's economy in 2022? Moreover, China's GDP surpassed 120 trillion yuan in 2022, so what does that mean for the Chinese economy? Thank you.

Kang Yi:

Thank you for your questions. It is indeed very important to review the past year. In 2022, we faced profound changes and a pandemic, both unseen in a century, the geopolitical situation was volatile and unstable, and downward risks in the global economy increased. Meanwhile, the domestic economy was affected by multiple factors beyond expectations, including sporadic resurgences of COVID-19 and extremely high temperatures. Moreover, the triple pressure of demand contraction, supply shocks and weakening expectations continued to evolve. Furthermore, the environment for development became more complicated, challenging and uncertain. Confronted with a complex and volatile international environment and formidable tasks in promoting reform, development, and stability at home, the CPC Central Committee with Comrade Xi Jinping at its core united and led the whole Party and Chinese people of all ethnic groups in rising to these challenges head-on and dealing with them calmly, considering both domestic and international dynamics, coordinating the COVID-19 response with socioeconomic development, ensuring both development and security, and stepping up macro regulation, and as the result, the impact of factors beyond expectation has been handled effectively, the overall performance of the macroeconomy has been stabilized, new achievements have been made in high-quality development, people's basic living needs have been ensured through more effective efforts, and overall economic and social stability has been maintained. Overall, the economy's performance in 2022 can be generalized in the following aspects.

First, China's composite national strength has been further strengthened. In 2022, China's GDP exceeded 120 trillion yuan, standing at 121 trillion yuan. After consecutively surpassing 100 trillion yuan in 2020 and 110 trillion yuan in 2021, China's GDP in 2022 reached a record high of 120 trillion yuan, or $18 trillion in U.S. dollar terms, according to the annual average exchange rate. China maintained its position as the world's second-largest economy. China's per capita GDP in 2022 reached 85,698 yuan, up 3% in real terms, amounting to $12,741, according to the annual average exchange rate. China's per capita GDP has exceeded $12,000 for two years in a row. The constant increase in China's GDP in both aggregate and per capita terms means a further enhancement in China's composite national strength, social productivity, international influence and people's living standards, which means a more solid foundation, higher quality, and greater momentum for development. Moreover, it demonstrates the Chinese economy's strong resilience, vast potential and ample space, and the fact that the fundamentals sustaining China's sound economic growth, in the long run, remain unchanged. Surely, it also means that we should continue to work with greater effort. The country's long-range goal for 2035 is to increase per capita GDP to the level of moderately developed countries. At present, the per capita GDP is only $12,700. The GDP needs to more than double to reach this medium-term goal. Therefore, 120 trillion yuan of GDP is only a small step on our way forward.

Second, the economy has remained generally stable. Economic growth was faster than most major economies. Early in the second quarter, affected by some factors beyond expectations, China faced an economic downturn. The CPC Central Committee and the State Council promptly adopted a package of policies to stabilize the economy, making great efforts to support the economy to withstand pressures and to firm up. Just now, I have reported to you that last year China's GDP grew by 3%, which is a fast growth rate compared with major economies in the world. For instance, Germany has announced its projected annual economic growth rate of 1.9%. According to the IMF, the economic growth rate of the U.S. and Japan in 2022 will not exceed 2%. China's GDP growth of 3% is relatively rapid, considering China has suffered shocks of many factors beyond expectation. In addition, overall stability was maintained in employment. A total of 12.06 million new urban jobs were created over the year, surpassing the projected target of 11 million new jobs. At the end of December, the surveyed urban unemployment rate stood at 5.5%, down 0.2 percentage points from the previous month. The consumer price index registered a moderate rise of 2% over the year. As global food and energy prices rose drastically and imported inflationary pressures increased, the stable prices in China contrasted sharply with the high inflation in major economies such as the U.S. and European countries. The balance of payments has been improved. The total volume of trade surplus in goods rose by 35.4% over the previous year; China's foreign exchange reserves reached $3.1277 trillion at the end of year, ranking first in the world.

Third, a solid foundation has been laid for industrial development. The agricultural sector has seen an increase in output and successful harvests. Moreover, a bumper food harvest has been secured for the 19th year in a row. The grain output totaled 686.55 million metric tons and has been kept above 650 million metric tons for eight consecutive years, putting us in a stronger position to ensure the food supply of the Chinese people. Meantime, industry has fully played its role as a ballast stone. The total industrial value added reached 40.2 trillion yuan and the value added by the manufacturing sector stood at 33.5 trillion yuan, leading the world. Industry's contribution to economic growth reached 36%. Infrastructure has been increasingly improved. As of the end of 2022, China's rail network in operation has grown to 155,000 kilometers, including 42,000 km of high-speed railways, leading the world. The world's largest internet infrastructure with world-leading technologies has been built and the industrial internet has been widely integrated into 45 categories of the national economy.

Fourth, domestic demand continued to expand. Despite the shocks of several rounds of COVID-19 resurgences, the total annual retail sales of consumer goods were stable at around 44 trillion yuan, with online retail sales reaching 12 trillion yuan. China is still the second-largest consumer market and largest online retail sales market in the world, with distinctive advantages in its huge market. The total investment in fixed assets exceeded 57 trillion yuan, up 5.1% over the previous year, 0.2 percentage points higher than that of 2021, providing strong support for sustained economic growth.

Fifth, reform and innovation have been deepened. Reforms to streamline administration and delegate power, improve regulation, and upgrade services have been advanced. The business environment has been improved. Moreover, steady progress has been made in the comprehensive pilot reform for the market-based allocation of production factors. In addition, the development of the high-standard market system has been accelerated. All these have contributed to creating a more favorable condition for the development of market entities. By the end of 2022, the number of market entities registered nationwide reached 169 million, including 114 million self-employed businesses. The innovation-driven development strategy has been further implemented and new development momentums have been playing an increasingly prominent role in driving growth. In 2022, the total value added of the high-tech manufacturing enterprises above designated size grew by 7.4% over the previous year, 3.8 percentage points higher than that of the industrial enterprises above designated size as a whole. Meanwhile, online retail sales of physical goods accounted for 27.2% of total retail sales of consumer goods, with a year-on-year increase of 2.7 percentage points.

Sixth, solid steps have been taken to advance high-standard opening up. Confronted with increasing downward pressure on the world economy and a slowdown in global trade growth, we have advanced high-standard opening up at a faster pace and supported enterprises to maintain production, receive orders and expand the market, achieving rapid growth in foreign trade and foreign investment. The total value of trade in goods reached a record high. In 2022, the total value of trade in goods exceeded 40 trillion yuan, reaching 42.1 trillion yuan, up 7.7% over the previous year. Trade in services grew rapidly. From January to November, the total volume of service trade stood at 5.4 trillion yuan, up 15.6% year on year. Inbound foreign investment grew in a trend-bucking manner. Bright economic development prospects and an increasingly optimized business environment made China a fertile ground for global investment and entrepreneurial pursuits. From January to November, China's utilized foreign investment amounted to 1.1561 trillion yuan, with a year-on-year increase of 9.9% calculated on a comparable basis, surpassing the whole year's total value of utilized foreign investment in 2021, hitting a record high.  

Seventh, strong and effective measures have been taken to ensure people's livelihoods. We have remained committed to ensuring and improving people's livelihoods through development, using every possible means to boost personal incomes, consistently increasing investment in improving people's living standards, and taking practical measures to meet people's basic living needs. Personal incomes have grown steadily. In 2022, per capita disposable income of residents increased by 2.9% in real terms, which stayed basically in step with economic growth. The government provided stronger support to ensure personal incomes, with a year-on-year nominal increase of 5.5% in per capita net transfer income, higher than the growth rate of total personal incomes. Investment in improving people's livelihoods was increased and social sector investment in 2022 went up by 10.9% year on year, among which investment in health and social work was up by 26.1%, an increase of 6.6 percentage points over the previous year.

People can't know how difficult things can be until they have experienced them. Under the complicated circumstances of profound changes and a pandemic both unseen in a century and faced with shock caused by many unexpected factors, it is only by overcoming enormous difficulties that China has been able to make such achievements. We owe our achievements last year to the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the sound guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and the concerted efforts of the Party and Chinese people of all ethnic groups. These achievements speak volumes about the marked advantages of the system of socialism with Chinese characteristics and the strong resilience and vitality of the Chinese economy.

While fully recognizing our achievements, we also need to acknowledge that the international situation is undergoing complex changes, the global growth momentum is weakening, global trade faces grim challenges, and the world economy may suffer from stagflation. Domestically, the foundation for economic recovery is still not solid and enterprises still face many difficulties in their production and operations. Our capacity for scientific and technological innovation still needs to be further developed. Moreover, people still face many difficulties in seeking jobs. More intensive efforts are required to promote overall improvement in the economy. 

Thank you.

Kyodo News:

What's your forecast for economic goals and prospects in 2023? China has put an end to the dynamic zero-COVID approach, opened up its economy, and started to resume work and production. What progress has been made?

Kang Yi:

Thank you for your questions. This year will kick off our efforts to put all the guiding principles from the 20th CPC National Congress into action and it is also a crucial year for continuing to implement the 14th Five-Year Plan. The external environment is complicated and challenging, the global economy faces rising risks of stagflation and the foundation for economic recovery in China still needs to be consolidated. However, the Chinese economy's strong resilience, ample potential and strong vitality and the fundamentals sustaining China's sound economic growth, in the long run, remain unchanged. Moreover, the country's resources and production factors can provide enough support. With China's COVID-19 response moving into a new phase and policies continuing to be implemented fully and meticulously, work and life are expected to return to normal at a faster pace and the internal drivers of China's economy will gather greater momentum. In 2023, China's economy will see overall improvement. According to our analysis of the economy in 2023, there are some advantageous conditions, which are as follows:

First, China has a solid material foundation that has been built up over the years. China possesses all the industrial categories listed by the U.N. and features the best industrial supporting conditions. It has a strong capacity for industrial organization and resilient industrial chains. Therefore, China plays a crucial role in the global industrial division system and the global supply chain system. Infrastructure in China is well developed. In response to the fluctuations in the global supply system, we have enhanced our capacity to ensure security in key areas, including food, energy, and industrial and supply chains, creating favorable conditions for dealing with external risks and challenges.

Second, China enjoys the distinctive advantages of a super-sized domestic market. There are more than 1.4 billion people in China. New industrialization and urbanization continue to advance. China has a super-sized domestic market with the greatest potential in the world, serving as a powerful engine for promoting economic recovery.

Third, new growth drivers have played a stronger role in supporting the economy. We have further implemented the innovation-driven development strategy, worked hard to reinforce China's strategic science and technology capabilities, and taken effective measures to advance the rapid development of new industries. All these will provide new driving forces for economic growth. 

Fourth, the dividends of efforts to deepen reform and opening-up continue to be unleashed. We uphold and further improve the basic socialist economic system and work unswervingly to both consolidate and develop the public sector and to encourage, support and guide the development of the non-public sector. We have strived to accelerate the development of a unified domestic market, deepened reforms to streamline administration, delegate power, improve regulation and strengthen services, and fostered an internationalized and law-based business environment, and created a more level playing field for various market entities.

Fifth, China has rich experience in macro regulation. In particular, current prices are generally stable and under control, leaving ample space for us to reserve and utilize policy tools for macro regulation in many ways.

In 2023, China's economy will certainly see an overall improvement. I believe you have seen the current situation of epidemic response and resumption of work and production. Taking Beijing as an example, traffic congestion has returned. And the number of domestic flights surpassed 80% of the level in 2019. People have returned to normal life. All these factors will create better conditions for economic growth in 2023.

Thank you.

Reuters:

According to the statistics, in 2022, the total retail sales of consumer goods dropped by 0.2% over the previous year. In December, it went down 1.8% year on year. For this year, what effective measures will be taken to boost consumption, especially consumer spending? Moreover, what were the respective contributions of the three key demands for economic growth? Thank you.

Kang Yi:

Thank you for your questions. Consumption is a topic concerning everyone. Expanding domestic demand remains one of our top priorities this year.

Last year, the entire consumer market was hit hard by the epidemic. Especially due to the restrictions on cluster and in-person consumption, the overall consumer market was greatly impacted. In addition, people have become less willing to consume. The problems of being afraid and inconvenient to consume have become prominent. Total retail sales of consumer goods decreased by 0.2% last year, and the consumer market was significantly affected by the short-term disruption of the epidemic. Under such circumstances, we immediately launched a set of policies to boost consumption and basically stabilized the domestic consumption market with some new changes emerging. For example, overall sales margin improved in December. Total retail sales of consumer goods dropped by 1.8% in December. Compared to the decrease of 5.9% in November, as we reported, it narrowed by 4.1 percentage points. Some new types of consumption have developed rapidly. Online retail sales have made up an increasing share. Specifically, online retail sales of physical goods accounted for 27.2% of the total retail sales of consumer goods in 2022, 2.7 percentage points higher than the previous year. People tend to have an increased demand for higher-quality goods or services. All of the above are the characteristics of our country's consumption over the past year. 

We have full confidence in China's consumer market in 2023. As China's epidemic response enters a new phase, production and life have gradually returned to normal, and consumer spending on brick-and-mortar businesses will gradually pick up. The consumer market is expected to recover in a steady manner. Here are some favorable conditions.

First, there is huge spending potential among Chinese consumers. There is a huge consumer demand with a population of more than 1.4 billion. At the same time, the general trend of the consumption structure upgrading has remained unchanged. Second, offline and service spending is gradually returning to normal. As production and life accelerate the pace of recovery, restrictions on consumption scenarios will be greatly reduced, creating favorable conditions for the recovery of service consumption and in-person consumption. Third, new consumer hotspots are emerging. New consumption models such as "internet plus" and "digital plus" have developed rapidly. Consumers tend to spend more on a green lifestyle, fitness, health care, and cultural products and services. Fourth, a stable job market and rising household income will also promote consumer spending. I mentioned that China's overall economy would definitely improve in 2023 when we looked at the outlook of China's economy in the next year. Economic recovery will improve employment and people's income and greatly boost consumers' capacity and willingness to spend.

At the end of last year, the National Development and Reform Commission issued a mid- and long-term plan to boost spending and domestic demand and made a series of arrangements for expanding the domestic market, promoting consumption, expanding employment, raising income, improving income distribution, perfecting income distribution pattern, facilitating consumption, and combining expanding domestic demand with deepening supply-side structural reforms. The implementation of these policies will continuously enhance people's spending power and promote the recovery, improvement, and scale of the consumer market in a steady manner.  

Regarding the contributions made by the three key demands for economic growth, final consumption expenditure, capital formation, and net exports of goods and services drove economic growth by 1 percentage point, 1.5 percentage points, and 0.5 percentage points, respectively; and they were responsible for 32.8%, 50.1%, and 17.1% of economic growth, respectively.

Thank you.

21st Century Business Herald:

I would like to ask, how do you view China's performance in achieving its 2022 employment goals? With the number of college graduates expected to hit a new record high in 2023, how will you better achieve the goal of stable employment? Thank you.

Kang Yi:

Employment has always been a topic concerning everyone. In 2022, due to the resurgence of the pandemic, small and medium-sized enterprises have been faced with increasing operating difficulties. It has also become difficult for key groups to find jobs, especially among the youth, where there are rising unemployment rates, which has brought challenges to realizing stable employment. Employment matters most in people's lives. The CPC Central Committee and the State Council have attached great importance to this issue and introduced a series of effective measures to stabilize employment. All localities and government departments have adhered to the principle of giving priority to employment, intensified the effect generated by the policy of stabilizing and expanding employment, taken measures to ensure employment for key groups, made every effort to stabilize employment, and safeguarded the bottom line of preventing large-scale unemployment. It has demonstrated the following characteristics.

First, the employment situation is generally stable. China created 12.06 million new urban jobs, exceeding its target of 11 million set at the start of the year. Due to the spread of the pandemic, the surveyed urban unemployment rate rose temporarily in particular months, reaching 6.1% at its peak. However, for the year overall, the unemployment rate remained basically stable. Notably, the employment situation has improved recently as the package of policies to stabilize the economy, and subsequent policies, have taken effect. The surveyed urban unemployment rate was 5.5% in December, dropping by 0.2 percentage points from November.

Second, effective measures have been taken to ensure the employment of key groups. A series of policies targeted toward helping enterprises create jobs and keep their employees have been adopted, which are helpful in facilitating college graduates and migrant workers to find jobs. In December, the surveyed urban jobless rate for the people holding junior college degrees or above between the ages of 20 and 24 was 21.1%, falling by 0.2 percentage points from November, the fifth consecutive month that the rate has decreased. The drop in urban joblessness for those between the ages of 16 and 24 was even more significant. Meanwhile, the surveyed unemployment rate for rural migrant workers was 5.4%, a drop of 0.6 percentage points from the previous month. The number of migrant workers reached 295.62 million in 2022, an increase of 3.11 million from 2021, surpassing 2019's pre-COVID levels. Moreover, over 32 million laborers who have been lifted out of poverty found employment, and rural and urban people facing difficulties also found jobs.

Generally speaking, the overall employment situation remained stable in 2022. The surveyed urban jobless rate increased slightly compared with 2021 levels, which was due to multiple unexpected factors at home and abroad. Going forward, the pressure on the job market remains, with more than 11.5 million college students expected to graduate this year and ongoing prominent structural problems. However, the overall employment situation is expected to improve in 2023 as the economy recovers, which will lead to expanded demand for employment and more jobs becoming available. First, thanks to optimized COVID-19 containment measures, people's lives are getting back to normal, and enterprises will gradually resume work and production, promoting employment demand. Second, service sectors, ranging from accommodation and catering to tourism, will recover as public transport, logistics, and travel rebound. Service sectors have a large capacity for employment, so more job opportunities will be created in the rebound and development of these sectors. Third, governments and departments at all levels will continue to enhance pro-employment policies, implementing measures to ease the burden of enterprises, keep their employees, and create more jobs. Such stepped-up efforts will provide employment support for key groups, including college graduates, and ensure employment stability. Fourth, the rapid growth of the new drivers will continue to create more new jobs, which will serve as an important driver to expand employment and ensure high-quality employment. Thank you. 

Swiss Radio:

Looking back to consumption, will there be further measures taken to enhance consumption to turn it around?

Kang Yi: 

Consumption has become a concern for everyone. I have talked about this just now, so I'd like to invite Mr. Fu to give you more information. 

Fu Linghui:

Consumption has been of great concern for everyone. Given the complicated and grim situation, governments and departments at all levels adopted a series of policies to promote consumption last year. In 2023, China released medium- and long-term policies to further expand domestic demand. Then, governments and departments at all levels are expected to play a bigger role in spurring consumption in a bid to expand domestic demand and promote economic recovery. As the pandemic containment has entered a new phase, the entire environment is more favorable for consumption, and people with increased spending power are more willing to spend. Recovery of consumption is expected to see good momentum this year, which will help China's economy to deliver a better performance. Thank you. 

Yicai:

What do you think of fixed asset investment in 2022? The growth rate of investment has been declining despite the country's policies and measures to ensure growth and investment stability. What's behind this decline? What do you think of these investments going forward? Thank you. 

Kang Yi:

Thank you. Fixed asset investment played an important role in stabilizing the economy in 2022, with capital formation accounting for 50.1% of the country's GDP growth. In 2022, fixed asset investment witnessed steady growth, up 0.2 percentage points from the previous year. All regions and all government departments made great efforts to ensure the construction of the key projects. Stepped-up endeavors have been made to shore up weak links and accelerate the issuance and use of local government special bonds. Policy-based and developmental financial instruments have been made good use of. In this way, fixed asset investment has maintained stable growth, with its structure being improved. Investment has played a key role in keeping growth stable and promoting structural adjustment.  

Investment continued to expand, reaching 57.2 trillion yuan. Investment in the manufacturing sector grew rapidly, with a year-on-year growth of 9.1% in 2022, 4 percentage points faster than that of the national investment. The investment in manufacturing technology transformation increased by 8.4%, accounting for 40.6% of the total investment in the manufacturing sector, with its share surpassing more than 40%. Investment in infrastructure continued to accelerate, with investment in infrastructure growing by 9.4% year on year. The share of investment increase in water conservancy management was 13.6%, public facilities management was 10.1%, and information transmission was 9.3%. Investment in high-tech industries also witnessed rapid growth, up 18.9% from the previous year. Such growth is 13.8 percentage points faster than that of the national investment. The growth rate for high-tech manufacturing was 22.2%, and the rate for high-tech services was 12.1%. Moreover, investment in areas that are important to people's lives witnessed rapid increases, up 10.9% year on year, with the investment in health and social work increasing by 26.1%.

Generally, fixed investment remains stable but has new features. Driven by the demand side in the short term but by the supply side in the medium and long term, fixed investment requires the synergy of both supply and demand. This year, fixed investment is expected to continue to expand, considering the following aspects.

First, the investment potential of building a modern socialist country in all respects is huge. As the largest developing country in the world, China still faces a huge gap with developed countries in development levels on a per capita basis. China's per capita GDP is less than one-fifth of that of the U.S. and one-third of that of Japan. China's per capita infrastructure capital stock is only 20% to 30% of that of developed countries, and the space for development is huge.

Second, making up for disadvantages and strengthening weaknesses provides broad investment space. The problem of China's imbalanced and inadequate development is still prominent. The development gaps between urban and rural areas and between regions are relatively big and some rural areas in central and western China are lacking in infrastructure. Shoring up weak links implies broad investment space. Imbalances also exist in urban areas, and many weak points need to be strengthened. 

Third, the momentum of investment in innovative development is strong. In recent years, the high-tech manufacturing industry, represented by electronic medicine and the high-tech service industry, represented by e-commerce, have maintained sound growth. These industries still have great potential in the future. 

Fourth, infrastructure investment has been strengthened. The transformation and upgrading of traditional technological facilities, including transportation, energy, and water conservancy and the accelerated construction of new infrastructure such as 5G, extra-high voltage, intercity freeways and big data centers will drive effective investment. In terms of leading indicators, the total planned investment of projects starting construction in 2022 grew 20.2% year on year, with a growth rate of over 20% for four straight months. In December, the number of newly registered fixed assets investment projects was 38,000, up 7.5% from November. Considering these indicators, investment in 2023 has a solid foundation.

Generally speaking, China's investment has development potential, space and momentum, and is expected to sustain growth. Thank you. 

Financial Times:

Can you provide information on China's death rate in December 2022 and how it compares with December 2021? Thank you. 

Kang Yi:

Thank you for your question about population, which is of great concern to many. I will introduce it from the perspective of demographic statistics. China conducts a population census every 10 years, or at the end of each decade. The latest census, also the seventh, was conducted in 2020. In non-census years, demographic statistics use survey sampling methods. At midnight on Nov. 1 each year, survey sampling is conducted in order to identify demographic changes. Therefore, the total population, births and deaths for the whole year are calculated. Thank you.

CNBC: 

Last year saw a decline in real estate and exports. In terms of statistics, is there any new growth driving force for sustainable economic development to offset the factors leading to the decline? Thank you. 

Kang Yi:

Thank you for your question about real estate and exports. First, I will brief you on the real estate situation in 2022. With a long industrial chain and affecting many aspects, the real estate industry greatly influences the national economy. According to our calculations, real estate and its relevant industries account for 13% or 14% of total GDP. In 2022, the value added of the real estate industry decreased by 5.1%, affecting many indexes. Due to the impact of the real estate industry, the 5.1% growth rate of fixed investment is not very fast. The 10% reduction in real estate investing led to a decline of 2.5 percentage points in fixed assets investment. Affected by the real estate sector, private investment increased by 0.9%. Private investment accounts for about 80% of real estate investment. Therefore, the decline of 10% in the latter has a big downward influence on the former. Manufacturing investment in private investment grew by double digits. Private investment has a large proportion of real estate investment, which has had a great downward impact on the former. Fluctuations in the real estate market are normal. 

According to the latest situation, the country released a series of relevant policies to construct a new real estate system, as we have noticed. In December, the decline in all indexes in the real estate industry slowed down, with new factors coming into being. The decline in real estate investment in December was 7.7 percentage points smaller than that of November. Declines in the sold floor space of commercial buildings, sales volume, capital in place, and the floor space of houses beginning construction narrowed to different degrees. Therefore, we initially estimated that the impact of the real estate industry on the economy in 2023 would not be greater than that in 2022. Real estate remains a pillar industry, and conditions are favorable for the steady recovery of the real estate market. With urbanization still in development, China saw an increase of half a percentage point in its urbanization rate to 65.22% last year, still lower than 80% of developed countries. The newly added urban population was huge last year, which implies future development space. Policy adjustment in supply and demand aims to emphasize that housing is for living in, not for speculation, and reduce the financial function of real estate. Besides, guarantee and supply are provided in multiple channels from various parties, which will help establish a new healthy real estate market. 

Policies concerning the demand side to support justified and improved housing needs will effectively support the real estate industry. The demand for improved living conditions is substantial. As the pillar industry for developing and developed countries, the real estate industry has a tremendous influence on the economy. Thank you. 

Economic Daily:

China will conduct its fifth national economic census in 2023. How is the work going? What improvements will be made to the upcoming national economic census compared with the previous one? Thank you.

Kang Yi: 

Thank you for your questions and for allowing us to share more information about the fifth national economic census with the public. First, I will introduce the progress we have made in conducting the upcoming national economic census. The State Council issued a notice on carrying out the fifth national economic census on Nov. 17 last year to jump-start the work. The fifth national economic census is a major survey of national conditions and national strength carried out in the critical period of the beginning of building a modern socialist country in all aspects after the success of the 20th CPC National Congress. It's fair to say that this is also the first major survey on national conditions and national strength in the journey towards building a modern socialist country in all aspects, following the achievement of building a moderately prosperous society in all aspects. The NBS has thoroughly implemented major decisions and arrangements on statistical work deployed by the CPC Central Committee and the State Council, regarding the fifth national economic census as a major statistical task, and making solid progress in the planning and coordination of the census.

First, we have carefully planned the general idea of the census and coordinately arranged the input-output survey. The NBS regards carrying out the economic census and input-output surveys in a coordinated manner as a major statistical task, as part of the Plan for Modernizing Statistical System during the 14th Five-year Plan period. In the second half of 2021, we launched special pilot projects in six regions, including Shanxi province, to evaluate the feasibility and necessity of coordinating the two surveys. We have concentrated on the service of the new development stage, promoted high-quality development, closely focused on the task of modernizing statistical system, and formulated the general idea of the fifth national economic census on the basis of extensively soliciting opinions from all sectors and in-depth discussions.

Second, we have completed special pilot projects and made solid progress in making plans for the census. From June to September 2022, the NBS carried out special pilot projects in 14 provinces, autonomous regions, and municipalities, including Beijing, Tianjin, and Hebei, focusing on solving key and tricky problems and testing new content, methods and technologies for the census. Based on the results of the special pilot projects, we have formed the draft of the plan for the fifth national economic census. Currently, we are widely soliciting opinions about the draft plan from within statistical systems and relevant departments. 

Third, we have strengthened coordination among departments to promote the implementation of arrangements for the census. As a massive social system project, the economic census requires the close cooperation of all sectors of the whole society. Now, all regions across the country have started implementing census work in their localities.

Your second question is about the differences between the fifth national economic census and the previous one. First, the upcoming census marks our first time conducting input-output surveys in a coordinated manner. As an objective requirement to promote high-quality development, census and survey work is an important measure in advancing the modernization of statistical system and the national economic accounting reform, as well as in consolidating the quality of statistical survey data. It is not only convenient to coordinate survey tasks, integrate survey contents, optimize survey items, and reduce the burden of grassroots work, but also conducive to a more comprehensive and systematic collection of grassroots data, the coordination of statistical survey data, and better verification of relevant data, ultimately achieving a better connection between economic aggregate and structural data.

Second, we will further innovate the means and methods used for conducting the census and survey. This national economic census will widely use administrative records of departments to promote the application of electronic licenses and certificates during the process. We will also adopt new ways to carry out the census, combining online filling with handheld electronic terminals and on-site data collection. We will also encourage census respondents to submit census data via the internet.

Third, we will launch inspections on the census in due time. We will firmly hold the lifeline of census data quality, strictly implement the census plan, standardize the work process of the census, strengthen the inspection and verification of data quality throughout the whole process, and effectively prevent and punish behaviors of statistical fraud and fake statistics. We will include the census situation in the content of statistical inspections at an appropriate time.

For the next year, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, the NBS will steadily advance the establishment of census institutions, the construction of comprehensive pilot projects, the inventory work of various units, and the preparation work for census registration, to lay the foundation for the smooth implementation of the fifth national economic census and successfully complete the tasks of this year's census. The census will be a "comprehensive physical examination" of the national economy. With this, I would like to call for more support, understanding, participation and cooperation from every respondent engaged in this census. We also hope that our media friends will actively promote, support and supervise the census work.

Shou Xiaoli:

Due to time limitations, we can only answer two more questions.

Bloomberg News: 

My first question is about the unemployment rate. The unemployment rate usually rises in December, based on the last five or seven years. But this year, it fell. How do you explain that change in the historical pattern of unemployment, especially considering that in December, most of China seemed to have COVID-19 and economic activity was very, very limited? My second question is related to the question from the Financial Times. Will you be releasing monthly death data in the coming months, considering how much interest there is in how many people have died and how fast that is increasing? Thank you.

Kang Yi:

Thank you for your questions. Everyone pays close attention to the issue of employment and unemployment, and you have also been very careful to analyze China's urban survey unemployment rate data released every December for many consecutive years. In December 2022, the unemployment rate in China's urban survey fell by 0.2%, mainly due to the decline in the labor participation rate. In December, the labor participation rate fell by 1.1 percentage points, because migrant workers returned home. Moreover, some were recuperating at home after COVID-19 infections, and their willingness to participate in work was low, which was the main reason for the decline in the labor participation rate.

As for the second question, on Jan. 14, the State Council's Joint Prevention and Control Mechanism held a press conference on the current situation. Since the outbreak of the pandemic, China has shared its data on the pandemic, including information on infections and other aspects, with the world, its people and relevant institutions at the earliest opportunity. Since the pandemic prevention and control entered a new stage, relevant data will be released according to the relevant provisions of the Law on the Prevention and Treatment of Infectious Diseases and according to the rules that manage Class B infectious disease, as COVID-19 management was downgraded from Class A to Class B.

Thank you.

Tianmu News:

As you mentioned just now, in the context of high global inflation, we can see that the current price data in China is still relatively stable and moderate. What is the reason for this? What is your anticipation for the price trend in 2023? Thank you.

Kang Yi:

The stable operation of prices is not only conducive to the stable performance of the economy, but also conducive to ensuring people's livelihoods. China's prices remained generally stable last year, with the annual CPI rising by 2%, lower than the expected target of 3%. There were many reasons for this.

First, China did not issue excess currency, and prices still reflect the relationship between supply and demand. Let's compare China's situation with that of other countries and regions. The US has continuously raised interest rates to curb inflation, and its CPI rose 6.5% in December. Europe's CPI rose at the sharp level, still more than 10%. Japan's CPI has also been rising recently. During the past three years of pandemic prevention and control, China has not flooded its economy with liquidity. This is the first reason.

Second, the effects of ensuring supply and stabilizing prices have become apparent. Geopolitical conflicts and rising energy prices are significant factors that contribute to imported inflation. We first ensured the energy supply, such as the coal supply, which reached a total output of 4.5 billion tonnes in 2022. The stable supply of coal ensured the power supply. Also, the grain price. China's grain output has been stable at more than 1.3 trillion jin (650 million tonnes) every year for eight consecutive years, achieving "19 consecutive-year harvests." A rise in food prices would drive up the prices of many commodities. According to the requirements of General Secretary Xi Jinping, we must secure our own food supply for the Chinese people. With a population of more than 1.4 billion, if our food supply were insufficient, we would have to purchase grains on the international market, which would drive international food prices even higher. We have provided a solid foundation to stabilize the supply and prices of grains, energy and other major commodities.

Third, the supply of industrial goods and services is sufficient. As I said just now, it reflects the relationship between supply and demand. China's complete industrial system and adequate supply of goods and services contribute to the stability of consumer prices.

In 2023, there is no basis for a sharp rise in prices. We are confident that the CPI trend will remain stable in the new year. Thank you.

Shou Xiaoli:

Today was Mr. Kang's first time attending our press conference at the State Council Information Office. Thank you to all the speakers and thank you to all the reporters for your participation. That's all for today's press conference.

Translated and edited by Yang Xi, Liu Jianing, Xu Kailin, Liu Sitong, Wang Qian, Zhang Rui, Wang Yanfang, Qin Qi, Li Huiru, Gong Yingchun, Zhou Jing, Huang Shan, Daniel Xu, 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. Xuan Changneng, 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

Mr. Ma Jianyang, an official of the Financial Market Department of the PBC

Chairperson:

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

Date:

Jan. 13, 2023

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to the second press conference held by the State Council Information Office (SCIO) this afternoon. We have invited Mr. Xuan Changneng, deputy governor of the People's Bank of China (PBC), to brief you on China's financial statistics in 2022 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; Mr. Zou Lan, director general of the Monetary Policy Department of the PBC; and Mr. Ma Jianyang, an official of the Financial Market Department of the PBC.

Now, I will give the floor to Mr. Xuan Changneng.

Xuan Changneng:

Friends from the media, good afternoon. In 2022, faced with unexpected factors at home and abroad, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, the PBC firmly acted on the decisions and deployments of the CPC Central Committee and the State Council and the requirements of the Financial Stability and Development Committee under the State Council, stepped up the implementation of prudent monetary policies, adopted the policy package and follow-up policies for keeping the economy stable, took solid measures to serve the real economy, and made resolute contributions to maintaining a stable macroeconomic performance. On Jan. 10, the PBC released the Financial Statistics Report (2022). The data shows that China's financial system operated smoothly in 2022, and the financial sector provided stronger and higher-quality support for the real economy.

First, liquidity in the banking system maintained reasonably ample, and the growth in total credit became more stable. In 2022, the PBC lowered the required reserve ratio (RRR) twice, providing the real economy with more than 1 trillion yuan in long-term liquidity; turned in surplus profits of over 1.13 trillion yuan; and used various methods such as re-lending and rediscounting, medium-term lending facilities, and open market operations to release liquidity, thus creating a favorable liquidity environment for keeping the macroeconomic performance stable. Broad money supply (M2) increased by 11.8% year on year, 2.8 percentage points higher than that at the end of the previous year. RMB loans grew by 21.31 trillion yuan, surpassing the amount recorded in 2021 by 1.36 trillion yuan. Aggregate financing in the economy increased by 9.6% – 32.01 trillion yuan – year on year, which was 668.9 billion yuan more than that in the previous year.

Second, credit support for key fields and weak links of the real economy was strengthened. The credit structure was continuously improved. In 2022, the PBC introduced a range of targeted structural monetary policy tools for groups in difficulty and key fields, helping to keep the macroeconomic performance stable. The outstanding balance of loans to the manufacturing industry increased by 36.7% year on year, 25.6 percentage points higher than the growth rate of loans overall. The outstanding balance of loans to small- and medium-sized scientific and technological enterprises increased by 24.3% year on year, 13.2 percentage points higher than the growth rate of loans overall. The outstanding balance of loans to specialized and sophisticated enterprises that produce new and unique products increased by 24% year on year, 12.9 percentage points higher than the growth rate of loans overall. The outstading balance of inclusive loans to micro and small businesses increased by 23.8% year on year, 12.7 percentage points higher than the growth rate of loans overall. A total of 56.52 million micro and small businesses received the inclusive loans, a year-on-year increase of 26.8%. At the same time, the PBC guided policy and development banks to free up 739.9 billion yuan through policy and developmental financial instruments, and made full use of 800 billion yuan in new credit quotas to mainly support infrastructure development. By the end of 2022, the outstanding balance of medium- and long-term loans to the infrastructure sector increased by 13% year-on-year, 1.9 percentage points higher than the growth rate of loans overall.

Third, overall financing costs of the real economy dropped significantly. While major European and American economies raised interest rates sharply and swiftly, China's loan prime rate (LPR) reforms continued to deliver benefits. The one-year and five-year LPRs were lowered by 15 and 35 basis points, respectively, helping to reduce overall financing costs of the real economy. In 2022, the weighted average interest rate on newly issued corporate loans was 4.17%, 34 basis points lower than the previous year. Meanwhile, the PBC established a market-based adjustment mechanism for deposit interest rates to keep the cost of bank liabilities stable. In 2022, the weighted average interest rate of new time deposits was 11 basis points lower than that of the previous year.

The year 2023 is the start of fully implementing the guiding principles of the 20th CPC National Congress. The PBC will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly act on the guiding principles of the 20th CPC National Congress and the Central Economic Work Conference, work unswervingly both to consolidate and develop the public sector and to encourage, support, and guide development of the non-public sector, stay committed to the general principle of pursuing progress while ensuring stability, make prudent monetary policy more targeted and effective, focus on expanding effective demand and deepening supply-side structural reform, and contribute to high-quality and moderate economic growth.

Thank you.

Shou Xiaoli:

Now we will open the floor for questions. Please identify the media outlet you represent before raising a question.

Reuters:

The Central Economic Work Conference stressed that the prudent monetary policy should be targeted and effective this year, with reasonable and sufficient liquidity to be maintained. In this context, is there room to further cut interest rates and RRR? Will structural tools be used more? Thanks.

Xuan Changneng:

As mentioned in my opening remarks, the prudent monetary policy aims to ensure better coordination in expanding domestic demand and advancing supply-side structural reform. On the one hand, we will make efforts to support the expansion of domestic demand. Reasonable and ample liquidity will be maintained. Financial institutions will be guided to act in accordance with the market-oriented and law-based principle, and properly manage the scale and pace of granting credit. We will put forward measures in a timely manner so that they will produce effects early on. The prudent monetary policy will proactively coordinate with fiscal and social policies, providing greater support for enterprises to stabilize and expand employment and for key groups to start businesses and find jobs, and increasing the incomes of urban and rural residents in multiple channels. We will ensure strong support for the aggregate demand of society, but in a reasonable and appropriate way. A deluge of strong stimulus policies will be avoided. We will work to ensure the balance between stabilizing growth, employment and price. On the other hand, we will give better play to the guiding role of structural monetary policy instruments. We will continue to make better use of the carbon emission reduction facility and the central bank lending for sci-tech innovation and others. Support will be provided for accelerating the building of a modern industrial system. Preferential policies, such as the instrument supporting inclusive loans for micro and small businesses, will be better implemented. Strong support will be given to the construction of key infrastructure and major projects in areas such as energy, transportation and water conservancy. Financial services for rural revitalization will be enhanced. We will work to achieve a high level dynamic equilibrium between effective supply and demand.

Currently, as epidemic prevention and control measures have been optimized and economic circulation has returned to normal, the confidence of micro entities will be gradually restored and their vitality gradually unleashed. We will take more measures to boost market confidence and stimulate the vitality of micro entities. First, we will work to lower the overall financing costs for businesses, reduce costs for personal consumption, and alleviate the debt burden for micro entities to improve people's spending power and enterprises' investment capacity. Second, we will stay committed to unswervingly consolidating and developing the public sector and unswervingly encouraging, supporting and guiding the development of the non-public sector. We will guide financial institutions to strengthen and refine financial services, step up support for private micro and small enterprises in the manufacturing and service sectors, and further promote the instrument supporting debt financing of private enterprises. Third, we will encourage spending on housing, automobiles, and other big-ticket items, and strengthen comprehensive financial support for services consumption with a focus on key areas such as education, culture and sports. Fourth, we will maintain financing for the real estate sector in a steady and orderly manner. Guided by the principle that houses are for living in, not for speculation, we will adopt city-specific measures to implement a differentiated housing credit policy. We will make full use of policy instruments, including a special lending facility to ensure the delivery of pre-sold housing projects and loan programs to support pre-sold housing project delivery, to protect the legitimate rights and interests of homebuyers. We will carry out programs to improve the balance sheets of quality real estate enterprises and take effective measures to prevent and diffuse risks for quality leading real estate enterprises. We will improve financial policies to support rental properties and advance a smooth transition of the real estate sector to a new model of development. Thank you.

Zou Lan:

I would like to make a few more points for your reference. The structural monetary policy instruments that have been mentioned have attracted wide attention from all sectors of society. Over the past two years, the PBC has conscientiously implemented the decisions and plans of the CPC Central Committee and the State Council, giving full play to the role of the monetary policy in adjusting both the aggregate and structure. Structural monetary policy instruments have been frequently applied. Especially since last year, many monetary policy instruments have been introduced. Generally, structural monetary policy instruments focus on key sectors, adopt reasonable and moderate approaches, and build up ample room for maneuvering. As of the end of last year, the outstanding value of structural monetary policy instruments stood at about 6.4 trillion yuan. They have played an active role in guiding financial institutions to ensure appropriate credit supply, allocating more financial resources to key areas and weak links, keeping a steady growth in the aggregate monetary and credit supply, and stabilizing the economy's fundamentals.

China's structural monetary policy mainly focuses on key areas and weak links in the national economy, including inclusive finance, green development, and scientific and technological innovation. Specific structural monetary policy instruments are regularly released on the official website of the PBC. You can keep up to date on them. Recently, we have been working on introducing some other structural instruments. These instruments mainly provide support for ensuring stability in the real estate market, including loan programs to support pre-sold housing project delivery and rental properties. We will release more details after the introduction of these structural instruments. 

Shangyou News:

Statistics show that China's aggregate financing to the real economy (AFRE) in December rose slightly on a year-on-year basis. What factors influenced the AFRE at the end of the year? How do you evaluate the overall performance of the AFRE in 2022? Thank you.

Ruan Jianhong:

This reporter raised two questions. The first question is about the AFRE in December. The second one is about the AFRE in the whole year. First, I will answer the question about the AFRE in December.

In December 2022, the country's increment in the AFRE reached 1.31 trillion yuan, a year-on-year decrease of 1.05 trillion yuan. That was mainly due to a relatively large reduction in bond financing. On one hand, financing of government bonds stood at 280.9 billion yuan, a year-on-year decrease of 886.5 billion yuan. That was because government bonds were issued early this year. The financing of government bonds in the previous 11 months amounted to 6.84 trillion yuan, a year-on-year increase of about 1 trillion yuan. Financial support for the real economy was strengthened in advance. On the other hand, fluctuations in the bond market affected the financing of corporate bonds to some extent. The financing of corporate bonds saw a net decrease of 488.7 billion yuan in December, a year-on-year decrease of 705.4 billion yuan. Despite the slight increase of the AFRE this month, RMB loans issued by financial institutions to the real economy — an important constituent of the AFRE — increased by 1.44 trillion yuan, a year-on-year increase of 405.1 billion yuan. Credit support for the real economy continued to be enhanced.

Now let's take a look at the AFRE for the entire year. Overall, the AFRE in 2022 increased by 32.01 trillion yuan, 668.9 billion yuan more than 2021's increment. The financial system played a significant role in supporting the real economy. Let's look at the structural data.

First, financial institutions strengthened credit support for the real economy. In 2022, RMB loans issued by financial institutions to the real economy increased by 20.91 trillion yuan, 974.6 billion yuan more than 2021's increment. 

Second, the net financing of government bonds kept growing steadily. In 2022, the net financing of government bonds stood at 7.12 trillion yuan, and the increment was 107.4 billion yuan more than that of the same period of the previous year.

Third, off-balance-sheet financing saw a markedly narrower decline. Please note that it was a markedly narrower decline in off-balance-sheet financing. In 2022, entrusted loans increased by 357.9 billion yuan, 527.5 billion yuan more than 2021's increment. Trust loans decreased by 600.3 billion yuan, 1.41 trillion yuan less than 2021's decrement. Undiscounted bankers' acceptances reduced by 341.1 billion yuan, 150.5 billion yuan less than 2021's decrement.

In addition, the financing of corporate bonds saw a less increase. In 2022, the net financing of corporate bonds reached 2.05 trillion yuan, and the increase was 1.24 trillion yuan less than the same period of the previous year. Equity financing was 1.18 trillion yuan, roughly in line with that of the previous year.

Thank you.

Hong Kong Bauhinia Magazine:

How was credit growth in the real estate sector in 2022? In the recent meeting on credit work, it was proposed to improve the balance sheets of good-quality real estate developers. What new policies will be adopted to ensure the stable development of the real estate sector? Thank you.

Zou Lan:

Thank you for your questions. Positive circulation in the real estate sector is of great significance for the sound development of the economy. The Central Economic Work Conference has made clear that the steady development of the real estate market must be ensured; reasonable financing needs of the real estate sector should be met; effective measures should be taken to prevent and mitigate risks associated with leading real estate developers; different policies should be adopted in different cities as appropriate to their local conditions; people's justified housing need and the need to improve their housing situation should be supported; the principle that houses are for living in, not for speculation should be upheld; and the smooth transition of the real estate sector toward new development models should be advanced. In response to the adjustments in the real estate market, the PBC, together with relevant departments, has worked to improve both supply and demand in accordance with the arrangements of the CPC Central Committee and the State Council to promote stability in the real estate market. As relevant policies gradually produce effects, we notice that recently the financing environment in the real estate sector, especially for quality real estate developers, has been significantly improved. I would like to present two figures here. From September to November 2022, loans to real estate development increased by over 170 billion yuan, 200 billion yuan more than the increment of the same period of the previous year. In the fourth quarter of last year, bonds issued by real estate developers in China were worth over 120 billion yuan, a year-on-year increase of 22%. According to the specific arrangement made by the Central Economic Work Conference, the PBC and relevant departments recently proposed to improve the balance sheets of good-quality real estate developers. Earlier this year, the PBC and the China Banking and Insurance Regulatory Commission jointly held a symposium on credit work. That proposal was an important part of the symposium, which has also been released on the official website of the PBC. According to information publicly disclosed by developers, over the past decade, the balance sheets of the real estate sector in China have gone through rapid expansion. The assets of the top 50 real estate developers in China have grown by 10 times, with some growing by 23 times. Meanwhile, the liability structure of the real estate sector is highly diversified, among which financial liabilities only account for 31%, including 14% in development loans from banks, 9% in foreign and domestic bonds, and 8% in financing via non-standard credit assets. Others mainly consist of funding for projects in advance from upstream and downstream enterprises, making up 30%, the personal house payments collected in advance, accounting for 32%, and delayed tax payments and payments on land purchases, representing 7%.

To implement the arrangement made by the Central Economic Work Conference and prevent the spreading of risk from property developers with financial problems to good-quality ones, relevant departments have drafted an action plan to improve the balance sheets of good-quality real estate developers. Targeting quality property developers who focus on their core businesses and are characterized by compliant operation, good qualification, and of systematical importance, the action plan gives priority to advancing 21 tasks in four aspects, including activating assets, sustaining liabilities, replenishing equity, and improving expectations. By taking a holistic approach, the plan aims to improve the cash flows of high-quality developers and guide their balance sheets back to the safety zone. The tasks include both measures to ensure the implementation of the policies that have been issued and a series of new measures, such as setting up special re-lending for national asset management companies and loan programs supporting rental properties. There is no specific list of good-quality real estate developers in the plan, and financial institutions can make their own decisions.

Concerning the "three red lines" rules on real estate developers, the plan has specified that the rules targeting 30 pilot developers will be optimized. While the overall framework of the rules remains unchanged, some parameters will be improved.

That's all for my answers. Thank you.

Nikkei: 

From December 2022, the digital RMB was included in calculating the amount of currency in circulation (M0). What is the purpose of doing so? Is it related to its official issuance in the future? 

Xuan Changneng:

Thank you for your questions. The digital RMB is a digital version of the legal tender issued by the PBC. Like the physical yuan, the digital yuan is part of the currency. From the perspective of statistics and management, the physical and digital yuan should be tallied, analyzed and managed together. In recent years, as pilot schemes for digital RMB have advanced, application scenes have expanded and transaction volume and stock have increased. Relevant management and statistical systems have been improved. Adding the digital RMB to the calculation of money in circulation (M0) can provide a more accurate result of the latter. By the end of 2022, the amount of digital RMB in circulation was 13.61 billion yuan. With digital RMB included, the year-on-year increase in M0 was 15.3%. 

According to the requirement of steadily promoting the research and development of digital currency in the 14th Five-Year Plan, the PBC will advance research and development pilots of digital RMB in an orderly manner, continue to improve the top-level design and the construction of the ecosystem, and strengthen the innovation of products and applications. We will gradually establish a sound management framework and continue to build upon the pilot plan's success. Financial statistics will monitor the issuance of digital RMB in the future and release relevant data to the public on a timely basis.

Thank you. 

Tianmu News: 

The Central Economic Work Conference mentioned working unswervingly both to consolidate and develop the public sector and to encourage, support and guide the development of the non-public sector. This has created policy support and public opinion base that encourage the private economy and private enterprises to expand and strengthen. What measures will the PBC take to bolster the development of the private sector? Thank you.

Ma Jianyang:

Thank you for your question, which is of much concern to many people. In recent years, the Chinese economy has faced downward pressure due to the repeated impact of the pandemic and the unstable international situation, while private companies have faced more difficulties. According to the decisions and arrangements of the CPC Central Committee and the State Council, the PBC has created structural monetary policies, improved credit support policies, expanded diversified financing channels and continued to optimize the financing environment for private micro and small enterprises. Mr. Xuan presented statistics about inclusive loans to micro and small businesses in detail, and I will provide two more pieces of data. Inclusive loans to micro and small businesses have grown by around 20% for four straight years. In November 2022, the weighted average interest rate of newly issued inclusive loans to micro and small businesses was at 4.9%, a relatively low level. Micro and small businesses' effective needs for inclusive loans and their payment capacity were affected by the pandemic, and financial support has provided important guarantees and backing for them. For example, the market-based extension reached 30%. 

Going forward, earnestly implementing the arrangements of the Central Economic Work Conference and adhering to a problem-oriented approach, the PBC will focus on issues of concern to society and guide financial institutions to treat enterprises from all sectors on an equal footing. In doing so, we will create a better financial environment for the further development of the private economy and private enterprises. First, we will provide greater credit support for micro and small enterprises in the private sector. Mr. Zou explained the work to improve structural monetary policy tools, and we will continue to use these tools well with intensified efforts. Second, we will further increase the scale of debt financing by private enterprises. In November 2022, we improved and strengthened the work regarding private enterprises' debt financing, resulting in the total issuance of 16.9 billion yuan of debt by private enterprises in more than a month. Next, we will further optimize supportive mechanisms for private enterprises' debt financing and enlarge their scale of debt issuance. Third, financial services for private micro and small businesses will be further improved. Now many banks provide online services. Some of them are able to complete the transaction of loans of less than 1 million yuan in one minute, which will further improve the financing service for private companies. Fourth, we will continue to promote the healthy and regulated development of platform companies. Previously, progress was made in rectifying large platform companies' financial businesses and most problems were solved. Going forward, we will continue to urge platform companies to go through with the rectification work, and improve day-to-day supervision. We will also support platform companies in technological innovation for them to achieve fruitful results in driving development, creating jobs, and competing on the global stage. Thank you. 

Thecover.cn:

The Central Economic Work Conference proposed to ensure the stable development of the housing market; what measures will the PBC introduce? Some people believe that the housing market should be stabilized by cutting interest rates, especially mortgage rates. What is the PBC's view? Thank you.

Zou Lan:

I have already covered your first question in my previous answer. I'll focus on the second question about interest rates.

The policy of home loan rates will affect specific interest rates that are negotiated and confirmed between commercial banks and customers. Specific interest rates are directly related to monthly mortgage payments, so this is a very important policy. Last September, the PBC and the China Banking Regulatory Commission (CBRC) released a notice that clarified how governments of eligible cities could independently decide to temporarily relax the lower limit of interest rates for new first-home loans in the fourth quarter. After introducing this policy, some local governments actively made relevant adjustments, which led to a certain decrease in the interest rates of new home loans. According to the statistics we have, the national average interest rate for newly issued personal housing loans in December 2022 was 4.26%, down by 1.37 percentage points year on year, which is the lowest since the statistics began in 2008. The newly adjusted policy mainly aims to establish a dynamic mechanism for first-home mortgage rates. We have seen the policy show effect, and will, in accordance with the principle of "city-specific housing policies", allow cities to adjust the lower limit for the rate in phases based on changes in local home prices, so as to form a long-term mechanism to support a stable and healthy development of the housing market.

As for property prices, NBSC publishes year-on-year and month-on-month statistics of housing prices from 70 large and medium-sized cities on a monthly basis. Relevant local government departments have the statistics for the cities not included in these reports. After analyzing historical data for the 70 cities, it has been found that housing prices show clear periodic fluctuations. Three consecutive months of rise or decline could indicate a trend change in housing prices. It often takes quite a long time to form this trend change. According to the new policy, although local governments evaluate housing price changes in each quarter, it might take a longer cycle than the evaluation cycle to adjust the lower limit of the home loan rates when the trigger conditions are reached. That is to say, the home loan rate policy is dynamically adjusted according to housing price trends; at the same time, the policy also has strong stability. After the establishment of the dynamic mechanism, the new policy of first-home loan rates will be implemented through two-way, dynamic, and flexible adjustments under the city-specific housing policies. It will not only effectively support local governments that face greater difficulties in the housing market to make full use of the policy toolkit but also guide the governments of cities with rising housing prices to withdraw in a timely manner so as to promote the steady and healthy development of the local housing market. 

Thank you.

Yicai:

What have financial regulators done to promote the rectification of the platform economy in the past two years? What progress has been made so far? What is the policy direction for rectifying the platform economy, including financial technology regulation? Thank you. 

Ma Jianyang:

Thank you for your questions. I have just made a brief introduction about this; let me add something more. The PBC, China Banking and Insurance Regulatory Commission and China Securities Regulatory Commission, under the leadership of the CPC Central Committee and the State Council, have made solid efforts to rectify prominent problems in Ant Group and 13 other large platform enterprises since November 2020, according to the deployments of the Office of Financial Stability and Development Committee under the State Council. The problems included unlicensed businesses, regulatory arbitrage, unregulated expansion and behaviors that infringe on consumers' rights and interests. For more than a year, regulatory authorities, and especially those 14 platform enterprises, have taken active steps, demonstrated their understanding and achieved some positive results. Currently, most of the problems have been rectified. Large platform enterprises' awareness of rule-based business operation, fair competition and consumer protection has increased significantly, and their financial services have continuously improved. Meanwhile, financial authorities have tackled both symptoms and root causes and accelerated the development of the regulatory system. They introduced a series of targeted systems and documents in the fields of third-party payments, personal credit, internet deposits, insurance, securities and funds. The framework of a normalized supervision system of financial services of platform enterprises has taken shape, which has laid a sound institutional foundation for ongoing normalized supervision. 

Next, financial authorities will earnestly implement the principles of the 20th CPC National Congress and the Central Economic Work Conference, work unswervingly both to consolidate and develop the public sector and to encourage, support and guide the development of the non-public sector, place equal emphasis on development and regulations, and support the sound development of the platform economy. First, we will continue to speed up the rectification of a few unsettled problems of relative platform enterprises to complete the rectification work. Second, we will improve normalized supervision, regulatory systems and mechanisms. We will strengthen the regulatory capacity in science and technology, support platform enterprises to operate in accordance with rules and the law, and develop financial services in a steady and prudent fashion. We will show no tolerance for financial activities in violation of laws or regulations. Third, we will do research and formulate financial measures to promote the sound development of the platform economy. This will include supporting platform enterprises in improving their capacity for scientific and technological innovation, quality and service efficiency, thus consolidating and enhancing their international competitiveness. We will give full play to their abilities in spearheading development, creating job opportunities, and international competition. Thank you. 

CCTV:

What are the expectations and policies of the PBC in response to interest rate hikes by the U.S. Federal Reserve and its potential spillover effects? Additionally, given the grim situation in relation to foreign trade, will the RMB continue its trend of appreciation in the early part of the year? Thank you. 

Yi Changneng:

Since 2022, major developed economies, including the U.S., the eurozone and the U.K., have significantly tightened their monetary policies by aggressively raising interest rates. This has tightened the global financial system and caused emerging market economies to experience pressure from cross-border capital outflows. The market has certain expectations of interest rate hikes by the U.S. Federal Reserve in 2023. China has a big economy that is hugely resilient. In response to the COVID-19 pandemic, China has implemented normal monetary policies, instead of resorting to a deluge of strong stimulus policies, to maintain reasonably ample liquidity and ensure stable financial support for the real economy. China's financial system has shown great initiative and stability. Moreover, expectations of the RMB exchange rate are stable. All these are conducive to buffering and dealing with external risks, especially spillovers from interest rate hikes by developed economies. Generally speaking, developed economies' adjustments to monetary policies have a limited impact on China and may have a greater impact on other small emerging market economies. 

Next, the PBC will continue to adopt a comprehensive approach and react to developed economies' adjustments to monetary policies actively and prudently. We must make economic stability our top priority and focus on the domestic economic situation. We will ensure the proper intensity and pace of prudent monetary policies based on the domestic economic situation. In addition, we will increase the flexibility of the RMB exchange rate to enhance its function of adjusting the macroeconomy and international balance of payments. We will guide market entities to establish risk-neutral awareness, and strengthen unified, macroprudential management of cross-border capital flows. We will also strengthen expectation management and keep the RMB exchange rate generally stable at an adaptive, balanced level. In particular, we will guide enterprises to do a good job at hedging and establishing risk-neutral awareness.

Regarding the RMB exchange rate, the Chinese yuan has gradually appreciated against the U.S. dollar since mid-November 2022 as the economic stimulus policies started to take effect, and China's COVID-19 prevention and control measures have been optimized and financial measures to support the property sector have been introduced, as well as the market expected slower interest rate hikes from the Federal Reserve, and the dollar index retreated from its highs. The RMB's spot exchange rate against the U.S. dollar opened below 7.0 on Dec. 5.

The current and future trend of the RMB exchange rate could be affected by multiple factors, such as the domestic and international economic and financial situation, the country's balance of payments, market risk appetite and so on. It is inevitable that exchange rate forecasting in the short term is inaccurate. Overall, we have a solid foundation to maintain the basic stability of the RMB exchange rate. Recently, China's economic recovery has been on track with the nation constantly optimizing COVID-19 prevention measures. Moreover, China has basically maintained price stability in the face of high global inflation. The growth of China's trade surplus is likely to slow down, considering that the economic sentiment index of major economies has declined. The RMB exchange rate will remain basically stable under the influence of a variety of factors. Through years of financial reform and opening-up, China has greatly increased the depth and breadth of its foreign exchange market. The RMB exchange rate has become more flexible, market expectations have been kept stable, cross-border capital flows have been made orderly and the basic balance in international payments has been maintained. As a result, the RMB exchange rate will continue to remain basically stable at an adaptive and equilibrium level.

Thank you.

Shou Xiaoli:

Two more questions, please.

Xinhua News Agency:

Inflationary pressures in some countries have drawn much attention in the market. The central bank warned against future inflation risks in its report. Does the central bank think there will be inflation in our country in 2023? How will the central bank respond to the risk? Thank you.

Zou Lan:

It was indeed mentioned in the monetary policy report of the third quarter of 2022. We have also noted that discussions from all walks of life have been quite heated since the report was released. Mr. Xuan Changneng, vice governor of the PBC, also mentioned it just now. Last year, many countries around the world endured the highest inflation in decades. In stark contrast, China has kept price levels basically stable. Our achievements did not come easily. If we look back over the past five or 10 years, we can see that China's consumer prices have sustained an average annual growth rate of around 2%, which fully proves the strengths of our socialist system and the effectiveness of macro regulation. This also benefited from the resolute implementation of the decisions and plans of the CPC Central Committee and the State Council and coordinated efforts to ensure supply and price stability in key areas such as energy and food. At the same time, we have followed a prudent monetary policy and refrained from adopting a deluge of strong stimulus policies to foster a sound monetary and financial environment for price stability.

In 2023, China's inflation is expected to remain moderate, but we should also pay attention to the potential for an increase. On the one hand, China's inflation is expected to remain stable due to abundant supply and recovering demand, and we did not issue excessive currency. Currently, China's economy is still on a path of recovery, and the industrial and supply chains are operating smoothly. However, inadequate effective demand is still a prominent problem, and the output gap is still negative. In the short term, inflationary pressure is generally under control. In the medium and long term, as one of the world's major producers, China will continue to maintain a general balance between supply and demand, pursue a prudent monetary policy, and have stable inflation expectations. All these will provide favorable conditions to keep prices basically stable. On the other hand, there is still uncertainty about price levels, so we must not lower our guard against inflation. We must keep a close eye on the possibility of further inflation. Domestically, for some time, M2 growth rate in China has remained high, and the possibility of a lag in the impact on prices cannot be ruled out. As China optimizes its COVID-19 prevention and control measures, people's ability to consume will gradually improve, and aggregate demand will also increase, which is likely to put upward pressure on inflation. Internationally, geopolitical conflicts could disrupt global energy supplies and inflation could remain high throughout advanced economies, so we need to be wary of imported inflationary pressure.

In the next stage, the PBC will adhere to the general principle of seeking progress while ensuring stability, pursue the strategy of expanding domestic demand, and deepen supply-side structural reform, while prioritizing efforts to stabilize growth, employment, and prices. The bank's prudent monetary policy will be targeted and effective, eying short-term and long-term effects at the same time, balancing between economic growth and stability of prices, and pursuing both internal and external equilibrium. Furthermore, the bank will strengthen coordination among policies to promote the effective improvement of the economy's quality and reasonable growth.

ThePaper.cn:

At the end of December, M2 grew by 11.8% year on year, 2.8 percentage points higher than the same period in 2021. What is the reason for the high level of M2? What is your perspective on its future trend? Thank you.

Ruan Jianhong:

Thank you for your questions. According to published data, at the end of 2022, the M2 balance was 266.43 trillion yuan, a year-on-year increase of 11.8%. This rate is a 0.6 percentage point lower than the previous month (end of November 2022) and 2.8 percentage points higher than the same period of the previous year (end of 2021). The high growth rate of M2 is mainly due to the increased financial support of financial institutions for the real economy and the corresponding increase in derived currencies.

First, financial institutions significantly increased their bond investments. In 2022, bond investments by financial institutions increased by 6.92 trillion yuan, a year-on-year increase of 1.58 trillion yuan. Among these investments, government bond investments grew by 1.39 trillion yuan.

Second, various RMB loans rose steadily. In 2022, various RMB loans increased by 21.31 trillion yuan, a year-on-year increase of 1.36 trillion yuan.

Third, the equity and other investments of financial institutions increased significantly. In 2022, equity and other investments increased by 522.5 billion yuan, a year-on-year increase of 566.3 billion yuan.

At the same time, the central bank turned over profits of 1.13 trillion yuan, increasing the financial resources available to the government. After fiscal expenditures, the growth rate of M2 increased by around half a percentage point.

In 2023, the PBC will resolutely put into action the spirit of the 20th CPC National Congress and the Central Economic Work Conference, ensure its prudent monetary policy is targeted and powerful, and maintain credit support for the real economy. It is expected that the growth rate of M2 will remain stable and the reasonable ample liquidity will be maintained. Thank you.

Shou Xiaoli:

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

Translated and edited by Zhang Liying, Wang Qian, Xu Kailin, Wang Wei, Huang Shan, Liu Jianing, Liu Sitong, Yan Xiaoqing, Zhang Junmian, Yang Xi, Ma Yujia, Dong Qingpei, Li Huiru, Yan Bin, Daniel Xu, 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. Lian Weiliang, vice chairman of the National Development and Reform Commission (NDRC)

Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA)

Mr. Zhang Zuqiang, deputy administrator of the China Meteorological Administration (CMA)

Chairperson: 

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

Date: 

Jan. 13, 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. Lian Weiliang, vice chairman of the National Development and Reform Commission (NDRC); Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA); and Mr. Zhang Zuqiang, deputy administrator of the China Meteorological Administration (CMA), to brief you on ensuring energy supply and winter heating. They will also take your questions.

Now, I will give the floor to Mr. Lian Weiliang.

Lian Weiliang:

Ladies and gentlemen, friends from the media, good afternoon. I would like to thank our friends from the media and all the other sectors of society for your interest in and support for our work on ensuring energy supply. Today, Mr. Zhang Jianhua from the NEA, Mr. Zhang Zuqiang from the CMA, and I are here to brief you on ensuring energy supply and winter heating. Please first allow me to introduce the current situation.

Since last year, the global energy supply and demand situation has been grave and complicated, especially with supply shortages and drastic price fluctuations. As China's economy has been deeply integrated into the global economy, domestic energy supply was inevitably affected by changes in international energy supply and demand and price fluctuations. As a result, we faced mounting difficulties and pressure in ensuring domestic energy supply.

The Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core attaches great importance to ensuring energy supply. The Central Economic Work Conference stressed strengthening regulation of supply and transportation of coal, electricity, petroleum, and gas to ensure a warm and safe winter for the people. The State Council has made specific deployments many times, calling on efforts to guarantee a stable economic performance, stable energy supply, and stable prices of electricity, gas, and other energy products for residents so that they can have a warm winter. This has been referred to as the “three guarantees.” The NDRC, the NEA, and other departments under the inter-ministerial coordination mechanism for ensuring supply and transportation of coal, electricity, petroleum, and gas have thoroughly implemented the guiding principles of the 20th CPC National Congress and the requirements of the CPC Central Committee and the State Council, and achieved initial success in ensuring winter heating and energy supply. Overall, the supply of energy has been guaranteed, and prices are stable across the country.

First, significant progress has been achieved in increasing energy production and supply. With safety as the premise, we have worked to ensure stable production and sufficient supply of coal, keeping daily coal production above 12 million metric tons in the heating season. We have fully tapped the potential for increasing petroleum and gas production, raising natural gas production by more than 10 billion cubic meters throughout the year. We have continued to improve power supply capacity, increasing the installed capacity of various types of power generation by more than 200 million kilowatts.

Second, energy reserve capacity and the capacity of ensuring energy supply during peak periods have been significantly enhanced. We have continued to enhance the natural gas reserve capacity. China's gas reserve capacity have exceeded 32 billion cubic meters. We have stored as much gas as possible before the winter, with 20 billion cubic meters available at present. The coal reserve capacity has been greatly improved. Our government-deployable coal reserve stands at about 50 million metric tons, while coal storage in power plants remains at a high level of about 175 million metric tons.

Third, the supply and price stability of energy products for people's livelihood have been effectively guaranteed. We have prepared resources for energy supply in advance. We have signed medium and long-term contracts with all the suppliers of coal for power generation and heating, and with the suppliers of gas for people's livelihood. Contract performance and transportation capacity have continued to improve. We have maintained mid- and long-term contract prices of thermal coal within a reasonable range, strictly implemented government pricing for household use electricity, and ensured that households under the coverage of the pipeline network consume natural gas at gate-station prices. In this way, we have guaranteed the sufficient supply and price stability of products for people's livelihood.

Fourth, the energy demand for economic and social development has been met. During the current heating season, the average national daily dispatched power generation capacity is 23.62 billion kWh, and the maximum daily power generation capacity is 25.5 billion kWh. The overall power supply and demand of the whole society has been balanced. The average national daily gas consumption is 1.15 billion cubic meters, and the maximum daily gas consumption is 1.3 billion cubic meters. All these have provided a strong support for economic and social development.

Thanks to the joint efforts of all parties, we have effectively responded to previous cold waves during this winter and maintained a stable and orderly energy supply nationwide. This was due to the strong leadership of the CPC Central Committee, which have proactively planned the building of energy production, supply, storage, and marketing systems in recent years to continuously improve China's energy supply capacity. We have also benefited from the strengths of the country's system , which creates synergy between an efficient market and a well-functioning government, and enable resolute actions to ensure energy supply for people's livelihood. Lastly, this success can also be attributed to our efforts based on China's realities to accelerate green and low-carbon energy transition, while making full use of coal and coal-fired power to avoid energy supply shortages. There are still more than two months until the end of the heating season, and more cold waves will arrive during the Spring Festival. Ensuring energy supply will continue to be a weighty task, and we must persevere in our efforts to deliver a solid performance in all areas of work.

First, we will continue to make efforts to increase energy production and supply. We will guide local governments and enterprises to well organize coal production during the Spring Festival holiday to ensure a stable supply. We will enhance electricity generation and supply capacity and keep domestic oil and gas fields operating safely at full capacity.

Second, we will strive to improve our capability to guarantee energy supply during peak periods. We will improve the comprehensive emergency distribution mechanism, featuring a complementary combination of coal, natural gas, and electricity. We will increase the output of thermal power generating units, improve hydropower distribution, and promote nuclear power, wind power, and photovoltaic power generation. Emphasis will be laid on response planning for power generation during peak periods and guaranteeing gas and coal resources used for power generation during peak periods.

Third, we will ensure energy supply in key regions. We will closely monitor heating companies' stockpiles in key regions, ratchet up railway transportation capacities, and carry out cross-provincial power distribution in a timely manner so as to ensure a safe and stable energy supply during key periods, including the Spring Festival.

Fourth, we will better organize resource imports. We will strive to stabilize the supply of imported natural gas and coordinate the management of underground gas storage facilities and LNG storage tanks to make sure that the gas supply for people's livelihoods will not be affected by fluctuating imports. Furthermore, we will secure coal imports to effectively supplement domestic supplies. 

Fifth, we will ensure people's basic energy needs are met. We will improve the electricity capacity management plan, enhance the emergency plan that prioritizes residential use of natural gas, and guide local governments to take joint actions with enterprises to activate the above-mentioned plans in an orderly manner. We will strengthen the monitoring of individual cases concerning heating and energy supply and quickly coordinate and handle problems to guarantee sufficient electricity and gas in order to meet people's living needs.

That's all for my introduction. Next, we would like to answer your questions. Thank you.

Shou Xiaoli:

Thank you for your introduction, Mr. Lian. Next, we'll move on to the question and answer session. Please identify the media outlet you represent before asking a question.

CCTV:

The world is facing tight energy supplies amid the current complex and grave international energy situation. Is a safe, stable, and steady energy supply guaranteed in China? Meanwhile, a new round of cold waves is about to hit the country as the Spring Festival approaches. What measures will be taken to guarantee a warm winter for the Chinese people? Thank you.

Lian Weiliang:

Thank you for your questions. Energy supply is of great concern to all of us. Since last year, facing a tight global energy supply and soaring prices, China has experienced increasing pressure to maintain its energy supply. Under the strong leadership of the CPC Central Committee and the State Council, China rolled out a series of effective response measures in an orderly manner. Clear progress has been made in stabilizing energy supplies and prices. As I introduced before, China's safe, stable, and steady energy supply is guaranteed, which can be demonstrated in five aspects: space for increasing production and supply, long-term agreements on resource imports, reserves of key energies, policies to stabilize prices, and mechanisms to ensure supplies in an emergency. 

First, there is space for China to increase its energy production and supply. Coal is our basic energy source. In recent years, our advanced coal production capacity has remarkably increased through measures of constructing large units, restricting small ones, increasing quality units, and cutting backward ones. Our power supply capacity has also been steadily enhanced, with the country's installed power generation capacity reaching 2.6 billion kW. Increases have been seen in oil and gas reserves and production. The production capacity of crude oil has exceeded 200 million metric tons annually, and that of natural gas is more than 220 billion cubic meters.

Second, we have signed long-term agreements on resource imports. People are concerned as to whether China's energy supplies, especially in crude oil and natural gas, which partly depend on imports, will be affected by fluctuations in the international market. I would like to take this opportunity to specify that spot goods are subject to being affected but that long-term agreements are relatively stable. We have followed international norms and market rules and secured imported resources through long-term agreements. For example, most of China's imported natural gas is secured through long-term agreements, which can effectively control and fend off risks of supply shortages and drastic price fluctuations.

Third, we have sufficient key energy reserves. We have substantially increased investment in reserve capacity building over the years. China's natural gas reserve capacity has exceeded 32 billion cubic meters. Natural gas has been stored as much as possible before the heating season. At present, halfway through the heating season, there are still 20 billion cubic meters of gas storage available. Moreover, there are about 50 million metric tons of coal that can be distributed by the government. As for coal stockpiles at power plants, the number remains at 175 million metric tons, fueling 22 days of heating, and can guarantee additional power generation during peak periods.

Fourth, we have launched policies to stabilize prices. Stable energy prices are crucial to people's well-being and stable economic performance. The pricing mechanism of coal has been further improved, enabling thermal coal prices to remain within the appropriate range. Steady progress has been made in reforms, making the pricing of on-grid electricity from coal-fired power plants increasingly market-based. The transmission mechanism of coal and electricity prices has been gradually improved. Government prices are strictly enforced in the arenas of residential electricity and gas so as to keep prices stable.

Fifth, we have set up a mechanism to ensure emergency supply. We have coordinated and let different types of energy, such as coal, natural gas, electricity, and petroleum products supplement each other so as to ensure their supply. The capability of ensuring energy supplies during peak usage has been steadily improved. The contingency plans for demand-side load management have been further improved. We will not limit the use of electricity or gas except in extreme scenarios. During extreme conditions, we will only limit the use of electricity and gas and not completely cut their supply in order to meet the basic demands for civilian energy use.

You just mentioned forthcoming cold fronts and the holiday energy supply. A cold front would increase heating energy demands. And if it brings rain, snow, and freezing weather, the production and transportation of coal will be affected as well as the power transmission. According to previous experience, general energy demands around Spring Festival are relatively lower, so supply can be guaranteed and the heating demands prompted by lower temperatures will be met. Even under extreme circumstances, when encountering unexpected civilian energy demands, we can act according to contingency plans and limit other energy usage to ensure civilian use is unaffected. Our energy supply is secure, and people will be able to enjoy sufficient heating in winter and have a happy Chinese New Year. 

We should take the new cold fronts seriously, maintain bottom-line thinking, and take active measures to respond to issues. The focus should be on ensuring production, transportation, peak-time operations, and quick responses to individual cases. 

First, to ensure production, we should guide energy enterprises to make contingency plans in the event of interruptions or a drop in production that may be caused by rain and snow. This is with the aim of maintaining production safely while making sure production does not drop or does not drop significantly. Second, to ensure transportation, we should guide power and heating plants and ports in the north to do a better job in unloading frozen coal and smooth the arteries and key links of coal transportation. Third, to ensure peak-time operations, we should enhance coordination, increase supply at peak times, and make sure additional civilian energy demands in extreme, low temperatures can be met. Fourth, to ensure quick response to individual cases, we should improve monitoring and pre-warning systems so as to identify potential risks before they grow into serious problems. All such issues should be tackled through coordination and in a timely manner. Thank you. 

Cover News:

As of last year, global energy prices have continued to remain high and unstable, especially in Europe, where prices of electricity and gas surged dramatically. Given that the energy supply of our country highly depends on imports, how will we maintain the basic stability of energy prices? Thank you. 

Lian Weiliang:

Thanks for your question. The stability of energy prices is relevant to people's livelihoods as well as the stable performance of the economy, and thus a public concern. We just said that the global energy demand and supply were complicated and not optimistic last year, with prices picking up sharply. Data shows that from January to November last year, energy prices, as part of the Consumer Price Index (CPI), went up 27% and 38% year on year in the United States and Eurozone, respectively, while natural gas prices increased 26.6% and 56.5% in the two regions and electricity prices 12.9% and 36.3%. In sharp contrast, China, also facing shockwaves from the global market and the test of extreme weather conditions, kept energy prices generally stable and within a reasonable range. This demonstrates the advantages of our system and the assorted measures for ensuring supply and stable prices. From January to November last year, the price of water, power, and fuel for civilian use, as part of CPI, only rose by approximately 3% in China, and the inflation in the price of gasoline and diesel was also lower than in Europe and the US. In particular, the prices of electricity and gas for civilian use were generally stable. 

China produces, consumes, and imports large amounts of energy. It is not easy to maintain a stable energy supply and prices while facing a grim external environment, especially with regard to stabilizing prices. The achievements of the past year are really something. The key to achieving them was to seriously implement the decisions and plans of the CPC Central Committee and the State Council; continue to improve the system of energy production, supply, storage, and marketing; and see stabilizing energy supply and prices as a systematic project and promote it through various measures. These efforts can be summarized as follows.

First, we focused on increasing effective supply. The increase of supply is the prerequisite for stable prices. So, we unleashed our advanced production capacities and improved energy production capabilities. We supported enterprises to go into full-capacity production while ensuring safety so as to increase effective supply. We also reinforced transportation coordination and links between production, transportation, and demands. 

Second, we focused on improving the pricing mechanism. A well-conceived pricing mechanism is the key to stabilizing prices. We innovated and improved a market-based pricing mechanism for coal and clarified the reasonable price range in the medium and long term. We deepened the reforms making the pricing of on-grid electricity from coal-fired power plants increasingly market-based and adjusted the price range of on-grid electricity from coal-fired power plants with rational means. We also insisted on ensuring people's livelihoods. Government pricing was strictly followed when it came to civilian electric power. Within the coverage of pipeline gas, civilian gas prices were fixed by combining ex-factory prices and pipeline transport prices. 

Third, we focused on making good use of medium- and long-term contracts. Signing medium- and long-term contracts is an important way to mitigate price fluctuations. We have encouraged domestic enterprises to sign long-term import agreements early and lock in import resources in advance. We have comprehensively improved the contract signing and implementation rate of long-term agreements. It can be said that medium- and long-term energy contracts have become the ballast to ensure supply and price stability.

Fourth, we have focused on the key role of energy companies in ensuring energy supply. Various energy companies have overcome difficulties and worked hard to increase production and supply. The government has tried its best to help energy companies tackle their difficulties, control costs through medium- and long-term contracts, rationally ease costs through the implementation of price policies, and increase fiscal, tax, and financial support to effectively alleviate the temporary difficulties in operation for some companies. This has created good conditions for ensuring energy supply and price stability.

Thank you.

Xinhua News Agency:

The new round of rainy and snowy weather this week will bring about a sharp drop in temperature. What is the overall situation of the current energy production and supply? Are we prepared for extreme weather? Thank you.

Zhang Jianhua:

Thank you for your questions. In accordance with the decisions and plans of the Party Central Committee and the State Council on ensuring energy supply and price stability, we have been working with relevant sides to make preparations, and going all out to do a good job to ensure that the supply of coal, electricity, oil, and gas can meet peak demand during winter.

In 2022, we kept on optimizing and adjusting the structure of the coal industry, actively expanded advanced coal production capacity, and phased out outdated production facilities. The elasticity of coal supply was significantly enhanced, and the annual average daily output remained at a reasonable level. Efforts were made to ensure the safe and stable supply of electricity. Over the year, coal-fired power generators with a total capacity of more than 30 million kilowatts were put into operation, and construction of generators with a total capacity of over 50 million kilowatts was started . The level of coal storage in the country's major power plants remained high. We fully promoted the increase of oil and gas reserves and production, which exceeded the phased goal set in a seven-year action plan for the oil and gas industry. Total crude oil production recovered to 200 million metric tons , and natural gas production exceeded 220 billion cubic meters, marking annual increases of more than 10 billion cubic meters for six consecutive years.

Since the beginning of the winter season, the energy supply has withstood the test of multiple rounds of cold waves. Since December last year, coal production has remained stable, and the electricity coal inventory has remained at about 175 million metric tons. The national electricity load has stabilized at about 1.1 billion kilowatts, with a maximum of 1.159 billion kilowatts, and power generation increased by 5.8% year-on-year. Since the beginning of this winter, the number of days when the daily supply of natural gas exceeded 1.2 billion cubic meters reached 38, and underground gas storage facilities operated at full daily capacity of above 170 million cubic meters to meet gas demand peaks for 20 consecutive days . At present, the consumption of coal, electricity, and natural gas across the country has dropped from the peak level, and the supply and demand situation has been generally stable and manageable. The energy supply in the current heating season has been guaranteed in terms of resource volume and regional balance. Governments at all levels and various energy companies have established emergency response mechanisms to ensure supplies. In order to further eliminate people's worries and smooth the channels for problem reporting and resolution, you can call the 12398 energy supervision hotline if the problem of heating services and supply by a specific energy company has not been resolved, or if the solution is not satisfactory after reporting. Thank you.

N Videos at Southern Metropolis Daily:

Recently, media reported that residents in areas where coal has been replaced with natural gas struggled with limited purchases and supply shortage. How do you view this problem? What measures should be taken to ensure residents' gas supply? Thank you.

Lian Weiniang:

Thank you for your questions. The CPC Central Committee and the State Council have attached great importance to the problem and required us to establish a special mechanism to monitor and solve the problem in a timely manner. After monitoring the problem you mentioned, we immediately mandated local governments to take measures to solve it. This has exposed the failure of some local governments and enterprises in implementing measures to ensure energy supply and stabilize prices for people's livelihoods. We will draw lessons from it, further consolidate the responsibility of ensuring energy supply in localities, and faithfully implement measures to ensure energy supply and stabilize prices for people's livelihoods. Hereby, I would like to emphasize that natural gas resources in the heating season are sufficient. The medium- and long-term natural gas contracts we signed before the heating season have exceeded the expected demand of various regions. Since the heating season began, actual consumption has been lower than expected. Overall, the total amount of natural gas is guaranteed. Therefore, no local governments or enterprises should limit the purchase of gas for people's livelihoods. Once such problems are found, relevant parties will be held accountable. If restrictions are due to insufficient gas supply contracts, the central government will coordinate relevant departments to increase supply; if they are due to other reasons, local governments will intervene to help on a case-by-case basis.

To prevent such problems from happening again, it is crucial to make sure that two parties shoulder their responsibilities. That is local governments should take responsibility for helping, supervising, and guaranteeing the supply and energy supply enterprises should take primary responsibility.

First, local governments should shoulder the responsibility for helping, supervising, and guaranteeing the supply. Local governments should provide more targeted assistance to enterprises supplying energy for people's livelihoods and help them solve specific difficulties through financial subsidies and other means if necessary. The reason why fuel enterprises in some urban areas have limited purchases and stopped the supply of natural gas, is objectively because, with the accelerated marketization of natural gas, the gas sources of those enterprises have become more diversified. Under the circumstance of a sharp rise in international natural gas prices, the cost of market-oriented gas purchases of some enterprises has grown rapidly. It is difficult to effectively handle these purchases in a short time, so phased operational difficulties are emerging. These problems must be addressed with due attention to both short- and long-range targets. Both symptoms and root causes should be addressed through deepening reform. At present, we will help enterprises on a case-by-case basis. Local governments should strengthen supervision over energy supply enterprises to ensure that they will effectively fulfill their responsibility to ensure supply. In extreme cases, where there is a risk of disruption to supply, local governments should make plans as soon as possible to guarantee supplies unconditionally. Before entering the heating season, the country has clearly required local governments to dispatch working groups to help enterprises involved in energy supply for people's livelihood, especially those in difficulty. We will urge local governments to earnestly implement these measures.

Second, enterprises should actively take responsibility for supplying energy. Enterprises engaged in energy supply for people's livelihood should strengthen their sense of social responsibilities, adhere to their mission of ensuring energy supply for the public good, and remain steadfast in ensuring energy supply and stabilizing prices. When difficulties arise, they should report to the authority instead of limiting purchases or cutting off supply.

Thank you.

Red Star News:

A set of nuclear energy heating projects, such as the demonstration nuclear heating project at the Hongyanhe nuclear power plant in Liaoning province, have been put into operation. How do those projects work? Will there be a further expansion to nuclear heating in the future? At the same time, how will you ensure the safety of these nuclear heating projects? Thank you.

Zhang Jianhua:

Thank you for your questions. Developing nuclear power in an active and orderly manner is a strategic plan made at the 20th National Congress of the CPC, which is a significant part of our energy strategy. It also plays an important role in optimizing our energy structure, ensuring energy security, building a new type of energy system, and helping to achieve carbon peak and carbon neutralization. At present, a total of 53 nuclear power units are in operation, with an installed capacity of 55.57 million kilowatts, accounting for nearly 5% of the total electric energy production. A total of 28 units with an installed capacity of 32.72 million kilowatts are under construction. Over the years, China's nuclear power units have maintained a good record in safety, with no operation incidents jeopardizing the environment and public safety. In addition, the main operation indicators have remained at an advanced international level.

Nuclear heating means extracting part of steam as a heat source while generating electricity in a nuclear power plant, carrying out a multi-level heat exchange system through heat exchange stations, and ultimately delivering this energy to residents through a municipal heating network. This is a safe and reliable concentrated heating method in urban areas since there are multiple shields to isolate nuclear power units from residents, transferring energy without the contact of mediums. NEA has attached great importance to nuclear heating. In 2019, the first-phase nuclear heating project at Haiyang nuclear power plant in Shandong province was put into operation. The plant was the country's first nuclear heating project and played an exemplary role. The second-phase project, with a heating area of 5 million square meters, has achieved full nuclear heating coverage in all urban areas of Haiyang city. In addition, Qinshan in Zhejiang province and Hongyanhe in Liaoning province have also since achieved nuclear heating. So far, these projects are running very safely and stably, bringing heating to the people. These projects have not only generated ecological and social benefits by replacing coal with nuclear energy, but also reduced local heating prices and improved economic benefits and people's livelihoods by advancing heating quality. It has formed an all-win situation. These projects have all gone down with local people.

At present, the follow-up projects of nuclear heating in Haiyang, Shandong province, and Qinshan, Zhejiang province, are under construction. Large-scale development of nuclear heating is taking shape, making it possible to provide heating over a further distance and a wider area. The NEA actively supports the further development of nuclear heating. Going forward, we will organize the work to summarize the experience of nuclear heating projects in operation, further promote its application under the premise of ensuring safety, and strive to make greater contributions to clean heating in China's northern region. Thank you.

China News Service:

What have been the climatic features of China since the beginning of winter? What challenges will these conditions bring to China's energy supply? What is your outlook for the weather during the Spring Festival? Thank you.

Zhang Zuqiang:

Thank you for your questions. Since the beginning of winter, China's climate has shown two prominent features. First, from the perspective of temperature, China has been 0.3 degrees colder on average compared to usual, but the temperatures have also fluctuated greatly. In December, the average temperature in China was 1.2 degrees lower than that in the same period on average. From Jan. 1 to yesterday (Jan. 12), the average temperature in China was 2.3 degrees higher than that in the same period on average, so the fluctuations in temperature have been relatively large. The second feature is that overall precipitation has been relatively small. According to our statistics, the national precipitation since the beginning of winter has been nearly 40% less than that of the same period on average.

The main impact on our energy supply is that cold air activity will bring low temperatures, rain, and snowy weather, which will affect energy supply in terms of both supply and demand. On the one hand, low temperatures brought by cold air activity will lead to an increase in residents' demand for heating; on the other hand, rain and snow may create some adverse effects on power supply facilities and raw materials, such as the transportation of coal to generate electric power. Therefore, from the perspective of supply and demand, there exist some pressures. The country's energy management and meteorological departments will maintain close communication and cooperation, respond in a timely manner, and take timely measures to minimize the adverse effects of the weather.

As for the weather during the Spring Festival, sunny to cloudy weather are expected to prevail in the north, while cloudy and rainy weather will prevail in the south. Generally speaking, based on current weather conditions, there will be three cold air events that will affect China. The first is the one that is affecting us now, that is, the large-scale nationwide rain and snowy weather from Jan. 11-15, which is expected to end on Jan. 15 or 16. The second cold air snap will occur between Jan. 19-20, which will affect northern China. The third cold air event will affect most of China's central and eastern regions around Jan. 23. Meteorological authorities will strengthen monitoring and forecasting and release relevant early warning information in a timely manner, making every effort to provide meteorological support services for the people in order to ensure a safe and peaceful Spring Festival.

Thank you.

Science and Technology Daily:

On the way to its carbon emissions peak and neutrality goals, China has seen its new energy sector including wind and solar power generation gain momentum. It has become an important part of the country's multi-energy supply system. What positive role has new energy played in safeguarding energy supply during winter? Thank you.

Zhang Jianhua:

Thank you for your question. In the past decade of the new era, under the scientific guidance of the new energy security strategy of "Four Reforms and One Cooperation" (namely, reforms in energy supply and consumption, market building and innovation, and comprehensive international cooperation) proposed by General Secretary Xi Jinping, China's new energy sector has made remarkable achievements. In 2022, the newly installed capacity of wind and photovoltaic power reached more than 120 million kW, and their cumulative installed capacity are expected to exceed 700 million kW, driving the installed capacity of renewable energy to top 1.2 billion kW. The wind and photovoltaic power industry has become one of the most competitive ones in the country.

With an increasing installed capacity, wind and photovoltaic power have been playing a significant role in safeguarding energy supply. First, wind and photovoltaic power have taken a bigger share in China's total newly installed capacity. According to statistics, in 2022, the newly installed capacity of wind and photovoltaic power accounted for 78% of the country's total newly installed capacity. Second, the country's newly added power generation capacity has been largely attributed to wind and photovoltaic power. In 2022, China's newly added wind and photovoltaic power generation capacity accounted for more than 55% of its total newly added. Third, the role of wind and photovoltaic power generation in ensuring supply is becoming more and more evident. According to power dispatching data from power grid companies, the average output of wind and photovoltaic power generation in most regions of the country accounted for about 15% of the average power load in 2022, or even 40% at its maximum. During the peak season in the summer of 2022, the average output coefficient of photovoltaic power reached 0.5 during the noon peak period in Jiangsu, Shandong, Zhejiang, and other provinces which have a larger installed capacity of photovoltaic power, providing strong support for the country's safe energy supply. Thank you.

ThePaper.cn: 

Recently, some heat suppliers said they were facing losses, and some even announced that they would stop supplying heat. It is known that heat suppliers are facing tremendous pressure in their business operations. Given this, what measures will be adopted? Thank you. 

Lian Weiliang:

Thank you for your question. We confirmed that the situation was true after an investigation. However, this is an individual case, and the problem has been addressed. Despite being an individual case, it reminds us that we need to make more efforts to investigate and identify risks and hidden problems in energy enterprises, in a bid to identify problems early and correct them while they are nascent. We will deal with every single problem that impacts energy and heat supply so as to keep people warm in the winter.

Some heat suppliers said that they are grappling with greater operating pressure due to surging costs in fuels. It is a problem that many enterprises have experienced, but we need to adopt proper and targeted approaches and methods in line with specific cases. We will make greater efforts in five aspects to ensure energy supplies. 

First, we will ensure the supply of resources. Regardless of their size or ownership, heat suppliers will all be involved in medium- and long-term coal contracts and strictly follow the contracts' pricing policies to control fuel costs appropriately. 

Second, we will ensure the full implementation of policies regarding pricing and subsidies. Local governments should deliver their promised subsidies promptly to alleviate the burden of heat suppliers hit by serious losses due to rising fuel costs. After the heating period, prices should be adjusted according to the law to manage the costs appropriately. The price adjustments regarding people's heating services should be strictly implemented via legal procedures.

Third, we will make sure that local governments take on the responsibility of ensuring energy supplies. If a heat supplier stops their supply, then local governments must take on the responsibility of ensuring heat supply unconditionally. 

Fourth, we will implement targeted measures to help enterprises. We will strictly implement a government responsibility system to assist and support heat suppliers. The working group sent by the government should take on responsibilities and make coordinated efforts to deal with the difficulties and problems encountered by enterprises in a timely manner. 

Fifth, we will implement the monitoring and fast-handling mechanism to deal with individual cases. While the total amount of heat supply can be ensured, it is crucial to prevent the emergence of various individual cases. We will thus give full play to the coordination mechanism to address individual cases in the supply of energy, as well as the hotline 12398 for complaints and reports on energy supervision across the nation, which has been mentioned by Mr. Zhang. By doing so, we will intensify public opinion monitoring and supervise the handling of individual cases in a bid to ensure that each case is assigned to the relevant department and addressed with feedback. Thank you. 

Shou Xiaoli:

Two last questions.

China Daily:

The global energy supply and demand situation has been grim and complicated since last year, leading to energy supply shortages and drastic price fluctuations. What measures has the NEA adopted to ensure domestic oil and gas markets remain stable? Thank you. 

Zhang Jianhua:

Thank you for your question. The Central Economic Work Conference in 2022 pointed out that major enterprises, especially State-owned enterprises, should take the lead in efforts to ensure supply and keep energy prices stable. The NDRC and the NEA have worked with departments, local governments, and enterprises to deal with the drastic fluctuations in the international energy market since the Russia-Ukraine conflict. We have made stepped-up efforts in the following aspects:

First, based on clear market expectations at the beginning of 2022, we have controlled the growth rate of natural gas consumption appropriately and regularly. By doing so, we have prevented large-scale imports of spot LNG products at high prices, while also avoiding the possibility of exacerbating the turmoil in the international market, contributing to our efforts to ensure a stable global market.

Second, we have made great efforts to discover more untapped reserves, and increase production, to ensure supply and maintain the stability of prices. In 2022, China's natural gas production increased by over 10 billion cubic meters, the sixth consecutive year the country has maintained such growth. As the import demand for natural gas is declining, the natural gas self-sufficiency rate, therefore, increased by almost 3 percentage points year on year.

Third, we have made greater efforts to build a new type of energy system with multiple energy sources complementing each other. Coal has been used as an emergency back-up source of power in industrial production or power generation during off-peak hours to reduce the use of natural gas. By doing so, we have ensured that natural gas is used to provide heat for residential homes during the heating season, which is our top priority. 

Fourth, we have ensured that centrally administered state-owned enterprises in the oil and gas sectors play a major role in maintaining stable supplies and prices. We have implemented a comprehensive pricing method for the “resources pool” of oil and gas products, which considers prices of domestically produced products, those of the long-term import contracts, and a small amount of the imported spot products. In this way, we have been able to ensure stable prices. 

Fifth, we have formulated lists of projects every year since we start to build our energy production, supply, storage and marketing systems. As such, greater efforts have been made to improve our oil and gas pipeline networks and gas storage facilities, with an average annual increase of 100 million cubic meters per day in our supply capacity over the past five years. We have overcome the bottleneck in oil and gas infrastructure capacity since the heating season in 2021. The infrastructure is capable enough to ensure abundant energy supplies during this year's heating season, thus ensuring supplies in terms of total amount and demand during peak hours as long as there are enough resources. Thank you. 

Economic Daily:

It is widely believed that energy enterprises that sign and honor medium- and long-term energy contracts play a crucial role in keeping stability in energy supplies. However, according to some enterprises, the medium- and long-term energy contracts they signed were not able to fully cover their demands, and some of these contracts could not be fulfilled. What will be done to further promote the signing and honoring of the medium- and long-term energy contracts? Thank you.

Lian Weiliang:

Thank you for your question. As has been mentioned, medium- and long-term energy contracts have served as both a ballast and an anchor for keeping energy supplies and prices stable. It is also an important institutional innovation based on China's national conditions to ensure stability in energy supplies and prices. Medium- and long-term contracts are of great significance for stabilizing supply and demand-side expectations, locking resources, controlling costs, and ensuring supplies. Just now, you mentioned some specific cases. After an in-depth investigation, we found that behind these cases exist, to varying degrees, the problem that enterprises did not sign medium- and long-term contracts or the contracts they signed did not fully cover their demands. Therefore, the role of medium- and long-term energy contracts should be given better play to ensure energy supplies. The problem of fulfilling contracts, as you mentioned, still exists. This year, we will take stronger measures to help solve these problems. To be specific, we will ensure that all contracts that should be signed will be signed and that enterprises will be punished for the breach of contracts.

First, we will ensure that all contracts concerned will be signed. In some medium- and long-term energy contracts, whether to include some contents in the contracts is utterly decided by market entities through their negotiations. However, concerning the contents that relate to public interests, people's livelihoods, and ensuring energy supplies, enterprises should officially sign medium- and long-term contracts under the guidance of the government in a well-regulated way. For example, we have made it clear that when it comes to coal for electricity power generation and heating supplies and gas supplies for household use, medium- and long-term contracts should be signed in a well-regulated way under the guidance of the government. It should also be ensured that all contracts concerned are signed. The goal we put forward in this regard is full coverage of 100%. At present, some small-scale heating and gas supply enterprises lack enough knowledge of the medium- and long-term contract system and fail to make full use of it. Some enterprises exist in special stages and are unwilling to sign medium- and long-term contracts. In response to that, we will guide various functional departments at all levels within the government to make greater efforts to publicize and explain the system to enterprises. Some enterprises have stated that they can't get medium- and long-term contracts. Coordination mechanisms to ensure the supply of coal, electricity, oil, gas, and transportation services at all levels will therefore work to solve the problems enterprises encounter when signing these contracts.

Second, we will ensure that enterprises will be punished for the breach of contracts. A credit system is the base of a market economy. Honoring contracts in good faith is the fundamental responsibility of enterprises. While signing contracts is important, fulfilling contracts is more important. Now, as there is a certain gap between prices in the medium- and long-term contracts and those in the market, there are some cases where some enterprises do not perform well in honoring contracts. The government will therefore tighten regulation of all medium- and long-term energy contracts. As of last year, over 300 complaints have been received regarding enterprises failing to follow or fulfill contracts. We have promoted relevant enterprises to rectify their problems, and most of these problems have been corrected. Concerning medium- and long-term contracts designed to ensure energy supplies, especially in contracts relating to coal for electricity power generation and heating supply, a punishment and constraint mechanism has been established to require enterprises that fail to fulfill their contracts offer three times the quantity and the price of resources as prescribed in the contracts. There are five cases where enterprises have failed to abide by their contracts. Since these enterprises refused to rectify their problems, we have taken measures to punish them in accordance with the punishment and constraint mechanism. We have also put these enterprises on a list of severely dishonest enterprises and will continue to monitor their credit. For government-led medium- and long-term energy contracts, especially contracts concerning people's livelihoods, we will ensure that all contracts concerned are signed and fully implemented. We welcome friends from the media and all sectors of society to strengthen oversight and report clues to us about enterprises that fail to abide by contracts, and we will strictly urge them to fully rectify their problems.

Thank you.

Shou Xiaoli:

Thank you to all the speakers and to the friends from the media for your presence. Later we will hold the next press conference. You are welcome to join us then.

Translated and edited by Zhang Liying, Wang Qian, Huang Shan, Zhou Jing, Liu Stiong, Yan Bin, Zhang Junmian, Qin Qi, He Shan, Zhang Rui, Wang Wei, Gong Yingchun, Ma Yujia, Xu Kailin, Li Huiru, David Ball, Daniel Xu, 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

Speaker:

Lyu Daliang, spokesperson of the General Administration of Customs of the People's Republic of China (GACC)

Chairperson:

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

Date:

Jan. 13, 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. Lyu Daliang, spokesperson of the General Administration of Customs of the People's Republic of China (GACC), who will introduce the situation 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! Welcome to today's press conference. It's a great pleasure to meet you. I'll begin by introducing China's import and export performance for 2022 and then answer your questions.

In 2022, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, China kept in mind both our internal and international imperatives and coordinated epidemic response with economic and social development, as well as balancing development and security, amid complex and severe domestic and international situations. Despite facing unexpected challenges, China's volume of foreign trade and imports reached new heights, with a steady improvement in their quality. According to statistics from the GACC, China's foreign trade value in 2022 was 42.07 trillion yuan, up 7.7% year on year. Exports saw a 10.5% increase to 23.97 trillion yuan, and imports rose by 4.3% to 18.1 trillion yuan. Specifically, there were five main features, which I will now outline:

First, China's imports and exports are resilient and large in scale. China's foreign trade value exceeded 40 trillion yuan for the first time in 2022, continuing to grow from the high base set in 2021 and reaching a new record high. China has been the world's largest trading nation for goods for six consecutive years. In the first and second quarters of 2022, the total value of imports and exports surpassed 9 trillion yuan and 10 trillion yuan, respectively. In the third quarter, the total value of imports and exports increased to 11.3 trillion yuan, a new quarterly record. In the fourth quarter, the total value of imports and exports remained at 11 trillion yuan.

Second, China's trading partners are well-distributed and have strong growth potential. In 2022, China's imports and exports with ASEAN, the European Union, and the United States reached 6.52 trillion yuan, 5.65 trillion yuan, and 5.05 trillion yuan, respectively, an increase of 15%, 5.6%, and 3.7%, respectively. During the same period, China's trade with countries along the Belt and Road increased by 19.4%, accounting for 32.9% of China's total foreign trade, up 3.2 percentage points. The country's trade with other members of the Regional Comprehensive Economic Partnership (RCEP) increased by 7.5%.

Third, general trade is growing rapidly and its share is increasing. In 2022, China's general trade reached 26.81 trillion yuan, an increase of 11.5%. It accounted for 63.7% of the total foreign trade volume, up 2.2 percentage points. Among general trade, exports rose by 15.4% to 15.25 trillion yuan and imports expanded by 6.7% to 11.56 trillion yuan. During the same period, processing trade reached 8.45 trillion yuan, accounting for 20.1% of the total foreign trade volume.

Fourth, the number of foreign trade entities is increasing and they have strong vitality. In 2022, the number of enterprises involved in exports and imports increased by 5.6% to 598,000. Among them, there were 510,000 private enterprises, an increase of 7%. Their imports and exports reached 21.4 trillion yuan, up by 12.9%, accounting for 50.9% of the total foreign trade volume, up by 2.3 percentage points. Meanwhile, foreign-invested enterprises and state-owned enterprises recorded 13.82 trillion yuan and 6.77 trillion yuan in foreign trade, respectively, accounting for 32.9% and 16.1% of the total foreign trade volume.

Fifth, the main products enjoyed stable supply and demand as well as abundant advantages. In 2022, China's imports and exports of electromechanical products reached 20.66 trillion yuan, up by 2.5% and accounting for 49.1% of the total import and export value. Specifically, exports of solar cells, lithium batteries, and automobiles increased by 67.8%, 86.7%, and 82.2%, respectively. In the same period, the export of labor-intensive products amounted to 4.28 trillion yuan, up by 8.9% and accounting for 17.9% of the total export value. Specifically, exports of bags and suitcases, shoes, and toys rose by 32.6%, 24.4%, and 9.1%, respectively. In addition, imports of energy products such as crude oil, natural gas, and coal totaled 3.19 trillion yuan, up by 40.9% and accounting for 17.6% of the total import value. The import of agricultural products reached 1.57 trillion yuan, up by 10.8 % and accounting for 8.7% of the total import value.

2022 was an essential year in the history of the Party and the country. The 20th CPC National Congress was successfully convened, drawing an ambitious blueprint for building a modern socialist country in all respects. Despite the triple pressures of demand contraction, supply shock, and weakening expectations, as well as many great challenges and difficulties, China still made outstanding achievements in foreign trade, which speaks volumes of its resilience. This is the result of the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core. Over the past year, with a focus on welcoming the 20th CPC National Congress, as well as studying, publicizing and implementing its guiding principles, customs authorities have developed a deep understanding of the decisive significance of establishing Comrade Xi Jinping's core position on the Party Central Committee 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, resolutely upheld Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and upholding the Party Central Committee's authority and its centralized, unified leadership, and unwaveringly implemented the decisions and deployment of the CPC Central Committee and the State Council. In accordance with the important requirements of preventing the epidemic, stabilizing the economy, and securing development, we have guarded the country's door and promoted the development and efficiently coordinated epidemic prevention and control at ports and the promotion of the steady growth of foreign trade, which has effectively facilitated the stable and quality development of foreign trade and made positive contributions to steady and sound economic growth.

In general, China's foreign trade secured new breakthroughs in 2022, and the scale, quality, and performance of imports and exports improved simultaneously. These achievements did not come easily. Looking ahead to this year, China's foreign trade development will still face many difficulties and challenges as the foundation for our economic recovery is still not solid, the external environment is turbulent, and the downward pressure on the global economy is mounting. While facing these difficulties and challenges, we must also recognize that China's economy enjoys strong resilience, tremendous potential, and great vitality and that the fundamentals sustaining its long-term growth have remained strong. Overall, our economy is expected to pick up this year, and we must be more confident in stabilizing the scale and optimizing the structure of foreign trade.

2023 is the first year when the guiding principles of the 20th CPC National Congress are implemented. The GACC is convening the national customs work conference today to study and deploy the work for 2023. Customs authorities will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly grasp 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 resolutely uphold Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and uphold the Party Central Committee's authority and its centralized, unified leadership. We will earnestly study and implement the guiding principles of the 20th CPC National Congress, effectively implement the major decisions and arrangements of the CPC Central Committee and the State Council, and cement loyalty, carry out missions, guard the door of the country, promote development, and work hard in solidarity. We will keep our feet on the ground and forge ahead, make greater efforts to stabilize the scale and optimize the structure of foreign trade, speed up the construction of modern socialist customs, and make new and greater contributions to promoting a Chinese path to modernization on all fronts.

Now, I would like to take your questions.

Xing Huina:

Thanks, Mr. Lyu, for your introduction. Now we will open the floor for questions. Please identify the media outlet you represent before raising questions.

Phoenix TV:

Last year, China maintained steady growth in foreign trade. What are the main driving factors? What are your expectations for foreign trade this year? Thank you.

Lyu Daliang:

Thank you for your questions. In 2022, facing the challenges of multiple factors that exceeded expectations, China's foreign trade achieved steady growth based on a high base number in 2021. Its annual volume topped 40 trillion yuan (about 5.94 trillion U.S. dollars) in 2022 for the first time, which made positive contributions to stable and sound economic development. In our view, the main factors driving the growth are as follows:

First, export markets expanded, and major products maintained sufficient competitive advantages. From a market perspective, in 2022, China's export to the ASEAN, the EU, and other major trading partners maintained rapid growth. Thanks to the accelerated expansion of emerging markets, China's export to countries along the Belt and Road rose by 20%, driving overall export growth by 6.1 percentage points. Exports to Africa and Latin America increased by 14.8% and 14.1%, respectively. From a product perspective, China's exports of industrial products increased by 9.9% in 2022, driving overall export growth by 9.4 percentage points. Exports of labor-intensive products maintained rapid growth, and the export growth rate of green and low-carbon products, such as solar cells, lithium batteries, and electric vehicles, surpassed 60%. New drivers of export growth increased rapidly. According to the latest data, China's share of global exports is estimated to reach 14.7%, topping the world for 14 consecutive years.

Second, imports were underpinned by the huge domestic demand. In 2022, the country took into account both domestic and international dynamics, coordinated COVID response with economic and social developments, and balanced development and security. As a result, China's economy saw steady and sound development, with its major economic indicators, such as value-added of industrial enterprises above the designated size and fixed-asset investment, rising continuously, which provided strong support for import growth. In 2022, exports of intermediate goods increased by 7.5%, driving overall import growth by 5.9 percentage points. In addition, high global commodity prices also contributed to the growth of import values to some extent.

Third, supportive policies injected a strong internal impetus for foreign trade development. In 2022, the Chinese government carried out a package of policies and follow-up measures to stabilize the economy. In the field of foreign trade, they included ensuring access to foreign trade, increasing fiscal, tax, and financial support, encouraging new forms of foreign trade, supporting foreign trade enterprises in securing orders and expanding markets, and improving trade security and facilitation. As the efficacy of these policies and measures continues to be unleashed, the vitality of China's foreign trade entities has been stimulated. In 2022, the number of enterprises involved in imports and exports increased by 5.6% compared with the previous year. The three major foreign trade entities -- private, foreign-invested, and state-owned enterprises -- gave full play to their respective advantages, and their import and export operations remained sound.

As for the trend of foreign trade, I have mentioned that we still face many difficulties and challenges. At the same time, our economy is expected to realize an overall recovery this year, and foreign trade development will enjoy many favorable conditions, so maintaining the scale and optimizing the structure of foreign trade have a solid basis. Thank you. 

National Business Daily: 

We've noted that the share of private enterprises in foreign trade surpassed 50% last year for the first time. Could you please provide a brief on that? Thank you. 

Lyu Daliang: 

Thank you for your question. The CPC Central Committee and the State Council have always attached great importance to private enterprises and the private sector. Last year, a package of policies and sustainable measures was issued to stabilize the economy, and then the vitality of various market entities, including private enterprises, was unlocked. According to customs statistics, the number of private enterprises recording import and export performance reached 510,000, with their foreign trade volume totaling 21.4 trillion yuan, up by 12.9%. There are several highlights, as follows: 

First, their proportion in foreign trade improved, and private enterprises played a remarkable role in stabilizing foreign trade. The principal position of private enterprises in foreign trade has been consolidated and they have continuously served as a stabilizer. In 2022, the share of private enterprises in the scale of imports and exports reached 50.9%, up by 2.3 percentage points year on year. It's the first time that their annual proportion exceeded 50%. The contribution rate of private enterprises to China's foreign trade growth reached 80.8%.

Second, ties with traditional partners maintained advantages, and emerging markets were vigorously explored. In 2022, the imports and exports of private enterprises to ASEAN, EU, and US, China's top three trade partners, all maintained doubt-digit growth rates, which were 27.6%, 12.6%, and 10.6%, respectively, accounting for 43.9% of private enterprises' total import and export volume. At the same time, the imports and exports of private enterprises to other BRICS countries, Latin America, and the five Central Asian countries grew by 22.1%, 14.5%, and 55.1%, respectively.

Third, the export of mechanical and electrical products and the import of agricultural products grew rapidly. As for exports, in 2022, the export volume of mechanical and electrical products by private enterprises totaled seven trillion yuan, up by 15.3% year on year. Among them, the growth rates of electronic components, electrical appliances, and auto parts reached 22%, 42.5%, and 19%, respectively. As for imports, in 2022, private enterprises imported agricultural products totaling 862.06 billion yuan, up by 14.9% year on year. The growth rates of imported bronze; medicines and medical and medicinal materials; and basic organic chemicals grew by 25.3%, 15.3%, and 8.7%, respectively.

Fourth, private enterprises in central and western regions became more vitalized. In 2022, the import and export of private enterprises in central and western regions grew by 21.5% and 21.2%, respectively, accounting for 20.1% of the total import and export volume of private enterprises, which was 1.4 percentage points higher than that of the previous year. 

CCTV:

Pilot free trade zones and free trade ports are at the forefront of China's opening-up. What work did the customs authorities do last year to promote the development of pilot free trade zones and the Hainan Free Trade Port? Thanks!

Lyu Daliang:

Thank you for your question. The construction of free trade zones and free trade ports is a major policy and plan of the CPC Central Committee and the State Council. In accordance with the CPC Central Committee's requirements on "implementing the strategy to upgrade pilot free trade areas" and "accelerating the Hainan Free Trade Port development ," the customs authorities will continue to deepen reform and promote innovation, accelerate the exploration of institutional opening measures such as rules, regulations, management, and standards, and actively support the development of pilot free trade zones and the Hainan Free Trade Port.  

In terms of supporting the development of pilot free trade zones, the customs authorities insists on institutional innovation as the core, upholds replicability and promotion as the basic requirements, and actively carries out the innovation of the customs supervision system in pilot free trade zones. In 2022, local customs authorities filed 33 innovations in customs supervision to the GACC, including a management mode on tracing to the source of Hainan 's offshore duty-free commodities. The GACC reviewed 53 innovative measures previously filed. It formed two innovative systems, including the "enterprise and group processing trade bonded supervision mode" and "international voyage ship transfer data reuse mode,” and replicated and promoted them across the country. Customs statistics show that in 2022, the total import and export value of China's pilot free trade zones was 7.5 trillion yuan, an increase of 14.5%. Among them, the export value was 3.3 trillion yuan, an increase of 18.1%, and the import value was 4.2 trillion yuan, an increase of 11.8%.

In terms of supporting the construction of the Hainan Free Trade Port, the customs authorities insist that “opening-up” can be achieved by way of “management.” We have drafted the “Regulations of the People's Republic of China on the Supervision of the Hainan Free Trade Port ,” and continuously promoted the implementation of early harvest policies such as “zero tariffs" to deliver results. We have accelerated the expansion of the pilot project of the "first-line release, second-line control" import and export policy system, approving and issuing a list of pilot enterprises. We have formed a "Key Work List" for the entire island's customs closed-up operation, and worked out timetables and wall chart operations to prepare for a comprehensive stress test. In the past two years, the import and export of goods at the Hainan Free Trade Port have developed rapidly. After exceeding 100 billion yuan for the first time in 2021, it reached a new level in 2022, breaking through the 200 billion yuan mark for the first time, reaching 200.95 billion yuan, an increase of 36.8%. Among them, the export value was 72.26 billion yuan, an increase of 120.7%, and the import value was 128.69 billion yuan, an increase of 12.8%. Thank you.

Tianmu News:

We have noticed that China is now managing COVID-19 with measures against Class B infectious diseases and it is no longer included in the management of quarantine infectious diseases. What work have the customs authorities done regarding epidemic prevention and control at ports and stations? Thank you!

Lyu Daliang:

Thank you for your question. Since the emergence of COVID-19, China Customs has fully implemented the decisions and plans of the CPC Central Committee and the State Council, preventing infections and imported cases at ports. We have carried out strict health and quarantine measures for inbound travelers and public transportation. Science-based and targeted measures have been taken to prevent infections of personnel, goods and the environment, to prevent the import of multiple diseases, and to prevent infections via land, sea and air transportation, making contributions to the country's fight against COVID-19.

After China started managing COVID-19 with measures designed for combating category B infectious diseases an d no longer placed COVID-19 under quarantinable infectious disease management , in accordance with the plans of the State Council inter-agency task force and the Frontier Health and Quarantine Law of the People's Republic of China and its detailed regulations, China Customs has carried out relevant work in a steady, orderly and science-based manner.

First, we improved health and quarantine measures at ports for inbound travelers. Following the requirements of the State Council inter-agency task force, we no longer conduct nucleic acid tests on all inbound travelers. Inbound travelers' nucleic acid tests within 48 hours before departure have been included in the customs health status declaration. We have implemented regular health and quarantine measures, including conducting checks on health declaration cards, temperature screening, medical screening and epidemiological investigation. At the same time, we have adopted differentiated response measures based on the results shown on the health declaration cards.

Second, we improved quarantine measures for imported goods. Imported cold chain food will no longer undergo random nucleic acid testing and preventive disinfection measures. Meanwhile, we will continue to apply the strictest possible standards, oversight, punishment, and accountability to ensure food safety. We will maintain contact with the relevant departments of export countries and regions, and urge them to follow the guidelines put forward by the Food and Agriculture Organization of the United Nations on preventing infections. As for non-cold chain products, there will no longer be risk assessments for COVID-19 infections and preventive disinfection measures. Since China started managing COVID-19 with measures designed for combating category B infectious diseases and no longer placed COVID-19 under quarantinable infectious disease management on Jan. 8, customs clearance has been carried out in a smooth and orderly fashion. Thank you.

CNBC:

Question about the development of cross-border e-commerce in 2022. Are there any countries or regions that have purchased goods from China? What are these goods? What are the prospects for cross-border e-commerce this year?

Lyu Daliang: 

Thank you for your questions. First, I will outline the data on cross-border e-commerce. According to preliminary calculations, in 2022, China's cross-border e-commerce imports and exports totaled 2.11 trillion yuan, an increase of 9.8%, with exports and imports increasing by 11.7% and 4.9% to 1.55 trillion yuan and 0.56 trillion yuan, respectively. In recent years, cross-border e-commerce has witnessed rapid development. China has introduced a series of relevant supporting policies to further unleash potential and give full play to the advantages of cross-border e-commerce. Thank you.

China News Service:

We have noticed that ASEAN has remained China's largest foreign trade partner for three consecutive years. Last year, the total value of imports and exports between China and ASEAN grew by 15%. What are the reasons behind the rapid growth in trade between China and ASEAN? How do the customs authorities view the situation? Thank you.

Lyu Daliang:

Thank you for your questions. The bilateral economic and trade exchanges between China and ASEAN have become closer since the two parties established a comprehensive strategic partnership in 2022. Last year, the total volume of imports and exports between China and ASEAN reached 6.52 trillion yuan, an increase of 15%. The volume of exports reached 3.79 trillion yuan, an increase of 21.7%, and the volume of imports reached 2.73 trillion yuan, an increase of 6.8%. During this period, ASEAN saw its proportion in China's foreign trade increase by 1 percentage point from 2021 to 15.5%, maintaining its position as China's largest trade partner.

Specifically, the factors contributing to the rapid growth in trade between China and ASEAN can mainly be attributed to the following aspects.

First, the effective implementation of RCEP has brought trade-creation effects and facilitated cooperation among industrial chains. Over the past year since the implementation of RCEP, the policy dividends have continued to be unleashed, contributing to closer economic and trade exchanges among countries in the region. ASEAN is an important trade partner of China in RCEP. In 2022, China's imports and exports with ASEAN accounted for 50.3% of its total imports and exports with other RCEP members. China's imports and exports of intermediate products with ASEAN increased 16.2% to 4.36 trillion yuan, accounting for 67% of China's total imports and exports with ASEAN.

Second, the ever-improving interconnectivity has facilitated economic and trade exchanges. With the solid progress of the construction of the new western land-sea corridor, the passage of goods in and out of China and ASEAN has become more convenient. Various modes of transportation have developed in a coordinated way, with railway transportation showing significant growth. In 2022, China's imports and exports with ASEAN by rail, water and air increased by 197.6%, 26.7% and 15.5%, respectively. The opening of the China-Laos Railway at the end of 2021 has provided new impetus to further deepen economic and trade cooperation between China and relevant countries. In 2022, among the goods transported by rail between China and ASEAN, 44.7% were through the China-Laos Railway, contributing more than 60% to the growth of imports and exports by rail between China and ASEAN.

Third, cooperation on agricultural goods has deepened, leading to an expansion in imports. In recent years, China has accelerated the pace of importing agricultural products from ASEAN members and continued to optimize quarantine access procedures for agricultural products and other key products. Various agricultural products, such as fresh durians from Vietnam, longans from Cambodia, and passion fruits from Laos, have gained new quarantine access in China. In 2022, the total value of agricultural products China imported from ASEAN rose 21.3% to 246.86 billion yuan, accounting for 15.7% of China's total imports of agricultural products in the same period, 1.4 percentage points higher than the previous year.

Economic and trade relations between China and ASEAN have a solid foundation and great potential for development. Looking forward, the two sides will enjoy broad areas of cooperation, integrated development strategies and smooth trade exchanges. Driven by the continuous improvement of trade and investment liberalization and facilitation, China-ASEAN trade is expected to achieve new and greater development. Thank you.

Nihon Keizai Shimbun:

We've been keeping an eye on trade between China and Russia. Could you share the data on China-Russia trade in 2022 and the GACC's assessment of trade between the two countries last year? Thank you.

Lyu Daliang:

Thank you for your question. I'll brief you on the relevant data on China-Russia trade. According to customs statistics, our imports and exports with Russia reached 1.28 trillion yuan in 2022, accounting for 3% of China's total foreign trade. In terms of scale, China-Russia trade maintained steady growth in 2022, and bilateral trade reached a new high. Thank you.

Nanfang Daily:

It has been one year since RCEP came into effect, and the benefits continue to be realized. Could you share with us the details about China's trade with other RCEP countries? What has the GACC done to promote the implementation of RCEP? And what has been achieved? Thank you.

Lyu Daliang:

Thank you for your questions. On Jan. 1, 2023, we marked the first anniversary of RCEP coming into effect. Over the past year, China has implemented RCEP with a high level of quality, reaped numerous policy dividends, and further promoted regional economic integration. According to customs statistics, China's imports and exports to the 14 other RCEP member countries in 2022 reached 12.95 trillion yuan, a 7.5% increase, accounting for 30.8% of China's total imports and exports. The trade has the following characteristics:

First, the proportion of imports and exports has steadily increased. As RCEP policy dividends continued to be released, its role in promoting intra-regional trade became more evident. From the first to the fourth quarter, China's imports and exports to other RCEP member countries accounted for 30.4%, 30.5%, 30.7% and 31.4% of China's total import and export in the same period, respectively.

Second, the trade has been dynamic. In 2022, China's trade with eight RCEP member countries exceeded double-digit growth, among which Indonesia, Singapore, Myanmar, Cambodia and Laos all experienced growth of over 20%. Our trade with the ROK was the largest among RCEP countries, reaching 2.41 trillion yuan, a 3.2% increase.

Third, industrial cooperation has been strengthened. In 2022, China's imports and exports of intermediate products to other RCEP member countries reached 8.7 trillion yuan, an 8.5% increase, accounting for 67.2% of China's total imports and exports with other RCEP member countries in the same period. In terms of major commodities, China's exports of mechanical and electrical products and labor-intensive products to other RCEP member countries went up by 13.2% and 20.7%, respectively. Electronic components, batteries and automobiles increased by 15%, 50.3% and 71.6%, respectively. China's imports of mechanical and electrical products, metal ore and ore sands, and consumer goods from other RCEP member countries accounted for 46.2%, 10.4%, and 10.2%, respectively. The import of energy products such as crude oil and natural gas also grew rapidly.

Fourth, private enterprises have had a strong performance. In 2022, the import and export of private enterprises to other RCEP member countries reached 6.56 trillion yuan, up 17.4%. This accounted for 50.6% of China's total imports and exports to other RCEP member countries in the same period, an increase of 4.3 percentage points over the previous year. 

Over the past year, the GACC has resolutely implemented the requirements of the CPC Central Committee and the State Council on RCEP implementation and conscientiously carried out various customs-related work.

First, together with the Ministry of Commerce and four other departments, we jointly issued the Guidelines on High-Quality RCEP Implementation, breaking down and refining 16 key tasks in three aspects and promoting the special evaluation of the implementation of RCEP-related measures at customs across the country. Second, we focused on the rules of RCEP in the field of customs inspection and quarantine, and improved relevant rules and regulations. We upgraded the customs operating system, standardized and simplified customs procedures, and continuously optimized the customs clearance process, in a bid to improve customs clearance efficiency and reduce costs. Third, we actively served enterprises, helping them seize the opportunities of RCEP and making full use of various preferential policies. Through publicity, training, seminars, visits and translation of regulations and standards of RCEP member countries, we helped them tap the RCEP market. We have built an enterprise-oriented service system targeting the role of RCEP in reducing technical barriers to trade, and released the interpretation of relevant measures and policies of RCEP members through the official Customs 12360 WeChat account and our portal website. We have introduced the approved exporter system, intelligent verification and self-printing of the RCEP certificates of origin, and other facilitation measures, providing quality services and guarantees for enterprises to enjoy benefits. Thank you.

Hong Kong Bauhinia Magazine:

As mentioned in the report to the 20th CPC National Congress, the Belt and Road Initiative has become a popular international public good and cooperation platform. Last year, China's trade with countries along the Belt and Road grew faster than the overall growth rate. What are the highlights? Thanks!

Lyu Daliang:

Thanks for your question. This year marks the 10th anniversary of the Belt and Road Initiative. Since its proposal, China's trade with countries along the Belt and Road has become increasingly close. From 2013 to 2022, China's imports and exports with countries along the Belt and Road registered an average annual growth of 8.6%. In 2022, China's trade with countries along the Belt and Road continued to maintain rapid growth, with imports and exports rising 19.4% year on year to 13.83 trillion yuan, 11.7 percentage points higher than the overall growth rate. Among them, exports hit 7.89 trillion yuan, up 20%, and imports reached 5.94 trillion yuan, up 18.7%. Major highlights include the following aspects.

First, its share of China's foreign trade continued to rise. In 2022, China's import and export volume with countries along the Belt and Road reached a record high, accounting for 32.9% of China's total foreign trade, up 3.2 percentage points from the previous year and 7.9 percentage points from 2013 when the Belt and Road Initiative was proposed. 

Second, China's imports and exports with the five Central Asian countries, the United Arab Emirates, Saudi Arabia and other trading partners grew rapidly. In 2022, China's imports and exports with the five Central Asian countries, the United Arab Emirates and Saudi Arabia increased by 45.4%, 42.1% and 37.2%, respectively. In the same period, China's imports and exports with ASEAN increased by 15% to 6.52 trillion yuan, accounting for 47.1% of the total value of China's imports and exports with countries along the Belt and Road.

Third, the industrial and supply chains between China and BRI countries have become even more complementary. In 2022, China's exports of intermediate products to BRI countries amounted to 4.44 trillion yuan, up 23.9%, accounting for 56.3% of China's total exports to BRI countries during the same period. Specifically, exports of textiles, electronic components, basic organic chemicals, and auto parts increased by 14.5%, 21.1%, 31.3%, and 24.6%, respectively. In the same period, China's imports of energy and agricultural products saw steady growth, reaching 2.46 trillion yuan and 370.41 billion yuan, up 58.8% and 13.4%, respectively.

Fourth, trade between China's private businesses and BRI countries has shown greater vitality. In 2022, the foreign trade of China's private companies with BRI countries totaled 7.85 trillion yuan, up 26.7%. The figure accounts for 56.8% of China's total trade volume with BRI countries in the same period, up 3.3 percentage points compared with the previous year.

In 2022, the GACC earnestly studied and put into practice the guiding principles of General Secretary Xi Jinping's important speech at the third symposium on the BRI. The GACC took the initiative to promote trade facilitation and security, and work toward the high-quality development of the BRI. First, Chinese customs actively expanded imports of high-quality agricultural products and foods from BRI countries. In 2022, Chinese customs signed 73 documents on inspection and quarantine cooperation with BRI countries, offering quarantine access or enabling trading activities for 60 kinds of agricultural products and foods. Second, focusing on BRI countries, Chinese customs promoted international mutual accreditation of and cooperation on Authorized Economic Operator (AEO) programs and advanced cooperation and exchanges on "single-window customs clearance" for international trade to further improve trade facilitation. Third, Chinese customs doubled efforts to streamline customs clearance procedures for China-Europe freight trains. At the beginning of 2022, the Partnership Program of Customs-Railway Operators for Promoting the Safety and Rapid Customs Clearance of China Railway Express (PPCR) between China and Kazakhstan began its trial phase at the Alashankou Port and Horgos Port. The PPCR arrangement between China and Belarus is also making accelerated progress in a bid to promote unimpeded trade.

Looking ahead, the customs authorities will focus on the high-quality development of the BRI, put into practice the concept of "Smart Customs, Smart Borders, Smart Connectivity ," and broaden and deepen cooperation with customs agencies of BRI countries and regions. In this way, we aim to make greater contributions to promoting policy coordination, infrastructure connectivity, and unimpeded trade. Thank you.

Red Star News:

Since last year, China has introduced a package of policies and follow-up measures to keep the economy stable. What efforts have the customs authorities made to ensure a steady increase in both the volume and quality of foreign trade? Thank you.

Lyu Daliang:

Thank you for your question. In 2022, the customs authorities resolutely implemented the guiding principles of General Secretary Xi Jinping's important instructions. We acted in accordance with the key requirements of ensuring effective COVID-19 containment, economic stability, and development security. The customs authorities have effectively coordinated the COVID-19 response with the efforts to ensure the stable growth of foreign trade, facilitated the implementation of the policy package and follow-up measures on keeping the economy stable, and spared no effort in ensuring a steady increase in both the volume and quality of foreign trade. Our actions can be mainly summarized in the following aspects.

First, we urged all customs authorities to fully implement the policies and measures for ensuring stable performance in foreign trade. The GACC successively introduced 10 measures to promote stable and improved performance in foreign trade, six measures to support small- and medium-sized enterprises, and seven measures to ease businesses' difficulties and lower their costs. Customs authorities at all levels acted accordingly, rolled out more than 1,300 detailed supporting measures according to specific conditions and the needs of enterprises, and redoubled their efforts in terms of protecting the interests of market entities, optimizing the customs clearance environment for the smooth flow of cross-border logistics, and safeguarding the stability and security of industrial and supply chains based on more careful analysis so as to ensure steady growth in foreign trade.

Second, to keep the operations of foreign trade firms stable, we provided consistent support, improved long-term service mechanisms, and helped them secure orders, expand markets and solve problems. We deepened the reform of diversified customs tax guarantees. We also promoted the practice of a subsidiary applying for customs guarantees with letters issued by the financial company of its parent to further reduce enterprises' financing costs and tax payments during customs clearance. "One policy for one enterprise" helped specialized and sophisticated enterprises that produce new and unique products and top enterprises of various industries to effectively use preferential measures regarding tax reduction and exemption, bonded material circulation, and so on. We supported more enterprises in becoming Advanced Certified Enterprises , facilitated the international mutual recognition of AEOs, and worked to enable enterprises to enjoy the same conveniences at home and abroad. In 2022, an additional 365 enterprises were classified as Advanced Certified Enterprises. We strengthened customs protection of intellectual property rights to inspire enterprises' enthusiasm for innovation. A total of 21,000 protection filings were added, registering an increase of 21%.

Third, to optimize the business environment at ports, we took special-purpose actions to promote cross-border trade facilitation, launched 10 facilitation measures in collaboration with other departments, promoted the application of single-window document processing for international trade, and consolidated the achievements in shortening customs clearance time. We increased the input of manpower and resources for customs clearance at ports, piloted shipside pickup for imported goods and direct loading upon arrival for exported goods at qualified ports, supported the expansion of pilot programs, such as "departure confirmation" and other models, and made every effort to ensure safe and smooth customs clearance at ports and facilitate the import and export of goods. In December 2022, the overall customs clearance time for imports and exports across the country was 32.02 hours and 1.03 hours, respectively, 67.1% and 91.6% shorter than in 2017.

Fourth, to foster new growth drivers in foreign trade, we have continued publicizing policies and measures for cross-border e-commerce. We have promoted central warehouses for the return of imported cross-border e-commerce retail goods and the B2B export supervision model, introduced measures to support enterprises in setting up overseas export warehouses, and continuously improved the quality and level of cross-border e-commerce development. As I said just now, China's cross-border e-commerce imports and exports climbed 9.8% year on year to 2.11 trillion yuan in 2022, of which exports were 1.55 trillion yuan, an increase of 11.7%, and imports were 0.56 trillion yuan, an increase of 4.9%.

In the next stage, customs authorities will thoroughly study and implement the guiding principles of the 20th CPC National Congress, conscientiously implement the decisions and deployment of the Central Economic Work Conference, continue to ensure the full implementation of policies and measures for keeping the economy stable, and go all out to maintain the scale and improve the structure of foreign trade so as to make new contributions to steady economic development. Thanks.

Xing Huina:

Today's press conference is hereby concluded. Thank you, Mr. Lyu. Thank you to all our friends from the media. Goodbye.

Translated and edited by Lin Liyao, Liu Qiang, Mi Xingang, Yuan Fang, Yan Bin, Zhou Jing, Cui Can, Huang Shan, Qin Qi, Wang Wei, Yan Xiaoqing, Zhang Rui, Xiang Bin, Zhu Bochen, Zhang Liying, Liu Sitong, Wang Qian, Wang Yiming, Yang Xi, Xu Xiaoxuan, 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:

Xu Chengguang, deputy director of the 2023 Spring Festival Transportation Special Group and vice minister of transport

Chen Kai, deputy director of the State Post Bureau

Wan Xiangdong, chief pilot of the Civil Aviation Administration of China (CAAC)

Huang Xin, director of the Passenger Transport Department of China Railway

Cai Tuanjie, deputy director of the Office of the 2023 Spring Festival Transportation Special Group and director general of the Transport Service Department of the Ministry of Transport (MOT)

Chairperson:

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

Date:

Jan. 6, 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. Xu Chengguang, deputy director of the 2023 Spring Festival Transportation Special Group and vice minister of transport. Mr. Xu will brief you on the work to ensure services during the Spring Festival travel rush and take your questions. Also joining us today are Mr. Chen Kai, deputy director of the State Post Bureau; Mr. Wan Xiangdong, chief pilot of the Civil Aviation Administration of China (CAAC); Mr. Huang Xin, director of the Passenger Transport Department of China Railway; and Mr. Cai Tuanjie, deputy director of the Office of the 2023 Spring Festival Transportation Special Group and director general of the Transport Service Department of the Ministry of Transport (MOT).

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

Xu Chengguang:

Ladies and gentlemen, friends from the media, good morning. It is my pleasure to meet with you here. To begin with, I would like to thank the friends from the media for their interest in the plans regarding the Spring Festival travel rush and their support for our work concerning transportation. Today, my colleagues, Mr. Chen, Mr. Wan, Mr. Huang, Mr. Cai, and I will brief you on the measures to ensure transportation services during the 2023 Spring Festival.

The Spring Festival travel rush in 2023 is the first of its kind since the 20th National Congress of the Communist Party of China (CPC) and also the first since China's COVID-19 response entered a new stage. The CPC Central Committee and the State Council have attached great importance to it. The matter has drawn widespread attention from all sectors of society, and the people are looking forward to it. To ensure a smooth Spring Festival travel rush, we will follow 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 put people and their lives first. We will better coordinate epidemic prevention and control measures with economic and social development. We will meet people's needs for a better travel experience and maintain normal economic and social order, regard them as our fundamental missions, and make every effort to ensure steady and orderly operation during the upcoming Spring Festival travel rush.

The Spring Festival travel rush this year will last for 40 days, running from Jan. 7 to Feb. 15. Compared with previous years, passenger flows and the pandemic situation have reached peak levels simultaneously in 2023, making the upcoming travel rush the most uncertain, complicated and challenging in recent years. In general, this year's Spring Festival travel rush has the following four features. First, passenger flows will increase significantly. As China has classified and also treated COVID-19 as a category B infectious disease, more people will engage in cross-regional travel at an accelerated pace. In addition, people's demand for returning to their hometowns during Chinese New Year, visiting friends and family, and traveling will be unleashed collectively. As a result, passenger flows during the upcoming Spring Festival will recover from a long-term low level and see rapid increase, while transportation organizations will operate at full capacity. According to preliminary analysis, around 2.095 billion passenger trips will be made during this year's Spring Festival travel rush, up 99.5% year on year, which will recover to 70.3% of the same period in 2019. In terms of the structure of passenger flows, it is estimated that family visits will account for 55% of the total passenger flows, work-related travel 24%, and tourism and business trips 10% each. As many universities and colleges started their winter vacations before the travel rush, students will account for a relatively small proportion of passengers compared with previous years. More people will choose to travel by driving, using intercity car-pooling services, and taking chartered buses . Estimates suggest that expressways nationwide will report an average daily flow of 26.2 million passenger cars, up 3.6% year on year. In terms of the times and places people will travel, it is expected that before the Spring Festival, the majority of people will travel from large cities to nearby cities and provinces that are major exporters of labor. As family visits and work-related travel are to overlap, passenger flows will report growth. After the Spring Festival, people will travel from major labor exporting provinces and small- and medium-sized cities to central cities. Passenger flows during this period will be relatively staggered and reach peaks on around Jan. 27 and Feb. 6. Second, the demand for freight transport will rise significantly. The Spring Festival travel rush in previous years has often seen an increase in passenger flows and decrease in freight transport. However, as the pandemic situation is set to reach peak levels during the upcoming Spring Festival, the freight volume of all sorts of medical supplies and preventative materials, daily necessities for the holidays, and key materials such as energy and food for winter and spring will surge. In particular, in small- and medium-sized cities and rural regions with poor logistics infrastructure, parcel delivery may be delayed in certain areas as front-line delivery workers will return to their hometowns and possible large-scale infections will cause personnel shortages. Therefore, we will face mounting pressure in coordinating passenger flow with freight transport during the Spring Festival travel rush and ensuring the smooth operation of both. Third, front-line workers are at a greater risk of infection. The Spring Festival travel rush will see intensive passenger flow and frequent freight transport. As such highly-efficient transport activities overlap with the peak of the pandemic, the risk of large-scale infection among front-line transportation workers will surge, and there will be greater pressure to ensure unimpeded services of passenger flows and freight transport. Fourth, risks and hidden dangers concerning workplace safety will increase. Since 2020, due to the repeated impact of the pandemic, China's transport sector has been facing a complicated situation where the risks of traffic safety and pandemic-related incidents intertwined. Particularly, the sector has been operating at a low capacity for a long period; vehicles have either been out of service or operating at a low capacity for a long time; the working skills of employees in the field have been getting rusty; and there are often more traffic accidents around Chinese New Year due to frequent severe weather conditions such as low temperatures, cold fronts, rain, snow and sleet. All of these pose severe challenges to workplace safety. In order to strengthen the management of workplace safety, prevent major accidents, effectively respond to emergencies and ensure people's safe traveling experience, all levels of the transportation sector should make more greater efforts.

It is worth noting that this year's Spring Festival travel rush is marked by many uncertainties, making it difficult to rely on past experience to analyze and assess the situation according to established rules. The current projections on the total volume, composition, and direction of passenger flow are based on current circumstances. They are intended to consider worst-case scenarios, make more solid preparations, and provide better services in accordance with bottom-line thinking. This will allow us to be fully prepared for epidemic prevention and control and transport service guarantees during the Spring Festival travel rush. We will closely track the situation, continuously study and assess it, and promptly optimize and adjust our measures to ensure sound transportation services during the Spring Festival.

Facing these challenges and pressures, the Party Central Committee and the State Council have put forward three precise requirements of "meeting the travel needs of the people, reducing the risk of COVID-19 transmission, and providing safe and convenient services." Leading comrades of the Central Committee have repeatedly issued important instructions and made clear requirements. Transport departments at all levels have made adequate preparations in accordance with the "highest standards, strictest requirements, and most practical measures." At the national level, with the approval of the State Council joint prevention and control mechanism, a special task force on Spring Festival travel rush was set up under the State Council joint prevention and control mechanism, led by the MOT and involving 16 ministries and units. A series of documents have been issued, including the Overall Work Plan for Epidemic Prevention and Control and Transportation Service Guarantee during the 2023 Spring Festival Travel Rush. In addition, a series of specific measures have been formulated, such as guidelines for epidemic prevention and control during the Spring Festival travel rush. A national television and telephone conference was held to systematically deploy the work. Regions and relevant departments have also made specific arrangements according to the deployment of the Spring Festival travel rush task force. At present, all preparations are basically in place.

The annual Spring Festival travel rush is always a big test for transport authorities, but this year's "exam" may prove even more challenging. General Secretary Xi Jinping said that when faced with major and difficult tasks, one's sense of responsibility and bravery in taking on the challenge is tested. All transportation workers fully understand the extreme importance of doing a good job in ensuring sound transportation services during the Spring Festival this year. We consider providing transportation services during this year's Spring Festival as an important test for implementing the spirit of the 20th CPC National Congress. To ensure that people travel safely and successfully during the Spring Festival, we will utilize our maximum capacity and provide the best services and conditions to create a safe, healthy, convenient, and comfortable transportation experience. We will do our utmost to ensure that the "first" and "last" kilometers of the journey home are smooth and organized, with a sense of responsibility to work hard for the benefit of the public and with a determination to collaborate and support each other. In this way, we aim to contribute to a peaceful and joyful Spring Festival for the people and to give a satisfactory answer to the Party and the people.

That's all for my introduction! Now, my colleagues and I would like to take your questions. Thank you!

Xing Huina:

Thank you for your introduction, Vice Minister Xu Chengguang. Now we will open the floor for questions. Please identify the media outlet you represent before raising a question.

China Media Group: 

The 2023 Spring Festival travel rush kicks off tomorrow. Just now, the spokesperson mentioned that this year's Spring Festival travel rush will see a significant increase in passenger flow. Could you provide us with a more specific forecast? Additionally, what measures has the transportation department put in place to ensure smooth and organized travel for the public? Thank you.

Xu Chengguang:

Thanks for the questions. In an earlier briefing, I explained the total amount of passenger traffic and their possible destinations. We predict massive growth in passenger traffic during this year's Spring Festival travel rush, nearly double that of the previous year. However, passenger traffic will only reach 70% of what it was in 2019. In the first place, I want to say that we fully consider the anticipated demands of public transport, maintain bottom-line thinking, and consider extreme scenarios such as huge passenger traffic, large numbers of infections among transportation workers, and a high frequency of safety accidents. We are fully prepared according to the three principles of full preparation, allocation according to demands, and timely responses. We have the ability to provide the public with adequate transportation services. There are four specific measures:

First, we will strictly implement relevant policies. We will follow the related policies and regulations of the Joint Prevention and Control Mechanism of the State Council and carry out measures to optimize pandemic prevention and control and manage COVID-19 as a Class B infectious disease, through well-conceived and precise approaches. We are committed to implementing pandemic prevention and control policies in the railway, road, waterway, civil aviation, and post and delivery sectors to enhance the protection of passengers and people working in such sectors. The special task force set up for the Spring Festival travel rush will coordinate member entities to strengthen guidance and planning. We will explore policies regarding flexible and staggered holidays to relieve the congestion of people visiting families and reduce concentrated travel pressure. For the movement of migrant workers, we will determine a reasonable timetable for temporarily stopping work before the holiday and resuming work afterward for workers to travel home and back to work at various times. For the movement of students, we will adjust and optimize holiday arrangements and guide students to return to school at staggered intervals to avoid heavy traffic. For the movement of tourists, we will set a reasonable ceiling for tourist numbers to ensure orderly movement. 

Second, we will strengthen the coordination of transport capabilities. We will take full advantage of comprehensive transportation, enhance the effective linkage of different transportation modes, and enhance coordination regarding operating time, organization and arrangement of traffic capacity. We will try our best to handle the dispersal of large passenger flows to smooth their "last mile" of travel. For migrant workers and students, who tend to travel at similar times, we will provide team service and door-to-door service to ensure the orderly movement of workers and staggered travel time of students. If conditions allow, point-to-point chartered vehicle services will be arranged. To address people's travel demands for visiting family and shopping at fairs in rural areas, shifts will be increased for passenger routes between urban and rural areas. Operating hours will be extended, and reservation services will be improved. We will do more to ensure transportation services are provided.

Third, we will optimize passenger services. To improve services for the Spring Festival travel rush, we will work hard to refine the travel experience of the public. Information sharing and capacity coordination between different transportation modes will be enhanced to improve passenger transfer efficiency. Ticket services will also be upgraded, and information about passenger transport will be released via multiple channels and in a timely manner. The pre-ticketing service will be available in advance for passengers so they may arrange travel at staggered intervals. We will assess passenger traffic according to changes, increase ticket windows, self-service terminals and security lanes in a timely manner, and promote measures such as online ticketing, e-ticket, and self-service ticket checking to expand paperless and non-contact services. We will improve barrier-free facilities and offer necessary help to passengers in need, including elderly people, children, sick people, people with disabilities and pregnant women. 

Fourth, we will strengthen services for managing the road network. We will reinforce the monitoring of main road networks and city roads, pay close attention to traffic on road networks near provincial boundaries, in popular cities and around important scenic areas, and promptly release information about road conditions and traffic congestion. We will guide drivers to choose their routes, travel time and destinations rationally to avoid peak traffic. We will ensure the operation of expressways and service areas, roads, waterways and locks, and commercial passenger transport services, and ensure services such as refueling, battery charging, dining and restrooms at service areas. 

And in the second place, although the pandemic is not over yet, and some places are still experiencing peak infection levels, many people still wish to return home for the Spring Festival to visit relatives and friends. However, we strongly encourage everyone to make reasonable travel decisions considering their own personal circumstances and those of their family members. This is particularly important for elderly individuals with underlying health conditions and families with expectant mothers, infants and children, as they should minimize travel to lower the risk of infection during the journey for themselves and their family members. People using public transport to travel home for the Spring Festival should strengthen self-protection, wear masks throughout the journey, ensure personal hygiene, and actively avoid traveling while still having symptoms. Thank you.

ThePaper.cn:

What is the CAAC's forecast for civil aviation transport during this year's Spring Festival travel rush? What preparations have been made to guarantee civil aviation services during the travel rush?

Wan Xiangdong:

Thank you for your question. As the first travel rush after China optimized its virus prevention policies and the downgrading of the management of COVID-19 from Class A to Class B, it is expected that the number of passengers traveling by civil aviation will increase significantly. During the Spring Festival travel rush, civil aviation departments nationwide will schedule 11,000 passenger flights on average per day, which is about 73% of that during the 2019 Spring Festival travel rush. It is expected that the overall passenger flow will exhibit characteristics of staggered travel for school holidays and going back to school, for returning home and getting back to work, and for trips and other journeys. There will still be peak passenger levels around the Spring Festival holiday and after the Lantern Festival. Based on current ticket bookings for the Spring Festival travel rush, the peak appears from Jan. 18 (the 27th day of the 12th lunar month) to Jan. 20 (the 29th day of the 12th lunar month). Given the booking volume, air routes, including Beijing to Sanya, Shanghai to Beijing, Beijing to Haikou, Shenzhen to Kunming, Shenzhen to Chongqing, Hangzhou to Kunming and Shenzhen to Chengdu, rank among the top.

On the premise of ensuring safety, the CAAC actively guides airlines to arrange flight plans in a rational and well-conceived manner to ensure transport capacity and guarantee resources.

First, we support adding domestic flights during the Spring Festival travel rush and encourage airlines to deploy capacity more flexibly. This will accommodate passenger travel to popular destinations and along popular routes, such as routes from Beijing, Shanghai, Guangzhou and other cities to Sanya, Haikou, Chengdu and Chongqing.

Second, we require all airports to strengthen contact with Spring Festival travel agencies of local governments, and inform them in advance of information, including arrival and departure flights at night and passenger volume, so that they can actively cooperate to ensure a smooth connection with the "last-mile" in urban traffic. As of Jan. 5, on top of regular domestic passenger flights, 10,313 domestic flights had been approved to be added during the Spring Festival travel rush, including 3,459 flights along routes involving Beijing, Shanghai and Guangzhou, accounting for 33.5% of the total added domestic flights. This will effectively meet passengers' travel needs to popular places and along popular routes.

In terms of guaranteeing aviation services, all civil aviation departments will continue to follow the people-centered development philosophy and implement the work requirements of providing earnest services. The goal is to improve people's sense of security, gain and happiness for civil aviation services and ensure passenger services during the Spring Festival travel rush.

First, we will fully consider subjective and objective factors such as the market and weather and further optimize flight schedules, to effectively reduce the inconvenience caused to passengers by flight cancellations and delays.

Second, we will ensure epidemic prevention and control, guide passenger flow, reduce passenger gatherings, and try our best to provide non-contact services to passengers. We have tested and monitored the health conditions of front-line employees, and cleaned, disinfected and ventilated key places to reduce infection risks for passengers, so as to ensure safe and sound trips for them.

Third, we will ensure all aspects of service are properly attended to both onboard and on the ground. Specific focus will be given to passengers with special needs, including those with disabilities, the elderly, and unaccompanied children, in order to create a civilized, warm and harmonious travel environment.

Fourth, we will increase the answering rate of customer service calls by taking measures like increasing hotlines and service personnel to promptly handle passengers' various service demands. Thank you.

China Transport News:

Railways play an important role in the Spring Festival travel rush every year. What new measures will the railway authorities adopt this year? Thank you.

Huang Xin:

Thank you for your question. As regards this year's travel rush, China Railway will conscientiously implement the relevant deployments and requirements of the CPC Central Committee and the State Council on the work of the Spring Festival travel rush, continue to adhere to the people-centered development philosophy, take better-coordinated steps to respond to COVID-19 and the travel rush, and better coordinate development and security. We will optimize the train operation plan for the Spring Festival travel peak season, and accurately implement the epidemic prevention and control measures. On the basis of reviewing good practices from the past, we will launch a series of measures to help people in different links of purchasing tickets, waiting and boarding, so as to ensure safe, orderly and warm Spring Festival travels, and provide passengers with a better travel experience.

In terms of capacity arrangement, we will make scientific and precise arrangements. We will coordinate and make good use of new lines and new stations opened last year, as well as newly operated advanced equipment such as Fuxing bullet trains, to enhance the overall function of the rail network and improve passenger capacity. Following the principles of "sufficient arrangements, on-demand start, quick response and emergency preparedness," we will scientifically arrange the train operation schedule.

In terms of orderly travel, it is necessary to create a healthy and safe travel environment for passengers. We will conscientiously implement various measures for COVID-19 prevention and control and security management, strengthen the organization of passenger flows at stations, strictly control the occupancy rate of trains, and guide passengers to enter stations and wait for trains in an orderly manner, and maintain a safe distance. We will strengthen ventilation and disinfection in key places to maintain a good environment in trains and stations, actively promote contactless services, strengthen the promotion of travel health tips, improve employee health management, and guide passengers to wear masks throughout the entirety of their journeys to enhance their own health protection.

In terms of station and train services, we will focus on introducing measures to improve convenience for passengers in three aspects. First, we will improve ticket purchasing services. We will further optimize the 12306 online ticket purchasing system, expand the application of electronic tickets, and fully implement digital management in the links of excess fare payment at stations and trains. Second, we will no longer set time requirements for student discount tickets. Students can purchase four one-way discount tickets at any time in each school year, which are convenient for them to use at any time throughout the year. Third, if a passenger refunds a ticket due to railway liability or force majeure, all connecting tickets can be refunded at the same time, and the refund fee will be waived. Passengers will no longer be charged a service fee for excess fares or changing tickets. Meanwhile, we will expand the scope of trains with discounted fares in the non-peak direction.

Regarding travel information services, we will introduce code scanning services on more than 3,200 high-speed trains. Passengers can scan the code on their armrest to check travel service information related to arrival and departure time, train locations, trains available for transfer, and transportation of other vehicles. They can also buy food and beverages, pay for ticket extensions, upgrade their seats and search for lost belongings. Meanwhile, we will improve the message notification mechanism of 12306 to ensure that passengers who have booked tickets via 12306 and logged accurate contact information receive updates about the suspension of trains and information changes. This will enable them to get up-to-date information about train operations and make better travel arrangements. 

In terms of transfer services, passengers are particularly concerned about transfer information during the Spring Festival travel rush. The number of stations where intra-station transfers are available has increased from 80 to 100. We will also improve service facilities and upgrade signposts to improve transfer efficiency and provide convenience for passengers during the Spring Festival travel rush. Thank you. 

China Daily:

We noticed that delivery delays and congestion occurred in many places some time ago. What measures has the State Post Bureau taken to respond to this and what is the specific situation like now? Thank you. 

Chen Kai:

Thank you for your questions. As you mentioned in your questions, couriers in some cities have been getting infected since mid-December last year. Some distribution centers and outlets could not operate normally due to labor shortages, which affected parcel handling and delivery. At the same time, due to the decline in circulation efficiency, the delivery efficiency of some outlets and related terminals was affected, resulting in partial backlogs. As we all know, the courier sector is a typical network economy. If one link is affected, it will spread to the whole network. We noticed that delivery was slow some time ago. In response to this, the State Post Bureau has paid close attention, made all-out efforts to remove obstacles in the postal and courier sector and focused on daily scheduling, careful deployment and smoothing terminal circulation to ensure the efficient operation of the postal express network. We have done our work in the following four aspects:

First, we strengthened network operation guarantees. We urged delivery firms to assume their social responsibility, asking them to minimize service interruptions caused by out-of-service outlets and minimize operational disruption due to the reduced efficiency of front-end collection to ensure the smooth running of the postal express network to the greatest extent. Delivery enterprises have also formulated work programs and emergency plans according to epidemic developments specific to different regions and stages to allocate staff scientifically and ensure the regular operation of staff on duty to the maximum extent. 

Second, we ramped up efforts to replenish the workforce. We guided delivery enterprises to ensure consignment in key areas, in key links, and of essential materials. They increased employee attendance and strove to maintain the service capacity through regional adjustment, temporary reassignment of management personnel, recruitment of temporary workers, and speeding up the return to work. 

Third, we ensured the health and safety of delivery workers. We have guided local postal administrations to actively seek resources from local governments to provide greater support to the industry in terms of vaccines, antigen test kits, medicines, and N95 masks. We've also instructed them to speed up distribution to ensure the effective protection of frontline express delivery workers. Localities like Shanghai and Jiangsu have offered subsidies to those on duty on the frontline.

Fourth, we accelerated the handling of backlogged packages. We have urged relevant companies to improve resource allocation, coordinate personnel, and speed up the handling of backlogs, while making sound preparations for potential package increases. We have guided company headquarters to formulate incentive policies to support terminal outlets in speeding up package flow. We have also encouraged terminal outlets to increase working capacity and effectively handle backlogged packages. These policies include increasing working efficiency, optimizing delivery routes, extending service time, and offering delivery services during night hours.

We have seen that, through continuous efforts in the previous stage, 94.9% of delivery workers nationwide had resumed work as of yesterday, the number of backlogged packages had sharply dropped, and express delivery services had effectively resumed. In the first five days of this year, the daily express delivery volume reached 370 million packages on average, up 16.7% compared with the same period last year. Going forward, the State Post Bureau will continue to mobilize the whole industry to consolidate work achievements and strengthen the foundation for stable industrial operation, do its best to ensure smooth delivery, and effectively meet the needs of the people for delivery services.

We will further urge relevant enterprises to increase their package handling efficiency according to the changing epidemic situation in different regions, and urge companies to increase their efforts to properly handle complaints and appeals and effectively resolve related problems and disputes, so as to meet the people's needs for delivery services. Thank you.

Phoenix TV:

My question is for the Civil Aviation Administration. What are the arrangements for flights to and from Hong Kong, Macao and Taiwan during the Spring Festival travel rush? Is there going to be a significant increase? Thank you.

Wan Xiangdong:

Thank you for your questions. The Civil Aviation Administration has always cared for air routes to and from Hong Kong and Macao as well as cross-Strait flights and supported airlines in opening air routes and flights to Hong Kong, Macao and Taiwan in accordance with the air transport arrangement between the mainland and Hong Kong and Macao as well as the cross-Strait air transport agreement.

In 2022, the Civil Aviation Administration issued or renewed 16 Hong Kong air operating licenses and three Macao air operating licenses. As of Jan. 5, the Civil Aviation Administration had approved a plan for 13,230 passenger flights to and from Hong Kong, Macao and Taiwan during the Spring Festival travel rush, involving 186 air routes and 47 waypoints on the mainland. Twenty-eight airlines will arrange 2,331 passenger flights every week.

After Jan. 8, airlines will independently and dynamically optimize the arrangement for passenger flights to and from Hong Kong, Macao and Taiwan based on the same principles as international ones — safety first, market-oriented, and special needs prioritized. Take Shanghai Pudong International Airport as an example. According to the flight scheduling of various airlines operating at the airport, from Jan. 8 to 31, there will be 30 daily passenger flights to and from Hong Kong, Macao and Taiwan taking off or landing at the airport. Among them, 10 are Hong Kong flights, eight are Taiwan flights, and 12 are Macao flights, all showing a significant increase. As market demand increases over time, we believe the number of flights will increase further. Thank you.

Cover News:

It is expected that this year will see an increase in passenger flows compared to previous years. How will the transport authorities ensure the safety of passengers and guarantee emergency responses to avoid major traffic accidents? Thank you.

Cai Tuanjie:

Thank you for your question. Safety has always been our top priority during the Spring Festival travel rush. We can have a peaceful Spring Festival only if we do an excellent job of providing security. This year, we face significant challenges in conducting safety inspections for the travel rush due to multiple factors, including increasing passenger and cargo flows, the changing epidemic situation and extreme weather. We have already made systematic arrangements for ensuring safety and emergency responses for the travel rush. Next, we will guide local governments to pay close attention to passenger and cargo flows, the weather and the epidemic situation. We will also direct them to focus on core elements such as passengers, vehicles and roads. Multiple efforts will be made to guide local governments to take concrete steps to fully secure a safe Spring Festival travel season. 

First, we will strengthen the inspection and maintenance of facilities and equipment. Some of our facilities and equipment have been operating at low capacity, leading to an increased risk of safety hazards. We will urge transportation companies to fully implement all safety production requirements and conduct comprehensive inspection and maintenance on facilities and equipment planned to be used during the Spring Festival travel season, to ensure they are in good technical condition. We will prevent problematic facilities and equipment from operating.

Second, we will strengthen our efforts to raise safety awareness among employees. Some of our employees' skills have become rusty due to the low workload. We will guide transportation companies to conduct targeted training and safety education for all employees engaged in the Spring Festival travel season, especially drivers, to enhance their awareness of safe driving. We must conduct strict checks on drivers to ensure they can perform their work duties safely. If drivers have symptoms such as a fever or are unable to work due to physical conditions, they should not be made to work. We should ensure that employees are fit for duty and that vehicles are fit for operation.

Third, we will strengthen the dynamic monitoring of transportation vehicles. We will monitor and manage tourist buses, passenger buses, vehicles transporting dangerous goods, and high-speed ferries during their operation, and promptly discover and address violations of laws and regulations, including speeding and driving while tired. We will urge transportation companies to pay close attention to weather changes and road traffic conditions, and promptly adjust or suspend transportation plans for those not meeting safe traffic requirements. We strictly prohibit dangerous operations and transportation.

Fourth, we will strengthen efforts to ensure safety on the road network. We will guide local governments to strengthen the monitoring of key road sections and road networks and conduct risk assessments on road sections such as large and long bridges and tunnels, as well as long, continuous downhill slopes, to address safety hazards in a timely manner. We will release information on weather and traffic control to facilitate the public in making travel plans. Suppose there are extreme weather events, such as cold waves, freezing rain and snow, and dense fog. In that case, we will publish weather warnings and conduct emergency responses, as well as carry out snow removal and deicing work in a timely manner, to recover road conditions as soon as possible. We will step up efforts to provide health services for passengers. We encourage passenger hubs, highway service areas, "driver's homes," and other places where conditions permit to set up "health stations" and health service points to provide drivers and passengers of private cars, passenger buses and cargo trucks with medicine and separate areas for rest. It is particularly important to mention that we do not encourage drivers with symptoms to get behind the wheel. If they have symptoms during their work, they need to rest and get medicine at the nearest service area. It is also advisable to avoid driving after taking medication and only return to work after resting to ensure safety.

Fifth, we will step up our duties and emergency response capabilities. During the Spring Festival travel rush, transportation departments at all levels will strictly implement the 24-hour duty plan with both leaders and assigned persons on duty to closely monitor the situation of the travel rush. In case of emergencies like adverse weather and traffic congestion, we will organize, coordinate and direct the emergency response in time to ensure smooth and orderly progress during the Spring Festival travel season. When people are stranded, hot water, food and necessary health services will be provided in time to enhance their sense of fulfillment regarding Spring Festival travel services.

During the Spring Festival travel season, many people from rural areas travel to return home, visit relatives and friends, and go to fairs. We will strengthen transport capacity and safety supervision. We will work with related departments to strengthen law enforcement supervision by focusing on rural passenger transport routes, passenger terminals and ferry ports. Here, I'd like to remind travelers to enhance their awareness of self-protection and safe travel. It is suggested to travel in legal vehicles, reject vehicles with passengers beyond the seating capacity, fasten seat belts, resolutely eliminate driving a vehicle without a license plate or driver's license, and avoid drunk driving to prevent and curb safety accidents.

Safety work is a journey to which there's no end. Let's work together to ensure a safe, smooth and orderly Spring Festival travel season so everyone can have a happy and peaceful Spring Festival. Thank you!

Hong Kong Bauhinia Magazine:

What progress has been made to ensure a smooth flow of logistics during the Spring Festival travel season? What efforts will be made to ensure efficient and orderly transportation of medical and livelihood supplies? Thank you.

Xu Chengguang:

Thanks for your questions. I will answer them.

For this year's Spring Festival travel rush, we have made full preparations for organizing the passenger transport and ensuring the smooth flow of transport and logistics, which will be coordinated and managed respectively by the Spring Festival travel season work team under the State Council inter-agency task force for COVID-19 response and the office of the leading group for the smooth flow of logistics under the State Council. In terms of transport and logistics, transportation arteries and logistics microcirculation in China are generally smooth. Key logistics hubs are running steadily. Major logistics indicators are stable and improving. The transportation of key supplies is safe and orderly. We are fully capable of meeting the transportation needs of supplies.

But at the same time, the public demand for medical supplies such as COVID-19 medicines, antigen detection reagents, masks and vaccines has surged recently. Given this situation, the office of the leading group for the smooth flow of logistics under the State Council, which considers it a priority, is strengthening overall deployment and coordination and sparing no effort to ensure the smooth transportation of medical supplies.

First, we need to connect supply and demand to ensure a timely response to demand. We will track the epidemic changes, monitor the transportation needs of key medical supplies across the country, and urge and guide local transport authorities to contact the 286 key enterprises ensuring medical supplies designated by the medical supplies group under the State Council inter-agency task force for COVID-19 response, taking the initiative to provide them with the needed services and make differentiated policies. For example, we have guided SF Express Group and China Post Group to customize their logistics plans to guarantee the daily transportation of 16,000 orders of Lianhua Qingwen capsules produced by Shijiazhuang Yiling Pharmaceutical, achieving "zero backlogs" in medical transportation and distribution. We have also promptly coordinated and solved the transportation problems of medical supplies for Fengyuan Pharmaceutical in Anhui and Fenhe Pharmaceutical in Shanxi.

The second is to ensure efficient traffic and smooth and orderly logistics. The transportation of medical materials requires a higher level of timeliness and precision than that of general materials. We have set up a daily scheduling system to enhance dispatching in key provinces and key logistics enterprises, ensuring the timely delivery of medical supplies. We will strictly implement the policy of giving priority to free passage on expressways for vehicles transporting COVID-19 vaccines to ensure safe and efficient deliveries.

The third is to smooth the end circulation to ensure timely delivery of materials. In some cities, a shortage of front-line couriers has caused poor delivery at the end of logistics. We have solved such problems as quickly as we can. We immediately carried out dispatch and deployment, urged timely recruitment of delivery personnel, encouraged businesses to open as many outlets as possible, prioritized the delivery of backlogged medical and prevention and control supplies, and worked hard to smooth the final delivery of medical materials.

Next, we will continue to focus on the transportation needs of medical supplies, promote the connection between supply and demand, ensure efficient passage, smooth the final delivery stage, and ensure efficient and orderly transportation of key materials. First, we will make every effort to meet the demands of transporting medical materials. We will guide key logistics enterprises to strengthen coordination with medical supplies production, operation and distribution enterprises to ensure timely and full response to transportation needs for medical supplies. Second, we will strengthen the transportation organization and capacity scheduling. We will guide large key logistics and transportation enterprises to formulate support plans for transporting medical supplies during the Spring Festival holiday, and encourage front-line employees to continue to work during the holiday by arranging staff rotation and off-peak leave, and issuing subsidies, overtime pay and other measures, so as to ensure that the transportation of medical materials is not interrupted during the holiday. Third, we will make every effort to smooth the final delivery service network. We will give full play to the role of large key postal express enterprises, and guide them to improve their contingency plans during the holiday. We will strengthen regional labor deployment, and pay close attention to the staffing of employees in small and medium-sized cities and rural areas. With these efforts, we will ensure the uninterrupted transportation of medical supplies during the Spring Festival travel rush.

Transportation and logistics are linked to people's livelihoods and are related to the overall stability of growth, employment and prices. While ensuring transportation services for key medical supplies, we will also continue to ensure the smooth flow of the "main artery" and "microcirculation." We will coordinate the transportation of key materials like energy and grain, and daily necessities like vegetables, fruit, meat, poultry, eggs and milk this winter and spring, so as to better serve the overall situation of economic and social development and ensure people's living needs and a warm winter.

Here, I would again like to remind drivers that if they encounter any obstacles during transportation, or if relevant supply enterprises face difficulties in logistics and transportation, they are welcome to call the local or national hotlines. We will coordinate services to see that their difficulties are addressed.

The Beijing News:

This year, some newly built railways will face the big test of the Spring Festival travel rush. What preparations have railway departments made? Can China's current railway capacity meet the demands of the Spring Festival travel rush this year? Thank you.

Huang Xin:

Thank you for your questions. This year's Spring Festival travel rush is the first after the central government optimized and adjusted the pandemic prevention policies, as pandemic prevention and control entered a new stage. Therefore, the population's travel demands may change significantly compared to previous years. The pre-sale of train tickets for the 2023 Spring Festival period started on Dec. 24, 2022. Looking at current ticket bookings, we have seen that travel demand in all aspects has increased significantly, and railway passenger flows are gradually recovering.

To properly ensure capacity for the Spring Festival travel rush, I mentioned earlier that we adhere to the principles of "adequate arrangement, on-demand activation, rapid response, and emergency preparedness," and the train operating plan has been arranged accordingly for the holiday travel rush. A daily maximum of 6,077 pairs of passenger trains will be put into operation during peak days before the holiday, with a seating capacity of 9.04 million passengers. Moreover, there will be a maximum of 6,107 pairs of trains per day after the holiday, with a seating capacity of 9.14 million people. Maximum seating capacity has increased by 11% compared with the same period in 2019, enabling us to better meet the travel demands of passengers during the Spring Festival travel rush. Regarding transportation capacity, we have prepared in three ways.

First, we will make good use of new lines, stations and equipment. Last year, 4,100 kilometers of new railway lines were put into operation nationwide, including 2,082 kilometers of high-speed railway. The accessibility and coverage of the railway network were further improved. During the Spring Festival travel rush, we will give full play to the advantages of our high-speed railway network. We will effectively use new lines and stations such as the Zhengzhou-Chongqing High-speed Railway, the Huzhou-Hangzhou High-speed Railway, the Yinchuan-Lanzhou High-speed Railway, the Beijing-Tangshan Intercity Railway, the new Chengdu-Kunming Railway, and Beijing Fengtai Railway Station, and advanced equipment such as the new Fuxing EMU trains. We will also make effective use of the 350-kilometer-per-hour speed achieved by the Beijing-Wuhan section of the Beijing-Guangzhou High-Speed Railway, enabling us to enhance efficiency and improve capacity for the Spring Festival travel rush.

Second, we will expand transportation capacity in key regions and times. Before the festival, 1,623.5 pairs of direct passenger trains will run daily in the areas with concentrated passenger flows, including Beijing, the Shanghai-Nanjing-Hangzhou region, and the Guangzhou-Shenzhen region, a year-on-year increase of 34.5 pairs. Meanwhile, 222 pairs of high-speed trains will run every night, a year-on-year increase of 25 pairs. After the holiday, 814.5 pairs of direct passenger trains will run daily in the cities of Chengdu, Chongqing, Wuhan and Nanchang, and Hunan province and other areas with concentrated passenger flows, a year-on-year increase of 18 pairs. Moreover, 135 pairs of high-speed trains will run each night, a year-on-year increase of 14 pairs. At the same time, we will maintain the necessary operation scale of normal-speed passenger trains, continue to run slow trains for public welfare, and ensure the travel needs of people in remote areas.

Third, we will establish an emergency response mechanism for unexpected passenger flows. We will analyze the patterns of passenger travel, study and assess the changing trend of passenger flows, adjust transport capacity at different stages, and achieve a good balance between transport capacity and demand according to pre-sale and waiting list data from ticket reservation website 12306.cn. According to current ticket bookings, before the festival, the transportation capacity are relatively short for those traveling from the Pearl River Delta and the Yangtze River Delta to the central and southwest regions. Therefore, we will adjust and supplement transportation capacity to meet the travel needs of passengers as much as possible. In order to cope with unexpected passenger flows, a certain number of EMUs and crew members will be on standby in major railway hubs for immediate deployment, ensuring we meet the travel demands of passengers. Thank you.

Beijing Youth Daily:

Just now, the State Post Bureau discussed the slowdown in express delivery services and the backlog of parcels that occurred a while ago. The Spring Festival is the peak season for people to return to their hometowns and travel; it is also the offseason for the courier industry. Can you judge whether there will be a shortage of couriers and a slowdown in express delivery services in the next stage? Are there any solutions? Thank you.

Chen Kai:

Thank you for your questions. During the Spring Festival, as many people return to their hometowns to celebrate the Lunar New Year or travel, people's need for express delivery services will significantly decline. According to the data of the past two years, the average business volume per day in the seven days of Spring Festivals accounts for about 15% of the average daily business volume of whole year in 2021 and 2022. It can be said that the Spring Festival is the offseason for the courier industry. Despite that, we hold that currently, it is a critical period for the optimization of epidemic prevention and control, and people are still in urgent need of delivery of medicines and materials for epidemic prevention and control and basic living. Therefore, for some time to come, especially during the Spring Festival, ensuring delivery services is of great significance for better coordination between epidemic prevention and control and serving economic and social development in the new situation. Taking that into consideration, the State Post Bureau has specifically formulated the work plan for the postal and courier industry on safeguarding delivery services during the 2023 Spring Festival. It has made special arrangements concerning the operation of the industry during the Spring Festival, mainly including the following four aspects:

First, the order of postal delivery services will be maintained. We will effectively play the role of the market and urge postal enterprises to keep providing stable universal postal services. We will guide major brand express delivery enterprises to make reasonable service commitments tailored to the actual delivery needs of different regions, issue the arrangements of services during the Spring Festival in advance, coordinate the transport capacity of the entire network, and arrange a necessary number of outlets and workers to ensure the effective operation of the service network of their brands.

Second, the delivery service for the "Lunar New Year's Shopping Festival" will be guaranteed. This year we will continue to work with the Ministry of Commerce and other departments to organize the Online Lunar New Year's Shopping Festival activity. We will guide the enterprises to make reasonable arrangements for production and operation during the holiday, promptly release the service arrangements to the public, and strictly act upon its announcements and commitments. We will urge enterprises to strengthen communication with upstream e-commerce enterprises to make a well-informed prediction about changes in the needs for services during the Lunar New Year's Shopping Festival and the Spring Festival and make reasonable arrangements for human resources and transport capacity to ensure the enterprises' regular operation.

As I have mentioned, in the first five days of this year, the business volume of express delivery nationwide has reached 1.89 billion pieces, providing support for the online retail sales of physical goods of more than 160 billion yuan. It can be said that the coordination between commodity circulation and express delivery and logistics plays an active role in stabilizing consumption.

Third, the need for delivery of medical supplies, including medicines, will be guaranteed. Together with the Ministry of Commerce, we jointly issued the notice on jointly guaranteeing the supply and delivery of medical supplies, guiding for delivery enterprises to make special marks on medical supplies, strengthen guarantees and give priority to its delivery to meet people's urgent needs for the delivery of medicines and other medical supplies. 

Fourth, practical measures will be taken to safeguard couriers' legitimate rights and interests. I believe you all remember that on Feb. 1, 2019, General Secretary Xi Jinping visited couriers at Shitou Hutong in Qianmen, Beijing. He said affectionately that couriers work really hard, getting up early and returning home late at night, making deliveries in all weathers, and getting even busier at holidays, and working the hardest just like busy bees to bring convenience to our life. We will fully implement the important instructions of General Secretary Xi Jinping and pay visits to couriers during the Spring Festival. We will urge delivery enterprises to coordinate the arrangement of rest and leave for those who work during the holiday and implement off-peak vacations or allow them to take their days off later. Couriers who work during the holiday should enjoy due overtime payments under the relevant laws, and subsidies to enterprises that maintain stable employee numbers will be ensured to guarantee their living.

Based on the current conditions, many enterprises have recently issued their operation plans during the Spring Festival, specifying the commitments of their brands to ensure services during the Spring Festival. We will further urge enterprises to fully implement their commitments and make serious efforts to ensure the quality of delivery services during the Spring Festival. Thank you.

Xing Huina:

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

Nanfang Metropolis Daily:

As the huge human migration involving 2 billion trips approaches, how will China respond to the challenges after having optimized the epidemic control management during the Spring Festival travel rush? What specific measures will be taken? Thank you.

Cai Tuanjie:

Thank you to the reporter. The epidemic prevention and control work plays a crucial role in ensuring transportation services during this year's Spring Festival. During the Spring Festival travel rush, the high flow of people and goods and extensive social activities increases the risk of infection. Based on these conditions and combined with the implementation of the measures adopted by China to treat COVID-19 as a Category B disease, the Spring Festival Transportation Special Group has issued the Guidelines on Epidemic Prevention and Control During the Spring Festival Travel Rush and Guidelines on Travel Services During the Spring Festival Travel Rush. We will guide regions to strengthen whole-chain management according to relevant requirements and documents, urge employees in the transportation industry to carry out effective and detailed implementation of epidemic control measures and guide the public to take personal protection measures, contributing to the effective and steady transition of the epidemic development and ensuring the smooth and orderly operation of transportation services during the Spring Festival. 

First, the organization and guidance of passenger flow will be enhanced. We will urge operators to strengthen disinfection and ventilation of airports and transportation hubs. Passenger flow will be organized in a better way. Passengers will be guided to form lines in key places including entrances, ticket windows, automatic ticket machines, security check lanes, and check-in gates. If conditions allow, passengers will be guided to maintain their distance in waiting rooms and sit apart from each other. Transport capacity will be increased in a timely manner for lines with large passenger flow to reduce gatherings.

Second, education programs will be conducted to raise public awareness of epidemic prevention when traveling. Everyone should be responsible for their own health. Here we would like to recommend that the public reduce travel to regions with high infection rates and people from these regions should also reduce travel and avoid traveling when they have symptoms. People should try not to take public transportation if they have not ruled out the risk of having been infected or when displaying symptoms such as fever. During their journey, passengers should increase their awareness of self-protection and strengthen personal protection throughout the entire trip. When taking public transportation, passengers should wear face masks during the entirety of their trip and try to reduce gathering.

Third, the adoption of contactless services will be encouraged. We will guide passenger transport operators to keep improving ticket services and take active steps to promote the application of services including online purchasing of tickets, e-tickets, and self-service check-in. The range of paperless and contactless services will be expanded. The smooth transition between railway, civil aviation and urban rail transit will be further advanced and the security check process will be optimized, so as to reduce the waiting time for transfers and public gathering and improve passengers' efficiency in transfer.

Fourth, the health management of transportation employees will be strengthened. We will urge operators to strengthen the health monitoring of transportation employees and carry out management of those with symptoms. Those who have symptoms such as fever should promptly report their situation, stop working and take a COVID-19 antigen test or nucleic acid test if necessary. Transportation employees are asked to strengthen self-protection. They should wear face masks during their work and practice good hand hygiene. Meanwhile, for service staff working in transportation hubs and highway service areas with large passenger flow and those working on the frontline in places such as toll booths, we advocate that they commute directly between their home and workplace. They should also wear N95 or KN95 face masks during their work. 

Fifth, epidemic prevention and control measures will be strictly implemented in airports and transportation hubs. We will urge operators to strengthen the daily public hygiene management in relevant airports and transportation hubs, highway service areas, toll booths, and some transportation vehicles. All of these public facilities will go through thorough cleaning and disinfection and ensure good ventilation. In areas where the epidemic situation is serious, the frequency of cleaning, disinfection and ventilation will be increased, and the windows of passenger vehicles will be opened regularly for ventilation. 

Sixth, effective measures will be taken to respond to large-scale infections of transportation employees. We will urge operators to strengthen the management of transportation employees in terms of epidemic control. Drivers will undergo strict and prudential examinations before going to work to ensure that their physical conditions meet the standards for safe driving. Mechanisms for staff rotation and backups in key positions and for cross-regional mobilization of personnel and transport capacity will be established and implemented. We will make preparations in case of the need to respond to large-scale infections of transportation employees, so as to ensure that the replacement of personnel is carried out in an orderly manner and that transportation services are not disrupted. 

We would also like to appeal to all regions to provide care for transportation employees. Highway service areas and service centers for drivers should if possible set up medical service stations, prepare necessary materials for epidemic treatment such as anti-fever drugs and provide necessary places for drivers to rest, so as to ensure that transportation employees can receive timely medical treatment and get the necessary rest when they have symptoms.

Next, we will pay close attention to developments in the epidemic nationwide, make timely adjustments to the relevant policies and supporting measures as circumstances change, and guide regions to take well-coordinated steps to prevent and control the epidemic and provide services for the Spring Festival travel rush. Thank you.

Xing Huina:

Today's briefing is hereby concluded. Any news organization that did not get a chance to raise questions today may contact us after the briefing. Thank you to all the speakers and friends from the media. Goodbye.

Translated and edited by Wang Yiming, Zhang Rui, Xu Xiaoxuan, Li Huiru, Yan Bin, Wang Wei, Yang Xi, Liu Qiang, Cui Can, Zhang Junmian, Duan Yaying, Huang Shan, Xiang Bin, Liu Sitong, Ma Yujia, Xu Kailin, Wang Qian, Zhu Bochen, Zhang Jiaqi, 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)

Ms. Qi Xiaoxia, director general of the International Cooperation Bureau of the CAC

Mr. Yang Shuzhen, director general of the Policy Research Bureau of the CAC

Ms. Sun Weimin, director general of the Cybersecurity Coordination Bureau of the CAC

Mr. Wang Song, director general of the Informatization Development Bureau of the CAC

Mr. Chen Renze, an official of the Cyber Communication Bureau of the CAC

Chairperson:

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

Date:

Nov. 7, 2022

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, the SCIO published a white paper titled "Jointly Build a Community with a Shared Future in Cyberspace," and organized this press conference to introduce and interpret its main content.

The white paper fully implements Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly puts into practice the guiding principles from the 20th National Congress of the Communist Party of China (CPC), and provides a comprehensive picture of the achievements in the development and management of the internet in China since the 18th CPC National Congress. The document elaborates on China's concepts, actions and contributions in strengthening international communication and cooperation in cyberspace and promoting the building of a community with a shared future in cyberspace. It also puts forward China's proposals on creating a community with a shared future in cyberspace.

At around 24,000 Chinese characters, the white paper consists of preface, main body and conclusion. The main body is divided into four parts: "Building a Community with a Shared Future in Cyberspace Is Essential in the Information Age," "Development and Management of the Internet in China," "China's Contribution to Building a Community with a Shared Future in Cyberspace" and "China's Proposals on Creating a Community with a Shared Future in Cyberspace."

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 Bookstore outlets across the country.

To help you better understand the white paper, we have invited Ms. Cao Shumin, vice minister of the Cyberspace Administration of China (CAC); Ms. Qi Xiaoxia, director general of the International Cooperation Bureau of the CAC; Mr. Yang Shuzhen, director general of the Policy Research Bureau of the CAC; Ms. Sun Weimin, director general of the Cybersecurity Coordination Bureau of the CAC; Mr. Wang Song, director general of the Informatization Development Bureau of the CAC; and Mr. Chen Renze, an official of the Cyber Communication Bureau of the CAC. They will brief you on relevant information and then take your questions.

Now, I'll give the floor to Ms. Cao Shumin.

Cao Shumin:

Thank you, Ms. Xing. Ladies and gentlemen, friends from the media, good morning. It is my pleasure to brief you on the white paper "Jointly Build a Community with a Shared Future in Cyberspace."

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has proactively conformed to the development trends of the information revolution, attached great importance to the internet, and engaged in development and governance of the internet. It has promoted coordinated progress in the development of cybersecurity and information technology (IT) and contributed to the historic achievements and changes in the sectors in China. In December 2015 during the second World Internet Conference (WIC), General Secretary Xi Jinping proposed the building of "a community with a shared future in cyberspace." The proposal expressed China's sincere wish to cooperate with the rest of the world in promoting the development of management of the internet. It also offered Chinese solutions and contributed Chinese wisdom to the sector.

Next, I will brief you on the main content of the white paper from four aspects.

First, building a community with a shared future in cyberspace is essential in the information age.

The world is currently undergoing accelerating changes unseen in a century. The new scientific and technological revolution and industrial transformation are gaining momentum. Problems with the internet such as unbalanced development, unsound regulation and unreasonable order are becoming more prominent, and cyber-hegemonism poses a new threat to world peace and development. Cyberspace governance requires more just, reasonable and effective solutions, and global threats and challenges necessitate joint efforts from around the world.

General Secretary Xi Jinping's important concept of building a community with a shared future in cyberspace has elaborated on a series of major principles and proposals for global internet development and governance. It comprises four principles: respecting cyber sovereignty, safeguarding peace and security, promoting openness and cooperation, and maintaining good order. It also noted that we should hold to a vision of extensive consultation, joint contribution and shared benefits in global governance; we should contribute to building a peaceful, secure, open, cooperative and orderly cyberspace; and we should build cyberspace into a community of common development and shared security, responsibility and interests.

The second aspect is the development and management of the internet in China.

The development and management of the internet in China has provided strong support for the nation's high-quality growth. This is summarized in the white paper from seven aspects.

First, the digital economy is thriving. By 2021, the value of the digital economy had reached 45.5 trillion yuan, accounting for 39.8% of GDP, and has become a major engine of growth for the nation's economy. Second, digital technologies have brought benefits and convenience to the people. China has proactively promoted internet application in public service sectors such as education and medical services, and fully leveraged the key role of the internet in promoting poverty alleviation and rural revitalization. Third, the legal framework for cyberspace continues to improve. China has established a complete cyber law system and enforced a number of laws such as the Cybersecurity Law, Data Security Law and Personal Information Protection Law. This has boosted the sound development of the internet within the bounds of the law. Fourth, China has developed rich and varied online content. Positive and mainstream ideas and opinions are spreading online. Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era has taken root in the hearts of the people, and the core socialist values are guiding the cultural development online. Fifth, the cyberspace is getting cleaner. We have launched Operation "Qinglang," promoted internet civilization and pooled positive energy. As a result, China's cyber ecosystem continues to improve. Sixth, the operation of online platforms continues to become more standardized. We have worked to improve the institutional arrangements and mechanisms which help enterprises to develop and regulate their operation. We are also stepping up regulation related to new technologies and applications, advancing the self-discipline of industry, and working to promote fair competition and orderly development on social media platforms. Seventh, China has effectively guaranteed cybersecurity. China has strengthened top-level design on cybersecurity and intensified efforts to protect critical information infrastructure. China has also enhanced its ability to ensure digital security, strengthened personal information protection and strived to crack down on cybercrimes.

The third aspect is China's contribution to building a community with a shared future in cyberspace.

Over the years, China has continued to strengthen dialogue and cooperation in cyberspace. The white paper elaborated on this topic from four aspects.

Regarding cooperation on the digital economy, China has been working to promote the construction of information infrastructure. China proactively participates in cooperation on the digital economy under multilateral frameworks such as the Group of 20 (G20), Asia-Pacific Economic Cooperation (APEC) and BRICS, and contributes to the development of the digital economy globally. Regarding cybersecurity cooperation, China has been working with the international community to increase cooperation in data security and personal information protection and jointly combat cybercrime and cyberterrorism. The National Computer Network Emergency Response Technical Team (CNCERT) has established partnerships with 274 computer emergency response teams (CERTs) from 81 countries and regions. Regarding the governance of cyberspace, China has proactively carried out bilateral and multilateral dialogue and cooperation in cyberspace, and worked to promote the reform and development of the global internet governance system. Global exchange platforms such as the WIC Wuzhen Summit have been developed, and the WIC was established as an international organization in July this year. Here, I would also like to announce that the 2022 WIC Wuzhen Summit will officially kick off on Nov. 9. We look forward to your participation and hope you follow its updates. Regarding promoting inclusive global development, China has been proactively carrying out international cooperation in poverty alleviation through internet access, promoting online cultural exchange and mutual learning among civilizations, and working to provide benefits to people around the world with the achievements in internet development.

At last, about China's vision of the future development of the internet. The white paper illustrated China's proposal to create a closer community with a shared future in cyberspace regarding cyberspace development, governance, security and cooperation.

The 20th CPC National Congress has pointed out the direction for building strength in cyberspace, digital technologies, and international cooperation. Guided by the concept of building a community with a shared future in cyberspace, China will cooperate with the international community to promote the development of an open, inclusive, and vibrant cyberspace that is fairer, more rational, and secure and stable, to ensure that the internet will bring more benefits to people of all countries.

Next, my colleagues and I are very willing to answer your questions.

Xing Huina:

Okay, now you can ask questions. Please identify the media outlet you represent before raising a question. 

CCTV:

As mentioned in the white paper just now, China has been deepening international exchanges and cooperation in cyberspace in recent years, contributing to the building of a community with a shared future in cyberspace. What are the features of international exchanges and cooperation in cyberspace in the new era?

Cao Shumin:

Thanks for your question. I will take this question. When introducing the main contents of the white paper just now, I mentioned that in recent years, China has followed the guidance of the concept of building a community with a shared future in cyberspace and carried out international exchanges and cooperation concerning cyberspace, continuously achieving positive outcomes. To sum up, the international exchanges and cooperation have several features as follows.

First, we have been committed to a people-centered approach. China is the world's largest developing country and the country with the largest number of internet users at 1.05 billion. We have upheld the people-centered development philosophy and worked to promote the development of the internet. We have tried to align its development with the laws of development in the information age and ensure its development more live up to the needs and expectations of the people to make the internet more beneficial to people throughout the world.

Second, we have been committed to openness and cooperation. General Secretary Xi Jinping has stressed that openness is a major driving force for the progress of human civilization and is essential for the development and prosperity of the world. In recent years, we have been committed to openness and cooperation, upheld multilateralism, and actively built bilateral, regional, and international platforms for collaboration. We have promoted pragmatic cooperation with many countries in cybersecurity and IT to the shared expectation of the international community for deepening dialogue and cooperation in this field.

Third, we have been committed to mutual benefit and win-win outcomes. We have been practicing the idea of mutual benefit and win-win outcomes, opposing a zero-sum game and striving to make sure the achievements of internet development and governance are shared by all countries. The outcomes of exchanges and cooperation in cyberspace between China and other countries have been achieved in a host of pragmatic cooperation projects such as bridging the digital divide, facilitating the growth of the digital economy, and promoting poverty reduction, which has enhanced people-to-people connectivity and common development. 

Fourth, we have been committed to equality. It has been China's consistent view that all countries, big or small, strong or weak, rich or poor, are entitled to equal participation in developing a global order and international rules. The future development of cyberspace should be decided by people of all countries, who should work together to create an international environment conducive to development and foster new drivers for global growth. We firmly oppose acts of bullying, the erection of walls and barriers, and any attempts to decouple and disrupt industrial and supply chains. We reject unilateralism and maximum-pressure tactics. We uphold mutual respect, seek common ground while setting aside differences, and advocate the idea that international affairs should be discussed by all involved.

Fifth, we have been committed to maintaining peace and security. We oppose the so-called absolute security for some at the expense of the interests of others and any form of arms race in cyberspace. We support jointly fighting cybercrime and cyberterrorism, oppose network eavesdropping and cyberattacks, and strengthen international cooperation on personal information protection. We have actively carried out dialogue and cooperation in cybersecurity in order to reject the Cold War mentality, uphold peace through collaboration and seek our own security through common security.

Six, we have been committed to promoting fairness and justice. Cyberspace is globally interconnected, so no country can effectively govern it alone. We have been committed to promoting governments, international organizations, enterprises, and think tanks to work together to improve dialogue and consultation mechanisms in cyberspace so that the global internet governance system can become fairer and more rational and reflect the aspirations and interests of the majority of countries in a more balanced way. Thank you.

Phoenix Satellite Television:

At the end of April this year, the U.S. government launched the Declaration for the Future of the Internet. Today, the Chinese government issued the white paper titled "Jointly Build a Community of Shared Future in Cyberspace." What's the relationship between the proposal of the Chinese government and the declaration by the U.S. government? What are the differences? Thank you.

Cao Shuming:

Thank you for your question. This question has attracted much attention from the public. Ms. Qi Xiaoxia, director general of the International Cooperation Bureau of the Cyberspace Administration of China, will answer this question. 

Qi Xiaoxia:

I'm happy to answer the reporter's question from Phoenix Satellite Television. It should be said that the white paper is fundamentally different from the so-called Declaration for the Future of the Internet. As you mentioned, a certain country launched the so-called "Declaration for the Future of the Internet" in April, trying to impose its own standards on others, drawing ideological lines in cyberspace, forming an exclusive clique to instigate division and confrontation, and violating international rules. These acts have seriously broken the solidarity of the big family of the internet and severely affected the stable development of the global internet. 

As you can see, the white paper put forward "China's proposals on creating an even stronger community with a shared future in cyberspace." What we advocate is openness, cooperation, inclusiveness, and mutual learning, and what we uphold is that cyberspace is the shared home of all of humanity and the future of cyberspace should be decided by all countries in the world, rather than by one single country or several countries.

In international cyberspace governance, we champion leveraging the role of the United Nations as the main channel. We also advocate that the international community should commit itself to extensive consultation, joint construction and shared benefits, strengthen cooperation, and jointly formulate international rules in cyberspace. 

We are willing to deepen cooperation with other countries in the world, jointly promote the reform and development of the global internet governance system, and work together to build a stronger community with a shared future in cyberspace. Thank you!

Tianmu News:

I noticed a paragraph on page 27 in the white paper that says, "China actively facilitates the digital industry and industry digitalization and calls for joint efforts to coordinate the transformation towards digitalization and green growth." Please share with us China's specific considerations in this regard. Thank you.

Cao Shumin:

Thank you for your question. Mr. Wang Song will answer it.

Wang Song:

Thank you for your interest in digitalization and green growth. The report to the 20th CPC National Congress proposed "moving faster to boost China's strength in cyberspace and digital development" and called for "accelerating the transition to a model of green development, boosting green and low-carbon industries, and promoting green and low-carbon ways of production and life."

At present, digitalization and green growth are not only important themes for global development but also twins that are interdependent and mutually reinforcing. For one thing, the energy consumption of the digital industry is growing rapidly. For example, the total power consumption of data centers in China currently accounts for about 1.5% of the country's total, posing an urgent need for green transformation and development. For another thing, digital technology has played an increasingly prominent role in driving the green transition of traditional industries. It is predicted that by 2030, various industries can cut 12.1 billion tons of carbon emissions by dint of digital technology.

In recent years, China has organized and implemented the action plan on coordinated transformation towards digitalization and green growth, whose main tasks include three respects. The first is to promote the green and low-carbon development of the digital industry. The second is to accelerate the green transformation of traditional industries enabled by digital technology. The third is to leverage the role of green transition of industries in driving the digital industry. Eighteen key actions have been deployed centering on the tasks in the above-mentioned three respects.

With the joint efforts of various departments and regions, preliminary progress has been made to coordinate transformation towards digitalization and green growth. For example, the current energy consumption per 5G base station has declined by more than 20% compared with that for initial commercial use in 2019, and the average power usage efficiency (PUE) of planned data centers above large scale nationwide has dropped below 1.3. Large domestic digital technology companies have responded to calls nationwide and have taken the lead in formulating low-carbon development plans.

Next, we will further promote the action plan on coordinated transformation towards digitalization and green growth and focus on the following three tasks. The first is to organize and conduct comprehensive pilot programs in this regard and encourage regions with suitable conditions to carry out pilot trials. The second is to promote typical cases and experiences of digital technology enterprises in coordinating transformation towards digitalization and green growth and let these enterprises play an exemplary role. The third is to strengthen relevant international cooperation and promote the expansion of exchanges and sharing of experience under bilateral and multilateral cooperation mechanisms. Thank you.

The Paper:

Since the 18th CPC National Congress, General Secretary Xi Jinping has put forward the concept of building a community with a shared future in cyberspace. Could you talk about your understanding and perception of the concept? Thank you.

Cao Shumin:

Thanks for your question. The concept of building a community with a shared future in cyberspace proposed by General Secretary Xi Jinping is rich in content. I'd like to invite Mr. Yang Shuzhen to answer this question.

Yang Shuzhen:

The question you raised is very important, and I'm happy to take it.

At the second World Internet Conference held in December 2015, President Xi Jinping delivered a keynote speech, and for the first time, clearly put forward the concept of "building a community with a shared future in cyberspace." Since then, he has made in-depth interpretations of the concept on many occasions. This continuously enriched concept has an increasingly bigger influence, which has become a consensus of the international community. By studying and comprehending, I feel that this important concept can be summed up in "four sentences":

First, it is an important thought that keeps up with the changing world. The world is currently undergoing profound changes unseen in a century. On the one hand, the historical trends of peace, development, cooperation, and mutual benefit are unstoppable. On the other hand, as hegemonic, high-handed, and bullying acts have caused serious harm to the world, the international community is facing unprecedented challenges, and the world is once again reaching a crossroads in history. General Secretary Xi Jinping, with insight into the changes in the world, the times, and the history, has clearly put forward the major concept and proposition of building a human community with a shared future. Building a community with a shared future in cyberspace is an important part of building a human community with a shared future and an important part of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, especially the important thought of the general secretary on boosting China's strength in cyberspace. It provides a guideline for the international community to cope with the changes and new challenges and jointly build a community with a shared future in cyberspace. 

Second, it is a strategic goal that responds to the call of the times. At present, the new round of technological revolution represented by IT is changing with each passing day. The internet has turned the world into a "global village," and the international community has increasingly become a community with a shared future where our interests are closely intertwined. With a view of the changes in the information era, General Secretary Xi Jinping clearly put forward the strategic goals of building a community with a shared future in cyberspace where we can jointly advance development, safeguard security, participate in governance, and share the benefits. He called on efforts to build the cyberspace into a community with shared development, security, responsibilities, and interests that benefits all humanity, specifying the strategic goals for building a community with a shared future in cyberspace.

Third, it is the basic principle of solving practical problems. The internet has vigorously promoted the progress of human civilization, but it has also brought a series of new threats and challenges to the sovereignty, security, and development interests of all countries. Cyberspace hegemonism and power politics are emerging. Protectionism and unilateralism are on the rise. Cyber attacks and cyber crimes are becoming severe. Adopting a problem-oriented and systematic approach, General Secretary Xi Jinping clearly put forward "four principles" to promote the reform of the global internet governance system, namely, respecting cyber sovereignty, safeguarding peace and security, promoting openness and cooperation, and building good order, which points out the direction and principles for building a community with a shared future in cyberspace.

Fourth, it is China's proposal to enhance global well-being. The internet is a home shared by all mankind, and the future of cyberspace should be jointly created by all countries in the world. With a view on improving the well-being of all mankind, General Secretary Xi Jinping clearly put forward a "five-point proposal" of building a community with a shared future in cyberspace, namely, speeding up the building of global internet infrastructure and promoting inter-connectivity; building an online platform for cultural exchange and mutual learning; promoting innovative development of the internet economy for common prosperity; maintaining cyber security and promoting orderly development; and building an internet governance system to promote equity and justice. The proposal provides us with a practical path for building a community with a shared future in cyberspace and will surely promote the development of the internet to better benefit the people in China and the rest of the world. Thank you!

Bloomberg News:

I was wondering, has China finished what it set out to do with the overhaul and rectification of the internet and online platforms? Or is there still more work to be done? Thank you. 

Wang Song:

Thank you for your interest in internet platform companies. It is our important responsibility to encourage and support the healthy and sustainable development of internet platform companies. We carry out daily supervision of the behavior of internet platform companies in accordance with laws and regulations. If there is a prominent disorder on the internet, we will also carry out a "Clear and Bright" special campaign to deal with that. For internet platform companies, we generally follow the principle of promoting development and regulating their behaviors at the same time, guiding them with policies and managing them in accordance with the law, and pursuing social benefits and economic returns at the same time, thus creating a favorable environment for the development of internet platform companies. Thank you.

Southern Metropolis Daily:

The white paper mentions that China's internet development and governance practices have made positive contributions to building a community with a shared future in cyberspace and the country has put forward its proposals. Is China promoting a model of internet development and governance by issuing this white paper, "Jointly Build a Community with a Shared Future in Cyberspace"? Thank you.

Cao Shumin:

Thank you for your question. I'll answer it.

Different countries have different national conditions, different political systems, and different cultural backgrounds. We believe that all countries have the right to choose the internet development path that fits their own needs. At the same time, we also notice that people all over the world have the same desire to benefit from the digital age and they all expect to share the benefits of the internet for a better life. This is precisely what governments, international organizations, internet enterprises, technical communities, non-governmental organizations, and individual citizens should strive for.

China has explored experience for building a community with a shared future in cyberspace with its internet development and governance practices, and contributed its wisdom and solutions in this regard. All countries, with various forms of civilization, should and must be able to find their own path for internet development and governance. As a Chinese saying goes, we need to appreciate the beauty of each civilization and show respect for the diversity of civilizations in the world. We strongly support diversified exploration and practice, rather than imposing our own model on others. China is committed to respecting the sovereignty in cyberspace and respecting the rights of all countries to independently choose their own path of cyber development, model of cyber regulation, internet public policies, and their right to equal participation in global cyberspace governance.

That's all for your question. Thank you.

Kyodo News: 

I have two questions. The first one is: In the report to the 20th CPC National Congress, General Secretary Xi Jinping emphasized that China will move faster to boost China's strength in cyberspace. So what will China do in the next five years? And what measures will be taken? My second question is: As China continues to strengthen cyber security in recent years, some foreign companies have expressed worries about restrictions on their work in China. What is China's response to such concerns? Thank you.

Cao Shumin:

Thank you for your questions. You asked two questions. The first one is about building China's strength in cyberspace. We invite Mr. Yang Shuzhen to answer it, and Ms. Qi Xiaoxia will take the second.

Yang Shuzhen:

The 20th CPC National Congress has drawn a blueprint for the future development of the Party and the country. Particularly, based on the development trends of the information age, it has put forward a series of new tasks, new arrangements, and new requirements for boosting China's strength in cyberspace. We must fully implement the guiding principles of the 20th CPC National Congress, follow General Secretary Xi Jinping's requirements of "developing strong technology, content, and talent pool, building a solid base, and having a better say in related international affairs," and make efforts to build China's strength in cyberspace, so as to provide strong services, support, and guarantees for building a modern socialist country in all respects. Specifically, our future work will include the following seven aspects.

First, we will better develop online content to shape a new pattern of public opinion. We will give full play to the communication advantage of the internet, promote the construction of omnimedia communication system, uphold fundamental principles and break new ground in the publicity work concerning major online topics, strive to create high-quality, uplifting content, and comprehensively improve the accuracy, effectiveness, and attractiveness of international communication online, so as to steadily amplify mainstream online public opinion and the voice of China.

Second, we will promote the formation of a sound cyber ecosystem by improving the comprehensive internet governance system. On the basis of the governance system to be completed by this year, we will strive to build a scientific, efficient, and orderly internet governance pattern, promote cultural-ethical advancement on the internet, advance legislation, administration of justice, law enforcement, and law popularization with regard to the internet. We will intensify efforts to strengthen governance at the source of the cyber ecosystem, enhance governance in a systematic and law-based manner, and press ahead with "Operation Qinglang" so as to build a cleaner cyberspace.

Third, we will accelerate the construction of "digital China" to help realize Chinese modernization. We will give full play to the leading role of the overall layout of "digital China," accelerate the development of new-generation information infrastructure, promote the integrated development of the digital economy and the real economy, build internationally competitive digital industrial clusters, and accelerate the development of a digital government, a digital society, and a digital countryside. We will carry out the action plan for coordinated transformation and development of digitalization and greening and the action plan for enhancing digital literacy and skills of the entire population to promote new development with new growth drivers.

Fourth, we will focus on making breakthroughs in core technologies in the information sector to achieve greater self-reliance and strength in cutting-edge technologies. We will give full play to the new system for mobilizing resources nationwide and the leading role of major projects, accelerate original and pioneering sci-tech breakthroughs, strengthen basic research, improve incentive mechanisms, and facilitate the formation of an innovation ecosystem and the independent capacity of industries.

Fifth, we will maintain cybersecurity and data security to promote the modernization of the national security system and capabilities. We will comprehensively strengthen supporting systems and capacity building to ensure cybersecurity and data security, enhance security and protection of critical information infrastructure, strengthen the protection of personal information and important data, and effectively safeguard national cybersecurity and the vital interests of the people.

Sixth, we will strive to build a community with a shared future in cyberspace to promote the building of a community with a shared future for mankind. We will conduct in-depth exchanges and cooperation in cyberspace and actively participate in cyberspace governance in a bid to deliver more tangible benefits brought by the development of the internet to people all over the world.

Seventh, we will step up efforts to cultivate a team of internationally competitive professionals in cybersecurity and IT to advance the country's workforce development strategy. We will innovate the mechanism for cultivating talents in this realm to produce more science strategists, first-class scientists and innovation teams, young scientists, and outstanding engineers. We will also build a new type of think tanks and cultivate a strong team of officials to provide strong intellectual and personnel support to build up the country's strength in such fields. Thank you.

Qi Xiaoxia:

I will answer the second question raised by the reporter from Kyodo News. This question is about foreign companies' concerns about restrictions on operating in China. My answer is clear: such concern is absolutely unnecessary. As the 20th National Congress of the Communist Party of China has underscored, China remains committed to the fundamental national policy of opening to the outside world. You may have noticed that, in his speech at the opening ceremony of the fifth China International Import Expo on Nov. 4, President Xi Jinping pointed out that China "will work with all countries and all parties to share the opportunities in its vast market," "will work with all countries and all parties to share the opportunities from its institutional opening up," and "will work with all countries and all parties to share the opportunities from deepened international cooperation." We can see from this that China's door to the world will only open wider and wider. 

According to data from Chinese competent authorities, more than a million foreign companies were registered in China, of which Japanese-funded enterprises account for a large proportion. This shows that foreign companies are very confident in China's business environment. The Chinese government has always been committed to fostering a market-oriented, law-based, and internationalized business environment, encouraging enterprises to operate and develop in accordance with laws and regulations and treating Chinese and foreign-funded enterprises as equals. Thanks.

Beijing Youth Daily:

My questions are about international communications. The report to the 20th CPC National Congress says we will strengthen our international communications capabilities and make our communications more effective. What progress has been made in international communications in cyberspace? What steps will be taken to tell China's stories well and contribute to building a community with a shared future in cyberspace? Thank you.

Cao Shumin:

Thank you for your questions. To present a credible, appealing and respectable China is a long-term objective of strengthening international communications capabilities. Let's invite Mr. Chen Renze to answer the questions.

Chen Renze:

Thanks to the journalist with Beijing Youth Daily. Since the 18th CPC National Congress, General Secretary Xi Jinping personally planned, deployed, and promoted work on international communications and elaborated on a series of major theoretical and practical questions on strengthening international communications capabilities, pointing out a clear direction and offering fundamental guidelines for us. In accordance with General Secretary Xi Jinping's important instructions and the decisions of the CPC Central Committee, we have worked with local authorities and other departments to make innovations on the basis of what has worked in the past and extend the reach and influence of international communications in cyberspace. Positive progress has been achieved in this regard.

First, giving theoretical guidance and fully demonstrating the essence of the Chinese path. Focusing on major events and occasions, we leveraged the advantages of internet-based communication, innovated discourse, and strengthened presentation across all forms of media and interactive communication to interpret Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era from multi-dimensional perspectives. This was done to help more foreign audiences understand the power of truth and the global significance of the latest achievement of adapting Marxism to the Chinese context and the needs of our times.

Second, actively showcasing our image and enhancing the appeal of Chinese governance philosophy. We organized international internet communication activities such as "A Date with China" and "DaKa China" on major themes, including the 20th CPC National Congress, the Party's centenary, and the Beijing Winter Olympics. These activities showcased China's image as a country of diversity that is marching forward and gave the international community a hands-on experience on the three fundamental questions of why the CPC works in China, why the Marxism works in China and why the socialism with Chinese characteristics works in China.

Third, creating a positive impression and promoting the defining symbols of Chinese culture. By using modern, human-interest, international, and vibrant means of online communications, we promoted fine culture featuring Chinese characteristics, highlighting China's ethos, and embodying Chinese wisdom. These were delivered a group of online works which demonstrate Chinese aesthetics, modern concepts, and the shared values of humanity to better present Chinese culture to the world.

Fourth, increasing cohesion and encouraging more people to tell China's stories. With the internet as the medium, we built platforms for understanding China through programs such as "Why Red Star Shines in China" and "I am in China in the New Era." More and more foreign political leaders, experts, journalists, and overseas Chinese shared their interactions and friendship with China online, telling China's stories and promoting Chinese culture. China's image as a country that is credible, appealing and respectable has become more vivid and multi-dimensional. 

For the next step, we will focus on the important arrangements made in the report to the 20th CPC National Congress, prioritize studying, publicize and implement the guiding principles of the congress, follow the laws of international communications in cyberspace, develop a global perspective, keep in mind key tasks, build our ability, comprehensively improve the capacities, level and effectiveness of international communications in cyberspace, and better tell stories of China and the CPC to make China's voice heard by more people and present a true, multi-dimensional, and panoramic view of China. Thanks.

CRNTT:

What measures have been adopted in China to safeguard cybersecurity? Are there any practices or experiences in this regard that you'd like to share with other countries? Thank you.

Cao Shumin:

Thank you for your questions. Cybersecurity is an issue of great concern to everyone. Sustainable development is impossible without cybersecurity. I'd like to invite Ms. Sun to answer this question.

Sun Weimin:

Thank you for your questions and your concern about issues related to cybersecurity.

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to cybersecurity and made a series of important instructions, charting the course and providing fundamental guidelines for the work on cybersecurity. In recent years, local authorities and government departments across the country have thoroughly studied and implemented General Secretary Xi Jinping's important thoughts on building China's strength in cyberspace. Remarkable progress has been made in its efforts to ensure cybersecurity, which can be seen in the following five aspects:

First, a policy and legal framework for cybersecurity have taken shape. A number of laws and policies have been formulated and put in place, including the Cybersecurity Law, Data Security Law, Personal Information Protection Law, Cybersecurity Review Measures, and Security Assessment Methods for Cloud Computing Services. Moreover, over 300 national standards for related realms have been issued. These laws and policies, therefore, have served as pillars of the legal and policy framework for cybersecurity.

Second, the working system for cybersecurity has been steadily improving across the country. We issued the emergency response plan for internet security incidents, establishing and improving a national working system for cybersecurity emergency response coordination and notification so as to carry out supervision and early warning in a timely manner. In this way, we have established a coordinated working system nationwide. 

Third, the protection system for critical information infrastructure has witnessed remarkable progress, with its capabilities continuing to improve. We have promulgated laws and regulations, such as the Regulations on the Security and Protection of Critical Information Infrastructure, to provide a solid legal foundation for the security and protection system of critical information infrastructure. Thanks to the coordination of the Office of the Central Cyberspace Affairs Commission and the joint effort of other government departments, the protection of the critical information infrastructure is steadily improving. 

Fourth, education, technologies and industries concerning cybersecurity have witnessed integrated development. We have established the first-level discipline of cyberspace security, and launched a demonstration project for the construction of first-class schools and colleges of cyber science. At present, more than 60 universities in China have set up schools and colleges of cyber science, with over 20,000 graduates majoring in cybersecurity every year. The country has set up the national cybersecurity talent and innovation base and is building five national-level pilot areas for integrated development of education, technology, and industry in the field of cybersecurity.

Fifth, the understanding of "a secure cyberspace environment serves and relies on the people" has been growing in popularity. We have held China Cybersecurity Week – an activity to raise people's awareness of cybersecurity – annually for nine years, disseminating cybersecurity information in a regular manner. We have launched special campaigns against the underground industry and cybercrimes like hidden cameras, the sale of personal information, infringing on people's private information, as well as telecom and online fraud. 

The spirit of the 20th CPC National Congress is being studied and implemented throughout the country. The 20th CPC National Congress has charted the course for the future development of China's cybersecurity and IT undertaking, injecting strong impetus into international cooperation in this field. We will work together with all countries and jointly build a community with a shared future in cyberspace. Thank you. 

Red Star News:

The white paper, in several places, notes that Chinese enterprises have made a great effort to tap into oversea markets in terms of information infrastructure construction and e-commerce development. They have made great contributions to global internet development. However, some Chinese enterprises, such as Huawei, have come across restrictions in some countries. What's your comment on this? Thank you. 

Cao Shumin:

Thank you for your question. The rapid development of cyberspace and IT across the world is largely due to globalization. However, it is true that some anti-globalization trends are on the rise. I'd like to invite Ms. Qi Xiaoxia to answer this question.

Qi Xiaoxia:

This is a question of public concern and also a question that we should pay attention to. As China's internet industry grows rapidly, Chinese enterprises have engaged in the international market, conducted international cooperation on research and development, and provided a great number of safe, reliable, and quality products and services at a reasonable price, enjoying great popularity worldwide. They have taken an active role in fulfilling social responsibilities, creating plenty of job opportunities for the countries and regions where they are based. Due to a lack of space, the white paper only gives a few examples. 

Some Chinese companies, like Huawei, encountered difficulties in pursuing overseas business development. The reasons behind it are clear. Certain countries wantonly imposed export controls on China under the pretext of "national security" and deliberately blocked and suppressed Chinese companies, which infringed upon their legitimate rights and interests and severely disrupted the stability of global industrial and supply chains.

The white paper made it clear that the Chinese government opposes the politicization of technical issues and the containment of other countries' enterprises by abusing state power and violating market principles and trading rules.

We can see that under the current situation, global economic recovery faces multiple challenges and risks. What the international community urgently needs is unity, not division. We should tide over difficulties together instead of provoking confrontation. That is, those who call for decoupling, sever supply chains, and stoke division and confrontation, will only hurt themselves and other countries. Win-win cooperation is the only right path. Thank you. 

CNR:

The white paper says that the international organization of the World Internet Conference was inaugurated in Beijing in July 2022. You just mentioned that the World Internet Conference Wuzhen Summit would be held soon. What are the Chinese government's expectations for the future development of the international organization of the World Internet Conference?

Cao Shumin:

Thank you for your question. I will answer your question. The World Internet Conference has been held eight times. Based on the Wuzhen Summit, the international organization of the World Internet Conference was inaugurated this July. At the inaugural ceremony of the organization, Chinese President Xi Jinping sent a congratulatory letter, pointing out that the establishment of the organization is an important move echoing the informatization trend of the times, and it will deepen international exchanges and cooperation in cyberspace. He called for efforts to develop the World Internet Conference in line with forward-looking plans and high standards, to promote joint consultation through dialogues and exchanges, and to ensure benefits are shared by all through practical cooperation so as to contribute wisdom and strength to the global internet development and governance. The World Internet Conference is an open platform, and China stands ready to work with the international community to promote the development of the international organization.

We have the following expectations for the future development of the international organization of the World Internet Conference. 

First, in terms of enhancing consensus, we will focus on the new challenges and problems faced by cyberspace, uphold openness and inclusiveness, and support the international community to better handle disputes and reach more consensus.

Second, in terms of the digital economy, we need to leverage its role to advance socio-economic development. We hope that the digital economy can become a major engine in driving global digitalization, empowering its transformation. We also hope that the international organization can make contributions to the global digital economy.

Third, in terms of digital technology innovations, we will strengthen cooperation with the international community, deliver more major outcomes for innovation, and boost the advances in technology. The latest technological innovations are released at the Wuzhen Summit every year.

Fourth, in terms of cultural exchanges, we will encourage cooperation with internet media, advance the development of internet culture, promote mutual learning among civilizations, raise the public's digital literacy, and push forward the sound development of online cultural industries.

Fifth, in terms of setting rules, we will continue our efforts to advance the progress of global internet governance and encourage corporate members, research institutions, and universities worldwide to conduct discussions and exchanges on governance rules and technical standards, among other areas.

Sixth, in terms of exchanges and cooperation, we will build better platforms for exchanges and cooperation between governments, international organizations, multinational enterprises, technical groups, and experts and scholars. The above are our expectations. Thank you.

Xing Huina: 

Today's press conference is hereby concluded. Thank you to our speakers and all friends from the media. Goodbye.

Translated and edited by Gong Yingchun, He Shan, Wang Yiming, Yuan Fang, Xu Xiaoxuan, Zhang Rui, Cui Can, Zhang Liying, Li Huiru, Qin Qi, Liu Qiang, Yan Xiaoqing, Wang Wei, He Shan, Xu Kailin, Wang Qian, Zhu Bochen, 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

Speaker:

Mr. Ran Chengqi, director general of the China Satellite Navigation Office and spokesperson of the BeiDou Navigation Satellite System

Chairperson:

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

Date:

Nov. 4, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, the SCIO published a white paper titled "China's BeiDou Navigation Satellite System in the New Era," and organized this press conference to introduce and interpret its main content. The white paper fully implements Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, introduces China's policies to develop the BeiDou Navigation Satellite System (BDS) in the new era, and reviews the progress in BDS construction and application. According to the white paper, China has carried out active international cooperation on BDS and advanced its international applications so that the system can better serve the world and benefit humanity. The white paper points out that China will work with all other countries to promote the development of navigation satellite systems and contribute to building a human community with a shared future.

At around 12,000 Chinese characters, the white paper consists of preamble, main body and conclusion. The main body is divided into six parts: "BeiDou in the New Era," "A World-Class Navigation Satellite System," "Improving BDS Operation Management," "Promoting Sustainable Development of the BDS Applications Industry," "Upgrading BDS Governance" and "Contributing to Building a Human Community with a Shared Future." The white paper is published in eight languages — Chinese, English, French, Russian, German, Spanish, Arabic and Japanese — by the People's Publishing House and the Foreign Languages Press. It is available at Xinhua Bookstore outlets across the country. To help you gain an accurate and deep understanding of the white paper, we have invited Mr. Ran Chengqi, director general of the China Satellite Navigation Office and spokesperson of the BeiDou Navigation Satellite System, to brief you on relevant information and then take your questions.

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

Ran Chengqi:

Ladies and gentlemen, it's my pleasure to meet with friends from the media again. Thank you for your interest in and support for BDS. On July 31, 2020, General Secretary Xi Jinping announced to the world that BDS-3 was officially commissioned, marking the successful conclusion of the three-step BDS strategy and ushering in a new stage for the system's high-quality development.

As all Party members and all the Chinese people are earnestly studying the guiding principles of the 20th National Congress of the Communist Party of China (CPC), here we are issuing the white paper "China's BeiDou Navigation Satellite System in the New Era." The white paper reviews the development course of BDS and shows that in the new era, China has improved the BDS service capacity, achieved new progress in related industries, increased openness for relevant cooperation, and embarked on a new journey of BDS development.

First, China's BDS in the new era is a world-class navigation satellite system.

Based on its national conditions, China has independently developed BDS. We have independently developed core technologies, laid out an innovative system configuration, and offered quality and diverse services. Since BDS-3 was formally commissioned, the system has maintained uninterrupted, stable and reliable operation, and provided world-class services.

The 30 in-orbit satellites of BDS-3 have maintained a good operation status. Millions of their components in more than 300 categories, all produced by China, demonstrate excellent performance. The system's measurement positioning accuracy worldwide is better than five meters. Its accuracy is higher in the Asia-Pacific region and its service performance is better than all design indicators.

The system offers six high-quality specialized services: international search and rescue, global short message communication, regional short message communication, satellite-based augmentation, ground-based augmentation, and precise point positioning. We are now able to provide a wide range of services and are even leading the way in some areas.

China has achieved intelligent operation and maintenance for BDS, upgraded the software of in-orbit satellites, conducted global real-time monitoring and assessment of the system, and released the latest information. Since the system was commissioned, China has ensured its continuous and stable operation and improved its performance. We have embarked on a sustainable development path for BDS featuring high quality and efficiency, and low cost.

Second, large-scale application of China's BDS in the new era has entered a fast track of development.

China has achieved sustainable development of the BDS applications industry. The country has formulated industrial development strategies and included BDS industrial development into its 14th Five-Year Plan (2021-25). The system has been deeply integrated into infrastructure, empowered various industries and sectors, and served everyday life, delivering considerable economic and social benefits. In 2021, the total output of China's satellite navigation and location-based service industry reached 470 billion yuan, with a compound annual growth rate of over 20%.

China has forged secure and stable industrial and supply chains and reinforced the foundation of the BDS industry. We have built a complete industrial chain of chips, modules, antennas and boards, independently developed software and algorithms, and established a national product testing and certification system. Shipments of domestically manufactured chips exceeded 100 million, and foreign-manufactured chips of the same type are compatible with the system, thus ensuring the sound growth of the industry.

As BDS has been widely used in various industries and fields, its in-depth applications have grown. As of June, over 8 million BDS terminals had been installed on transport vehicles. Approximately more than 1.3 million terminals were used in the farming, forestry, livestock, and fishing industries and more than 1.8 million terminals adopted by public security organs. Large-scale BDS applications have been advanced in communication and timing services, meteorological monitoring, emergency response and disaster mitigation, and urban management. 

BDS has a wide range of applications in people's daily lives and they have easy access to its specialized services. BDS is becoming a standard configuration for mass-consumption products such as smartphones and wearable devices. In the first half of this year, among all types of smartphones that applied for network access in China, 128 supported the BDS-based positioning function. More than 130 million smartphones supporting BDS services were shipped, accounting for over 98% of the country's total. The BDS positioning service is used more than 100 billion times on average every day for map navigation on mobile phones. In particular, the public's mobile phones have been fitted with high-precision positioning services. Lane-level navigation has been implemented in eight cities, including Shenzhen, Chongqing, and Tianjin. The first mobile phone in the world that supports BDS-3 regional short message communication services has been officially released. Users can send short messages through BDS without changing SIM cards or phone numbers or using extra equipment.

Third, China's BDS in the new era contributes to building a global community of shared future

China has been committed to the principles of openness and integration and advancing the internationalization of BDS. It advocates the compatibility and interoperability of different satellite navigation systems, promotes the ratification of BDS by international standards, and expands its international applications to serve the world and benefit humanity.

Statements on signal interoperability with GPS and GLONASS have been signed and cooperative talks with Galileo system have been held. China has promoted the compatibility and interoperability of diverse systems under the framework of the United Nations. Doing so ensures a user-friendly BDS with the compatibility of various systems to jointly provide high-quality, diverse, secure and reliable services for global users.

Bilateral cooperation has been expanded and deepened. Cooperative mechanisms have been built with regional organizations and countries in Asia, Africa and Latin America. Over 50 outcome documents have been signed, including cooperation agreements on satellite navigation, memorandums of understanding, and cooperation roadmaps.

Multilateral cooperation has been strengthened. China-ASEAN, China-Arab States, and China-Africa BDS cooperation forums have been launched and the action plan for satellite navigation cooperation has been carried out. China has held the annual China Satellite Navigation Conference and Annual Conference of China GNSS and LBS every year and initiated the International Summit on BDS Applications. More than 100 overseas students from about 20 countries have obtained professional master's and doctorate degrees in China. More than 1,000 people from over 50 countries have participated in special training on satellite navigation.

China has been promoting BDS to be ratified by international civil aviation, maritime, mobile communications and search and rescue standards. BDS products have been applied in more than half of the countries and regions in the world. A greater variety of products have been exported and the application fields continue to be expanded.

In addition, this edition of the whitepaper has also drawn the blueprint for developing BDS by 2035 for the first time. China will develop a new generation of BDS with more advanced technology, powerful functions and better services. The goal is to create a more extensive, more integrated, and more intelligent comprehensive system that provides navigation, positioning and timing services, laying a solid foundation of spatiotemporal infrastructure for China's modernization.

Exploring the vast cosmos has been the dream of the Chinese nation for millennia. From observing Beidou (Chinese pinyin for the Big Dipper) to developing and using BDS, from gazing at the stars to utilizing space, BDS in the new era will continue to advance human progress in exploring the universe and make an even more significant contribution to achieving the great rejuvenation of the Chinese nation and building a global community of shared future and a better world.

That's all for my introduction. Thank you.

Shou Xiaoli:

Thank you for your introduction, Mr. Ran. Let's move on to the question-and-answer session. Please identify the media outlet you represent before asking a question. 

China News Service:

Mr. Ran, you published the first whitepaper on BDS six years ago. You have now published another whitepaper on BDS. How have things changed and progressed in the second white paper? Thank you.

Ran Chengqi:

Thank you. The first edition of the white paper was published on June 16, 2016. At that time, BDS-3 was in rapid development. Six years later, we published the white paper on BDS again at a time when BDS-3 had been completed and the three-step BDS strategy had been fully concluded. More importantly, the white paper on BDS in the new era aims to present the progress of BDS and China's achievements and vision in developing BDS. It also aims to share our ideas and experience. Both white papers were developed alongside national development in the new era and aim to serve national rejuvenation.

Today, we release this white paper to update to the public about the latest overall situation of the commissioned BDS. First, BDS-3, the configuration that covers the entire globe, has developed into a world-class navigation satellite system featuring innovative designs in constellation configuration, technical system, services and function. Its technical system, signal design, and service functions are the most advanced and powerful in the world. Second, BDS in the new era can provide a wide range of quality services and conduct real-time global monitoring on a regular basis. The promised positional accuracy of BDS is 10 meters. But we have managed to improve it to within 5 meters. In some areas, it could be 2 to 3 meters. The timing accuracy we promised is 20 nanoseconds, and now we achieved 10. Third, BDS in the new era is under ever-improving management. I mentioned just now that the top priority is to ensure an around-the-clock stable operation of BDS. Its system performance has been constantly improved during this process. Disclosing relevant information, we have also worked to ensure that BDS remains open to the whole world. Fourth, BDS in the new era has deeply integrated into the country's overall economic development and the world's economic domain, injecting strong momentum to growth and benefiting the world and humanity. 

Two of the most important parts in "China's BeiDou Navigation Satellite System in the New Era" highlight that BDS has entered a new era and its governance should be further modernized. We could interpret these two points from the following perspectives.

First, the three-step BDS strategy, particularly the complete construction of BDS, demonstrates the BeiDou Spirit of independent innovation, openness and inclusiveness, unity of purpose, and pursuit of excellence. It is a telling example of China's national spirit centered on patriotism and defined by reform and innovation in the new era. Independent innovation is the core competitive advantage. There would be no such top-class global navigation satellite system if we hadn't kept innovating on our own strength since the beginning of the endeavor. By embracing openness and inclusiveness, we have stayed true to our original aspiration of building a BDS for China and the world. Unity of purpose is the code to the success of BDS. It is an institutional advantage of socialism with Chinese characteristics to pool resources for major endeavors and forge ahead in unity. The constant pursuit of excellence is always on our agenda. We have worked hard to catch up and even harder to surpass and lead. That's how we turned BDS into one of the best navigation satellite systems in the world. 

Second, the vision for BDS is fully elaborated. We have built a new generation of BDS that is more advanced, powerful, and capable of providing much better services than before. Next, we will construct an integrated space-time system featuring a more ubiquitous network, deeper integration, and greater intelligence, which will help improve people's well-being and promote the development and progress of humanity. In simple terms, in spite of the fact that BDS is already quite good, we plan to develop a space-time system centering around it, which boasts unified standards, seamless coverage, ensured security and reliability, high efficiency, and great convenience and diversity. 

Third, we demonstrate to the public the modernized satellite navigation governance. We need to balance considerations and seek development. We will coordinate the domestic rule of law with foreign laws, accelerate the formulation of related regulations, participate in the global governance of satellite navigation, and ensure the standardized and sustainable development of BDS. 

Fourth, BDS specialized services are publicized. It can provide seven types of services, including positioning and six other distinctive services. It is worth mentioning that the system's high-accuracy service and short message communication service are dashing into our lives and displaying the application strength of BDS. I may offer you more information on it later. 

That's all I have to say. Thank you.

China Daily:

I have two questions. Many map software operators have adopted BDS as their preferred positioning and navigation service option. Can you illustrate some other scenarios involving such high-accuracy applications in our daily life? Moreover, BDS officially launched a trial application for lane-level navigation recently. What do you think of its prospects? Thank you. 

Ran Chengqi:

Thanks for your question. Just now, I talked about the application of BeiDou's high-precision positioning services. BDS has already provided positioning accuracy at 5 meters and above. However, with economic and social development, the positioning accuracy of 5 meters can no longer meet the needs of users, as the demand for accuracy in socioeconomic development is getting higher and higher. For example, there is a higher demand for accuracy in self-driving technologies, ride-hailing services, deformation monitoring, mudslide monitoring, precision agriculture, and other fields. What shall we do? We have innovatively proposed to build a ground-based augmentation system and achieve higher accuracy through matching and integrating the system with BDS across the country.

Now a nationwide network of BDS ground-based augmentation has been built to provide real-time meter-level, decimeter-level, centimeter-level, and post-processing millimeter-level high-precision positioning services for industrial users and the general public. For ground-based augmentation service, its real-time positioning accuracy can reach 2 centimeters horizontally and 5 centimeters vertically. The post-processing accuracy can reach 2 millimeters horizontally and 5 millimeters vertically. Such high-precision positioning services will lead to more diverse applications and services. For example, we have expanded application scenarios to precision agriculture, deformation monitoring, autonomous driving, electric power inspection, smart ports, and bike sharing.

Let me give you a few examples. At present, this network has provided BDS accelerated positioning and BDS high-precision services for more than 1.5 billion users in more than 230 countries and regions, with services delivered 2 trillion times in total, equivalent to nearly 3 billion on average per day. At present, BDS has provided high-precision positioning services for more than 20 million mobile phones in the country. You also mentioned lane-level navigation just now. In this regard, we have applied high-precision services to people's daily driving and vehicle navigation in a pilot program. It has been carried out in eight cities in China, including Shenzhen, Guangzhou, Dongguan, Chengdu, Chongqing, Hangzhou, Suzhou, and Tianjin. Going forward, we will further expand the program nationwide.

At present, BDS also provides high-precision services for a total of 1.1 million shared bicycles in China and 200,000 electronic fences for shared bike parking in 12 cities across the country. Haphazard parking of shared bicycles, a problem plaguing the city, has been tackled by BDS high-precision services. I am also a user of shared bicycles. If the bicycle is not parked in the designated zone, the rider will not be able to lock the bike. Through this technical method, relevant departments can adjust guidelines for high-precision application scenarios.

At the same time, this network also provides high-precision positioning services for 21 models of smart cars in China, with a mileage of over 2.5 billion kilometers, and for a total of 50,000 industrial drones of domestic drone companies. All of this shows that BDS high-precision applications point to the future of China's satellite navigation industry and has a broad market. We also look forward to seeing more uses of BDS high-precision services in all walks of life. Thank you.

CCTV:

Mr. Ran mentioned that since the official commissioning of BDS-3 in 2020, the work focus has shifted from BDS construction to BDS operation management. BDS has been operating stably during the past two years, so what results have been achieved? What deficiencies need to be improved? Thank you.

Ran Chengqi:

Thanks for your questions. On July 31, 2020, General Secretary Xi Jinping announced that BDS-3 was formally commissioned, and emphasized to us that the system must be easier to use and more stable in operation. All services are built on the premise that the system is more stable and reliable. If not, competing in the market and providing services to the general public would be difficult. Therefore, operational stability has been considered a top priority since BDS-3 was completed. We have pooled relevant technical resources and teams at home, and unswervingly pursued stable operation and performance improvement.

I have an example. The technical standards of BDS availability we designed in the first place was 99%, which meant that 1% of the accuracy was allowed to exceed standards. Satellite navigation systems all over the world are using 99% availability standards, and the time when 1% of the accuracy exceeds the standards is about 86.4 hours per year. We have increased the availability standards from 99% to 99.9% through various parties' technical and management measures. Although it is only a 0.9% increase, which seems like a small step, it is a real giant stride. Through these methods, we have decreased the time length of BDS accuracy that exceeds the standards from 86.4 hours to 8.64 hours. Of course, 100% availability is guaranteed in the actual work. From 99% to 99.9% and then to 100%, this is the overall performance of BDS. We have realized round-the-clock services and no time period affects the use of the system, and we have made the impossible possible thanks to the joint effort of many scientific researchers. We have also adopted a series of advanced and innovative means. For example, in BDS operation, we carry out early warning and prediction or real-time monitoring to predict the situation of the sensitive single-machine systems or components on the satellite, and to make judgments based on the data of satellite operation. We also have a slogan called "spot problems before users do, identify signs of problems before they appear, and solve problems before they cause any impact," so we ensure that proactive measures are rolled out to eliminate hidden problems, give early warnings, and release information to users in a timely manner. We have made it so that from the beginning of BDS construction to the present, the system ensures stable operation, and offers uninterrupted services. We will continue to uphold this standard in the future to ensure BDS's continuous and stable operation. Thank you.

Hong Kong Economic Herald:

We have learned that in the future, in terms of internationalization, BDS will continue to go global, and provide more products and services for overseas markets under the Belt and Road Initiative. Can you give a detailed introduction to the achievements of international cooperation regarding BDS? What are the plans for the next step? Thank you.

Ran Chengqi:

BDS development has been designed in such a way to ensure integration of construction, application and international cooperation since the very beginning. We always prioritize BDS going global and providing services worldwide, and pursue openness and cooperation for its development. We have advanced international cooperation concerning BDS-1, BDS-2, and BDS-3. We fully participate in international satellite navigation affairs. There are several aspects.

First, we have participated in the activities of the United Nations' International Committee on Global Navigation Satellite Systems, or ICG. As an original member, China has made its contributions to the ICG in a timely fashion, which were highly appraised by the UN and the UN Office for Outer Space Affairs (UNOOSA). China's BDS is a responsible system that leads the development of global satellite navigation systems. We have participated in previous satellite navigation work conferences and actively assumed responsibilities for BDS' part in relevant activities of UNOOSA. We have undertaken research on related topics, and participated in the forums of international organizations, in order to promote BDS to provide better services for all mankind. Among them is an organization for the application of satellite navigation systems for developing nations. China has also publicly advocated for it and offered help.

Second, we have actively conducted bilateral talks on cooperation. Above all, we have established specialized cooperation channels with major global navigation systems, such as the United States' Global Positioning System (GPS), Russia's GLONASS system, and Europe's Galileo system, and achieved sound progress. We have jointly promoted the application of global satellite navigation. We have signed the joint statements on compatibility and interoperability with the GPS system and the GLONASS system, and conducted frequency coordination with the Galileo system. In addition, we have conducted application cooperation with countries along the Belt & Road, including both bilateral cooperation and multilateral cooperation. For example, we have participated in and successfully held three sessions of China-Arab States BDS Cooperation Forum, two sessions of China-Central Asia BDS Cooperation Forum, and the First China-Africa BDS Cooperation Forum. We have jointly promoted the application of satellite navigation and BDS by issuing forum statements, action plans, and application scenarios. We have established close ties with countries in Central Asia and Africa, and regional organizations such as the League of Arab States and the Association of Southeast Asian Nations, and conducted in-depth cooperation in testing and evaluation, joint application, education and training, and technical cooperation. It's fair to say that the application of BDS has attracted massive attention and expectations from the world. A Chinese delegation recently attended the meeting of the International Committee on Global Navigation Satellite Systems, which was held in Abu Dhabi in the United Arab Emirates, and has received proposals from many countries and organizations for enhanced cooperation with BDS. They praised BDS as a useful system. We are particularly delighted to promote systems, products, applications, and concepts from China to the world.

Third, we have vigorously participated in multilateral organizations, including both international organizations and standard organizations, and accelerated the application of BDS in the fields of civil aviation, maritime, mobile communication, and international search and rescue. China's BDS has passed all 189 satellite navigation standards listed by the International Civil Aviation Organization (ICAO). We will fully join ICAO and further promote the application of BDS in the field of international civil aviation under the framework of ICAO. Since BDS-1, we have promoted ratification of BDS by the 3rd Generation Partnership Project (3GPP). Therefore, most smartphones we use today are equipped with BDS. We joined the International Maritime Organization in 2014 and other international search and rescue organizations. In light of the special contributions of BDS short message communication service, we have put forward new suggestions to international search and rescue organizations. When people encounter dangers at sea, they can apply for help to the search and rescue organizations. But the previous international rescue signal was one-way, so it was unknown to the caller whether the distress signal was received by search and rescue organizations. BDS ingeniously developed two-way signals to notify the caller that the distress signal has gotten a response, which would be a tremendous mental support for the caller. That is a great contribution from BDS to the international search and rescue efforts. Those BDS applications have been widely recognized among the public. Additionally, after the application of many products and technologies, as part of our efforts to help people to better understand BDS, we have promoted exchange activities, inviting foreign students to come to China to learn and receive training about our technologies and products so as to make people have a better understanding of China's BDS and its applications. Thank you.

Southern Daily:

With the BeiDou-3 global navigation satellite system now operational, what is the current operating status of its satellites? Are there any new plans for further satellite launches to expand the existing BeiDou navigation constellation? Thank you.

Ran Chengqi:

As of now, we have a total of 45 satellites in orbit to provide services, including the BeiDou-3 satellites in orbit and the original BeiDou-2 satellites, which have been in service for an extended period of time, so the system has been functioning very well. Even in such a case, we have to continue to ensure stable operation and make performance improvements to the system. Based on that, we will make efficient use of the satellites in orbit and coordinate with ground systems. At the same time, we will actively promote the construction of a backup satellite system to further ensure the reliability of the system. According to our schedule, we have arranged the production and development of a backup satellite system, including three to five satellites, to be launched next year. We will further strengthen the construction of the constellation to ensure the stable operation of the system. As a major country, China will deliver on our promise of providing world-class services to the rest of the world. 

On this basis, we will further develop the next-generation BDS. We haven't given it a name yet, but it will likely be Beidou-4. It should be better than Beidou-3, with enhanced system performance. At the same time, we need to further integrate it with emerging technologies, such as mobile communications, low earth orbit communications, traditional inertial navigation, and so on. The technologies should be deeply integrated. The next generation will be a more ubiquitous, more intelligent, and more integrated. You may feel the three "mores" are very broad and vague, but in fact, to put it simply, BDS is still the core, and we will incorporate all the emerging technologies related to space-time information into this system, developing it synchronously at a faster speed. Our projected goal is to fully build this space-time system by 2035. By then, we hope that Beidou, China's time-space system, will be everywhere, including underwater, on the ground, indoors, in the air, in deep space, or even in distant outer space. Simply put, Beidou will provide you with safe and reliable space-time technology anywhere anytime. This is our overall consideration for development. Thank you.

Cover News:

Mr. Ran, you just introduced that the Beidou's goal is to build a more ubiquitous, integrated, and intelligent space-time system. Can you explain the specific meaning of this goal? What more needs to be done to achieve this goal? Thank you.

Ran Chengqi:

I have sort of answered this question just now. Everyone has paid great attention to Beidou-3. It is really good. Will there be anything better than it later on? Our answer is yes. For Beidou-3, we should ensure that the system itself continues to improve. How to develop it into the next generation of BDS? First of all, we should build the next-generation BDS, likely BeiDou-4, to be better. This system will make further breakthroughs. First, for the satellite constellation, we now have medium-orbit and high-orbit satellites. In the future, we will also consider including low-orbit constellations to build a navigation constellation for high, medium, and low orbits. In addition to providing reliable and better performance in positioning and navigation services, there's the high-precision positioning service as I mentioned earlier. Everyone feels it is great to use, but that service is only applicable inside China. Can we push this network to be used universally? This is our expectation for the future. We particularly hope to provide such a high-precision, highly reliable, and powerful space-time network through the integration of high, medium, and low-earth orbit constellations as well as the integration with mobile communications and low-earth orbit communications. We especially hope that after construction is completed, users all over the world can share the positioning accuracy of 5cm, 2cm, 5mm, and 2mm. We have made a great demonstration of its technology, and the scheme is sound. We are very confident about its construction pace.

We also hope to lead the development of the global satellite navigation system and even the space-time field after the construction of the next-generation space-time system so that it is more ubiquitous, more integrated, and more intelligent. Being ubiquitous means the integration of various technologies and methods, including seamless coverage, which aims to solve all the problems related to space. General Secretary Xi encouraged us to "explore the vast universe," and we will go further and go to deep space. We should rely on China itself for our space-time benchmark. Whether there is a space-time benchmark in the far space of the Milky Way Galaxy... we are also working hard on it. We believe that the next generation of space-time benchmarks can solve this problem. I want to say we are looking forward to a promising future. The year 2035 is our goal. We hope to do better on this basis to make Beidou's highly reliable and high-quality services available at any time. Of course, through such high-quality services, we will also promote the development of the economy, society, and industrial chain and make new contributions to national economic and social development. Thank you.

Tianmu News:

You mentioned mass consumption and mass applications, and now we have no sense of security without mobile phones. Not long ago, the first mobile phone to support Beidou-3's short message communication service was launched. I would like you to elaborate further on it. How was this function realized? And will other mobile phones and smartphones also support this function in the future? Thank you.

Ran Chengqi:

Thank you for your question. I wanted to share this but never got a chance to do so. The application of BDS short message communication services to mobile phones is a dream we had as early as BDS-3 was proposed and approved. In addition to positioning and navigation services, BDS-3 also features a short message communication service. This function is amazing, but its application requires an expensive, exclusive terminal that must be independent of mobile phones and thus would bring a lot of inconveniences. At that time, we wondered if this function could be incorporated into mobile phones. This was a good concept, but we faced many technical problems. It takes 10 years to sharpen a sword, and it took us 10 years to work on this function. We achieved it thanks to China's progress in communications, our technological advances in the chip industry, and especially to the mobile operators and mobile phone producers. 

We first built a short messaging civil platform for BDS to deliver all the short message services. It is available to China Mobile, China Telecom and China Unicom users if combined with these mobile operators. However, it posed a great technical challenge to include these services in mobile phones. We often said it was one of our dreams to directly connect satellites with mobile phones. Today, we've achieved it. We made the terminal miniaturized and chip-based with low power consumption to realize the function. It was not our purpose to adopt another independent terminal. We wanted the function to be included in mobile phones. Thanks to our technological progress and joint efforts, we solved the issue by developing the BDS short message communication radio-frequency baseband integrated chip technology.

The function was finally included in modern mobile phones as a chip and perfectly integrated. Today's chip owes much to the efforts of mobile phone manufacturers, who did an excellent job dealing with the technical system, signal design and key problems. The current chip can be made into a mobile phone roughly at the cost of 10 yuan ($1.38) without changing the phone card and number or adding peripherals. There is no difference between a BDS-enabled mobile phone and other mobile phones. However, with this chip, we can send information through this mobile phone when there is no mobile signal. The advantage is that you can still send text messages, report your location, and provide your location track in that case. You may think that this function can hardly be felt in daily life. But ask yourself how you would feel if your mobile phone had no service, but was equipped with this function. I often say that you may never use the function, but you gain a sense of security. Nowadays, it has been widely applied to many mobile phones. You will have a sense of security if you can always connect with the outside or be seen online. The status is the security guarantee BDS provides.

In the future, we also plan to open the technology to domestic mobile phone manufacturers to provide better services. We hope more domestic mobile phone manufacturers and operators will participate. What we especially want to see is that BDS telecommunication services contribute much to our economy and society and provide a more reliable guarantee for public travel safety. We have realized the function. We can ensure that BDS-3 service covers people in the Asia-Pacific based on its capability. With a mobile phone in hand, one can travel over the Asia-Pacific and even the world. BDS has also set a precedent for direct satellite connection with mobile phones. The exploration is helpful. Some international mobile phone brands are also in pursuit of this function. From this point of view, applying BDS short message communication services to mobile phones is leading to progress in innovation. Thank you.

The Poster News APP:

Since the 18th CPC National Congress, BDS has been used in more than half of the countries and regions in the world as a pacesetter of aerospace science and technology products for export and has become a well-known global brand. Could you give some examples of BDS applications overseas? Thank you.

Ran Chengqi:

Regarding the international application of BDS, we have promoted it as a priority when participating in activities of relevant UN organizations and maritime and mobile communication organizations as well as relevant bilateral activities. We remain committed to advancing BDS' international application, and our focus is countries along the Belt and Road. The BDS' global commitment and China's status as a responsible major country has made it imperative to better promote BDS internationally. In fact, we already promoted BDS internationally when BDS-2 was completed in 2012, and achieved remarkable results thanks to our continuous efforts. When the basic system of BDS-3 was completed in 2018, it provided services for countries along the Belt and Road first. To foster understanding of the system, we have organized multiple international training courses on its application, as just mentioned. I'd also like to provide several specific, more impressive application cases here. 

BDS has become accessible in more than half of the world's countries and regions. For example, in Saudi Arabia, it has been used for surveying, mapping and collecting geographic information, developing urban infrastructure, and positioning people and vehicles in deserts, among other important fields, winning widespread acclaim from local users. In Tajikistan, real-time, continuous monitoring of the Ozero Sarezskoye Dam was carried out based on BDS to detect deformation with millimeter-level accuracy, thus ensuring the dam's safety and the lives of local people. In Lebanon, BDS' high-accuracy technology was used for wharf construction surveying at the Beirut Port. The Burkina Faso government in Africa used BDS' high-accuracy technology to carry out surveying and mapping for hospital construction, thus finishing the surveying work within six days and shortening the construction time by half, significantly contributing to pandemic control. BDS has been successfully applied in ASEAN, South Asia, East Europe, West Asia and North Africa. It has provided good services to the China-Europe freight trains. China and Russia have also conducted stronger and closer cooperation in many navigation application fields under a framework agreement for strategic cooperation until 2025. BDS has also done a good job in serving relevant road transportation systems and cross-border transportation. Such cases are too numerous to list. I want to say that BDS products and technologies have been applied in more than half of the world's countries, and we will continue to promote its application systematically. I hope that our media friends can help publicize BDS so that the world can better understand it. Thanks.

Beijing Office of Changjiang Daily:

China has seen bumper harvest this year. Could you share with us the application of BDS technology in agriculture? Thanks.

Ran Chengqi:

The application of BDS in agriculture has drawn much attention. The high-precision agricultural application of BDS will be significant since agriculture constitutes a vital area. During my visit and field trip to Xinjiang around five or six years ago, I saw the high-accuracy application of BDS. For example, I was told that when there were no high-precision products, the labor intensity of drivers was very high as they had to maintain precision while operating the harvesters and other agricultural machinery. After the broad application of the highly accurate BDS, the accuracy of the agricultural machinery can reach about two centimeters, greatly easing the drivers' labor intensity. A driver told me he didn't need to do anything in the machinery except turn the steering wheel in a corner. The vast land of Xinjiang means that farming machinery must drive long distances. Therefore, BDS could be applied well in fertilization, sowing, agrochemical spraying, harvesting and other agricultural activities. I was also told that thanks to high-precision BDS, the precision of seedling fertilization could reach around two centimeters. This seemingly small technological progress can bring about significant changes. For example, precise plowing, agrochemical spraying, and fertilization can significantly cut costs, improve efficiency, reduce labor intensity, and increase the returns of the farms.

The high accuracy of BDS has been applied in agriculture in several other cases. BDS has fully empowered agricultural production and become a vital scientific and technological force driving agricultural development. According to incomplete statistics, the number of automatic agricultural machinery based on BDS has exceeded 200,000 units (sets) this year, providing tangible services for farmers and improving agricultural ecological efficiency. During the past autumn, BDS-based self-driving tractors, seeders, harvesters and other agricultural machinery, and drones played a significant role in harvesting, plowing and sowing in Beijing, Hebei, Henan, Shandong, Zhejiang, Jiangsu, Heilongjiang, Gansu and other places. Many farmers plan the routes of the machinery through mobile phones and accurately stay on top of the farming work. BDS is now serving as a real "golden key to a good harvest" for farmers. I believe that BDS will continue to support China's precise agricultural development in the future. Thank you.

CNR:

We know that BDS has become a new economic growth driver. Since BDS-3 was opened to global users more than two years ago, a host of BDS-related new industries have emerged. How important are these emerging industries to China's economic growth? Thank you.

Ran Chengqi:

This question is a bit difficult to answer. Why? We often say that BDS is ubiquitous at every time. Since time and space information is necessary for everything, there is a line in the BDS community that satellite navigation applications are only limited by human imagination. I remember saying at other press conferences that if you think about it, without spatiotemporal information, the information we obtain and our perception of the world will be inaccurate or even useless. Therefore, time and space are crucial to our economic and social development. With the transformation of the economy and society, the development of information technology, and the advancement of intelligence and automated technologies, spatiotemporal information, especially that of high precision, has become more prominent. You referred to emerging industries in your question, but I can't find a single sector without a BDS application. We are also looking forward to integrating with emerging technologies. We are delighted to say that BDS can be integrated into all walks of life and with all emerging technologies, including intelligent technologies, automated technologies, cloud computing and big data. We often say that BDS serves everyday life. In my view, be it in the traditional industries or emerging and future industries, BDS, now well applied in various sectors, can always play a role by providing spatiotemporal information.

We have conducted over 50 demonstration projects with relevant ministries and commissions in various provinces and cities. For example, in 2012, we worked with the Ministry of Transport. We carried out the BDS demonstration application on chartered tourist buses, regular buses at class III (serving between non-adjacent counties) or above, and vehicles carrying dangerous goods. We aimed to cover 79,000 vehicles at that time. By June this year, however, the number had exceeded 8 million. If BDS is applied to more vehicles, mobile phones and industries, it will surely become a system offering comprehensive services to diverse industries. For the better operation and development of BDS, I hope that all walks of life can pay more attention to spatiotemporal information and BDS applications. The development of BDS is integrated, which can spur new sectors and industries and drive overall socioeconomic development in China. Thank you.

Shou Xiaoli:

Thank you, Mr. Ran Chengqi. Thanks to the friends from the media for your participation. Today's briefing is at this moment concluded. Goodbye, everyone.

Translated and edited by Zhang Liying, Wang Wei, Li Huiru, Qin Qi, Huang Shan, Zhang Rui, Liu Qiang, Duan Yaying, Wang Yiming, Zhang Tingting, Yuan Fang, He Shan, Yan Bin, Ma Yujia, Xu Xiaoxuan, Yang Xi, Xu Kailin, Zhang Junmian, 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

Speaker:

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

Chairperson:

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

Date:

July 22, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the SCIO. This is a regular briefing on China's economic data. Today, we are delighted to be joined by Ms. Wang Chunying, deputy administrator and spokesperson of the SAFE, who will introduce China's foreign-exchange receipts and payments data in the first half of 2022 and take your questions. 

Now, let's give the floor to Ms. Wang for her introduction.

Wang Chunying:

Good morning. Welcome to today's press conference. I'll begin by introducing China's foreign-exchange receipts and payments data in the first half of 2022, and then answer your questions.

Since 2022, the international landscape has been complex and challenging, with continued COVID-19 outbreaks and the prospect of global economic growth weakening. Under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, China has effectively coordinated pandemic prevention and control with socio-economic development. Recently, major macroeconomic indicators have stabilized and picked up, and the economy has shown a general trend of recovery and development. Against this backdrop, China's foreign exchange market has become more resilient, the RMB exchange rate has been relatively stable and sound, and cross-border capital flow has been generally steady. In the first half of 2022, foreign exchange settlement and sales by banks registered $1.33 trillion (or 8.6 trillion yuan denominated in RMB) and $1.24 trillion (8.1 trillion yuan), respectively, creating a surplus of $85.2 billion (545.2 billion yuan). The cross-border receipts and payments by non-banking sectors stood at $3.16 trillion (or 20.5 trillion yuan denominated in RMB) and $3.08 trillion (20 trillion yuan), respectively, resulting in a surplus of $83.4 billion (533 billion yuan). In the first half of this year, China's forex receipts and payments showed the following main features:

First, forex settlement and sales by banks as well as cross-border receipts and payments by non-banking sectors continued to create surpluses, with both recording a surplus of over $80 billion in the first half of this year as I said just now. This is mainly because the basic surpluses in trade in goods, direct investment and other fields were kept at a high level. Specifically, in the first quarter, forex settlement and sales by banks as well as cross-border receipts and payments by non-banking sectors maintained high-level surpluses of $58.7 billion and $62.2 billion, respectively. In the second quarter, when the domestic situation and external environment were more complicated, the two indicators created surpluses of $26.5 billion and $21.1 billion, respectively.

Second, forex selling rate edged up and cross-border financing of enterprises remained stable. In the first half of this year, the forex selling rate measuring the willingness to buy forex, which is the ratio of forex customers buying from banks to their foreign-related forex expenditure, reached 66%, up by 2 percentage points over the same period last year. In terms of foreign investment financing, by the end of June this year, the forex loans of Chinese enterprises and other market entities at home amounted to $351 billion, which was basically the same as that at the end of 2021. Cross-border trade financing, including import payments by overseas agents and forward letters of credit, registered $116.4 billion, slightly lower than that at the end of 2021. This is the second feature. 

Third, forex settlement rate increased steadily and enterprises' forex deposits were basically stable. In the first half of this year, the forex settlement rate measuring the willingness to settle forex, which is the ratio of forex customers selling to banks to their foreign-related forex income, was 67%, up by 0.4 percentage point from the same period in 2021. By the end of June this year, the forex deposits of Chinese enterprises and other market entities at home amounted to $695.1 billion, basically in line with that at the end of 2021. 

Fourth, forex derivative transactions maintained growth and market players' awareness of exchange rate risk management steadily increased. In the first half of this year, to manage exchange rate risks, enterprises employed forward derivatives, options and other derivatives of more than $750 billion, an increase of 29% year on year, which was significantly higher than the growth rate of forex settlement and sales in the same period. As a result, the hedge ratio of enterprises rose to 26%, 4.1 percentage points higher than that of last year. This shows that market entities are more aware of averting exchange rate risks and are better able to adapt to fluctuations in the RMB exchange rate.

Fifth, the amount of forex reserves remained basically stable. At the end of June, China's forex reserves registered $3.07 trillion. Since the beginning of this year, the U.S. dollar index has risen remarkably and the prices of financial assets in major countries have fallen sharply. Forex reserves will drop in amount when denominated in dollars. This, coupled with changes in asset prices, constitutes a vital reason for the changes in the book value of forex reserves. 

Going forward, the State Administration of Foreign Exchange (SAFE) will conscientiously implement the decisions and arrangements of the Party Central Committee and the State Council. We will act on the general principle of pursuing progress while ensuring stability, continue to deepen the reform and opening up in the field of foreign exchange, further facilitate cross-border trade and investment and financing, and serve the development of the real economy. Meanwhile, we will strengthen the study and judgment of the situation of foreign exchange revenue and expenditure. We will improve the regulatory framework underpinned by both macro-prudential governance and micro-prudential supervision for the foreign exchange market, and maintain the steady operation of the foreign exchange market and national economic and financial security. These efforts will enable us to pave the way for a successful 20th CPC National Congress.

The above is the main statistical data for foreign exchange revenue and expenditure in the first half of 2022. You are now welcome to ask questions about foreign exchange revenue and expenditure.

Shou Xiaoli:

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

CCTV:

Since the beginning of this year, the external environment has become more challenging and complicated. How do you evaluate the performance of China's foreign exchange market in the first half of this year?

Wang Chunying:

Since the beginning of this year, although we have faced more complicated and severe external shocks and challenges, we can see the enhanced resilience of China's foreign exchange market. It is evident both from the price indicators related to the RMB exchange rate and the quantitative indicators such as the balance of payments and receipts and payments with foreign involvement. To be specific:

First, the RMB exchange rate has become more resilient and performed steadily worldwide. This year, affected by the interest rate hike of the U.S. Federal Reserve, the geopolitical conflict, and multiple other factors, the main change in the international foreign exchange market is the strengthening of the U.S. dollar and the weakening of major non-U.S.-dollar currencies. Against such a backdrop, the RMB exchange rate against the U.S. dollar has depreciated. However, compared with other major international currencies, the value of the RMB has been stable. Judging from the rise of the U.S. dollar index and the decline of other major currencies, the U.S. dollar index has increased by more than 11% since the beginning of this year. The depreciation of the euro, sterling, and yen against the U.S. dollar has been kept between 10% and 17%, and the depreciation of the RMB against the U.S. dollar has stood at 5.8%. From the multilateral exchange rate perspective, the RMB exchange rate index has seen an appreciation of 0.1%, indicating that the RMB is stable against a basket of currencies. Regarding exchange rate expectations, the relevant indicators of foreign exchange forwards and options have shown that there are no notable appreciation and depreciation expectations for the RMB exchange rate. In general, market entities have maintained a rational and orderly trading mode. Viewing the recent performance, although faced with a strong U.S. dollar, as the domestic economy has become stable and been recovering, the stability of the RMB exchange rate has become more prominent among the major global currencies. Since July, the multilateral exchange rate has risen steadily.

Second, China's cross-border capital flows are generally stable, demonstrating a relatively balanced development trend. At the beginning of this press conference, we introduced that in the first half of this year, there was a certain amount of surplus in the international receipts and payments via banks and in the foreign exchange settlement and sales by banks. Recently, short-term fluctuations and seasonal changes were seen in several channels. However, the basic equilibrium of cross-border capital flows was maintained, reflecting the robust performance of China's balance of payments structure.

Third, the current account surplus and long-term capital inflows are the fundamentals to stabilize China's cross-border capital flows. On the one hand, the current account maintains a reasonable surplus. In the first quarter of this year, the current account surplus reached $88.9 billion, the highest compared with the same period throughout history, and an increase of 25% over the same period last year. The ratio to GDP stood at 2.1%, which was within a reasonable range. In the second quarter, the trade surplus of goods was relatively high, and the deficit of cross-border travel and other service trade was low. It was estimated that the current account would continue the pattern with a reasonable surplus. On the other hand, direct investment under the capital account and medium- and long-term asset allocation funds are still playing a leading role. China's economy has maintained long-term growth, and China has been continuing to improve its market environment. Our efforts have helped attract capital inflows for direct investment and medium - and long-term asset allocation. From January to May this year, the utilized foreign investment was $87.8 billion, registering an increase of 23% year on year. Investment from overseas central banks and allocated funds tracking international indexes were stable in China's bond market, counterweighing the short-term fluctuations of cross-border capital.

Generally speaking, China has efficiently coordinated epidemic prevention and control with economic and social development. The strong resilience, ample potential, and vast room for maneuver of the Chinese economy have all laid a good foundation for the smooth operation of China's foreign exchange market and provided more support for China to cope with changes in the external environment. Thank you.

China Economic Information Service:

The tightening of monetary policy in major developed economies has been accelerating, significantly impacting global cross-border investment and financing. Against this background, what's your opinion on the changes and trends of the foreign holdings of China's bonds? Thank you.

Wang Chunying:

We have touched upon several issues related to your question, but I'll give more explanation. Recently, we have seen major changes in the international financial market. The exchange rate and interest rates of the U.S. dollar have risen rapidly, coupled with capital outflows from emerging economies. From a global perspective, we have made observation and analysis on a longer-term basis, and we have several ideas to share with you.

First, China's bond market has gradually become an important global cross-border investment destination. In recent years, China's bond market has been opening steadily, and cross-border transactions have become more convenient. China's bonds have been included in the three major international indexes, and the impact and attractiveness of the domestic bond market have improved dramatically. Under this background, at the end of 2021, China attracted nearly $820 billion in cross-border bond investment, accounting for about one third of emerging economies' total external bond investment. It includes the bonds purchased by overseas investors within China and the bonds that domestic entities issued overseas. Both of them have significantly increased or remained active. This is for the stock of the bond. In terms of flow, we expanded the opening up of the securities market in 2017. From 2017 to 2021, the amount of cross-border bond investment funds introduced by China ranked the fourth in the world, following the U.S., Britain, and Japan. After years of development, China has become one of the major destinations for global cross-border bond investment. The recent market fluctuations have not changed this.

Second, from a global perspective, China has been attracting bond investment on a solid footing. The bond market fluctuation is normal. It is normal to have fluctuations in bond investments in countries, whether in developed or emerging economies. For example, there are often fluctuations in the U.S. Treasury market, which is the world's largest treasury market, when some countries reduce their holdings. We have also observed the fluctuations of bond investments in major countries. By comparison, we found that China's fluctuation is much lower than that of many developed and emerging economies. Judging from the composition of foreign investors and the scale of their bonds, institutions like central banks have always held more than half of China's bonds. Meanwhile, a large part of the rest has been the allocation funds tracking international indexes, which have also been relatively stable.

Third, further opening up the bond market will help improve the foreign exchange market's resilience. In recent years, there has been a steady inflow of cross-border capital, such as trade in goods and direct investment. Such capital has contributed to basic surpluses. The opening up of China's bond market has also diversified the participants and capital resources of the foreign exchange market, which helps to improve China's foreign exchange market and strengthen its capacity to withstand various influences.

We have shared some of our analyses and observations in response to your question. In general, China's bonds not only maintained investment diversification, but also serve the need for capital allocation and are supported by the fundamentals. The total size of China's bond market is $21 trillion, and foreign capital accounts for only about 3% of China's bond market. That means there will be more foreign investment in China's bond market. In the long run, we are confident that foreign investors will steadily increase their holdings of RMB bonds. Thank you.

Jiemian News:

How do you evaluate the profit outflow of foreign companies since the beginning of this year? Compared with previous years, will the pressure of profit outflows increase this year? Thank you. 

Wang Chunying:

Each year, the second and third quarters are the peak seasons for profit remittance of foreign companies. Based on the current situation, profit remittance of foreign companies this year has maintained a reasonable, orderly, and generally stable momentum. Its impact on China's cross-border capital flow and supply and demand for foreign exchange has been controllable. I would like to share with you the following respects in this regard. 

First, the current profit remittance of foreign companies matches the scale of China's investment stock. China's business environment has continued to improve in recent years. Foreign investors are confident in the long-term prospects of the Chinese market. More and more multinational companies invest and do business in China and share the benefits of China's economic growth, reform, and opening up. Furthermore, their profits have been growing steadily, so their profit remittance has been increasing accordingly. From 2020 to 2021, the direct investment stock absorbed by Chinese enterprises increased by an average of 14% annually, and the profit remittance went up by an average of 13% annually.

Second, the impact of profit remittance on the country's international balance of payment and foreign exchange market supply and demand is within a reasonable range. Return on investment (ROI) is part of the current account. There are capital inflows and outflows under the categories of trade in goods, trade in service, and ROI, which have jointly ensured the reasonable and balanced surplus pattern of the current account. Meanwhile, the proper and orderly profit remittance has not influenced the overall balance of foreign exchange market supply and demand at home. In addition, benefitting from the growing internationalization of the RMB and its stable value, a considerable proportion of foreign companies' profits are remitted in RMB, which has a relatively small direct impact on the supply and demand of the domestic foreign exchange market. 

Third, profit remittance does not mean withdrawing the investment but has formed a virtuous cycle with the inflow of direct foreign investment. International investors' willingness to invest long-term in China continues to be strong because China's prosperous economic outlook can bring sustainable and stable returns. Besides the newly added investment capital and the inflow of shareholder loans, many foreign companies have reinvested a considerable proportion of their profits in China. Compared with other major economies, the proportion of profits reinvested by foreign companies in China is high.  

I would like to take this opportunity to stress that the SAFE's policies on profit remittance are consistent and continuous. There are policy guarantees for profit remittance of foreign companies as long as they are conducted in accordance with laws and regulations. Thank you. 

China News Service:

Given the global liquidity tightening, the cost for external financing is on the rise. China's outstanding foreign debt fell in the first quarter. How do you see the risk of deleveraging of China's foreign debt? Thank you. 

Wang Chunying:

According to the latest statistics, China's outstanding foreign debt stood at about $2.71 trillion at the end of the first quarter, down $36.4 billion or 1% from the end of the previous year, which is considered to be a mild change. Due to the impact of the Fed faster tightening of monetary policy and various complex external factors, China's foreign debt will maintain a reasonable and orderly development trend for a period in the future. We believe the risk of deleveraging you are concerned about is controllable in general. I'll provide the following aspects to support my judgment.

First, the growth rate of foreign debt is relatively stable. In recent years, the proportion of China's foreign debt in GDP stood at 14%-16%. The growth rate of foreign debt is in line with economic development, and there is no excessive accumulation. During the current round of the Fed's loose monetary policy, there was no continuous and intensive cross-border funding, which means that there was no excessive leverage of foreign debt. So, the risk of deleveraging is controllable in general. As the external environment is being adjusted, the RMB exchange rate has become more flexible with two-way fluctuation. The exchange rate expectation is relatively stable, so the risk of deleveraging foreign debt is low. 

Secondly, China's foreign debt structure has been continuously optimized. The growth of China's foreign debt has been largely attributed to overseas institutions' investment in domestic RMB bonds, most of which require long-term investment demand. The growth of traditional financing foreign debt is relatively slow. All structures of China's foreign debt types, currency, and debt maturity have been improved. Meanwhile, the balance between external assets and liabilities has improved structurally and continuously. Generally speaking, China remains to be a net foreign creditor with all types of external assets exceeding external liabilities by $2 trillion, which means that the net external claims shown on the International Investment Position for the first quarter of this year was $2 trillion. The combined outstanding external debt of banks, companies, and private sectors had reached $2.1 trillion by the end of the first quarter of this year, accounting for 79 percent of China's full-scale outstanding external debt. Private sectors' external credit assets reached $3 trillion, higher than the external debt taken on by them. The credit assets mainly refer to highly liquid assets such as bonds, deposits, and loans. We believe that with the effective adjustments of the foreign exchange market, the private sector including banks and companies will be able to meet debt obligations and strike a balance between external assets and debts. 

Thirdly, the safety indicators of China's external debt remain sound. As a net-saving country, China's current account has maintained a certain scale of surplus. Being the indicators measuring a country's solvency, the external debt ratio, debt ratio, and debt serving ratio were within the safe zone in accordance with international standards in 2021, and much lower than the overall level of developed countries and emerging market economies. Regarding short-term liquidity, China's foreign exchange reserve ranks first in the world at present, with the ratio of short-term external debt to foreign exchange reserve being 45 percent, much lower than the international warning line of 100 percent.

That's all my response to your questions. For the next step, we will strengthen monitoring and analysis of the external debt situation, effectively preventing possible risks. Thank you. 

Bloomberg:

As the Fed tightens monetary policy, both the yen and the euro have devalued. Against such a backdrop, how do you perceive the outlook of the RMB exchange rate in the second half of this year? Thank you.

Wang Chunying: 

As I just mentioned, the RMB exchange rate was generally stable for the first half of this year, with steady development. Regarding the next half year that you inquired about, the RMB exchange rate will stay basically stable on an appropriate and balanced level. Here are the factors that support this conclusion. 

First, China's economic recovery continues to gather steam with major economic indicators improving. Industrial and supply chains remain stable and will continue playing a fundamental role in the consolidation of the RMB exchange rate.

Second, China's foreign trade and foreign investment show resilience. Trade and investment in the real economy will continue to see net inflows of funds, contributing to the basic balance of supply and demand in the foreign exchange market.

Third, market entities' expectations for the exchange rate remain basically stable. They have kept the rational trading model of "Buy low, sell high."

Moreover, China's structure of external assets and liabilities has been continuously optimized. The scale of foreign exchange reserve remains generally stable, continues to be the first in the world, and remains a stabilizer and cornerstone of the national economic and financial security. It's true that the future tendency of the RMB exchange rate will be partly affected by multiple factors, such as foreign exchange supply and demand and international financial markets. And there could be upward or downward fluctuations in the short term. However, the RMB exchange rate will maintain flexibility and two-way fluctuations while staying basically stable on an appropriate and balanced level. Thank you.

CRI:

What efforts has the SAFE made to better manage foreign exchange risks in the first half of this year? How well did they work? What's the next step? Thank you.

Wang Chunying:

The SAFE has actively supported enterprises to manage foreign exchange risks and served the development of the real economy. As part of our efforts to advance stability on the six fronts and security in the six areas, especially keeping foreign trade and market entities stable, we have adopted a set of measures to cut the cost of exchange rate hedging and enhance enterprises' ability to deal with foreign exchange risks with a focus on the micro, small, and medium-sized enterprises. Next, I would like to briefly introduce some of our key tasks.

First, in April, the People's Bank of China (PBC) and the SAFE jointly issued a document encouraging qualified regions to strengthen cooperation between governments, banks, and enterprises. It encouraged exploring and improving the sharing mechanism for exchange rate hedging costs, expanding the government financing guarantee system, and providing guarantees for enterprises in terms of trade financing and exchange rate hedging business. It also instructed the China Foreign Exchange Trade System to waive inter-bank foreign exchange market transaction fees related to foreign exchange derivatives transactions of micro, small and medium-sized enterprises.

Second, in May, the SAFE issued the "Circular on Measures to Further Promote the Foreign Exchange Market to Serve the Real Economy." We introduced innovative foreign exchange options, launched two types of options products, expanded the business scope of jointly handling RMB and foreign exchange derivatives, and supported qualified small and medium-sized financial institutions to better provide exchange rate hedging services for micro, small and medium-sized enterprises. The Ministry of Commerce, the PBC, and the SAFE jointly issued a document requesting all localities to use the special funds for foreign trade development to provide enterprises with public services such as business training and information services in exchange rate hedging.

Third, we continue to increase publicity and training efforts. To make the relatively specialist issue of foreign exchange hedging more understandable and popular, we compiled the 50,000-word "Guidelines on Enterprise Exchange Rate Risk Management," published on our official website on July 1. You can read it on our official website. The guidelines provide a detailed introduction to the neutral connotation of exchange rate risks, the institutional framework of exchange rate risk management for enterprises, the adaptation scenarios of foreign exchange derivatives, and the use of hedging accounting. At the same time, the document provides targeted guidance on the difficulties existing in the hedging of state-owned enterprises and micro and small enterprises. A number of outstanding enterprise cases are included in the guidelines, based on their practices in exchange rate risk management in recent years. While compiling the guidelines, we paid particular attention to using easy-to-understand words. As a result, the readability is excellent. We hope to provide a valuable reference for foreign-related enterprises' exchange rate risk management.

Thanks to the efforts of all parties, in the first half of this year, the foreign exchange derivatives such as forward options, used by enterprises to manage exchange rate risks, reached $755.8 billion, up 29% year on year. The foreign exchange hedging ratio hit 26%, 4.1 percentage points higher than last year. Nearly 17,000 enterprises registered accounts for exchange rate hedging for the first time. Most of these new accounts are micro, small and medium-sized enterprises, especially the micro and small. These "first-time accounts" are of great significance. Only when enterprises get to know exchange rate hedging, and recognize and understand its benefits will they use it further. Therefore, we support the work to push for "first-time accounts."

Next, we will continue to do targeted work. First, we will release the dividends of the exchange rate risk management policy, break through the existing blockages in implementing the policy, and strengthen the policy transmission to financial institutions. We will urge financial institutions to enhance their initiative and professional level of helping enterprises better hedge exchange rate risks. Second, we will continue to support localities where conditions permit to replicate and promote the successful practices of micro, small and medium-sized enterprises in exchange rate risk management. We will use relevant special funds well and implement the policy of fee reductions and interest concessions. Third, we will take the release of the guidelines as an opportunity to continue to increase cooperation, publicity, and training with state-owned assets, commerce, and other departments. We will use our knowledge to enhance enterprises' awareness of exchange rate risk neutrality. We will assist them in establishing effective exchange rate risk management mechanisms.

Just mentioned are the results of our work in the first half of this year and the key direction for our efforts for the second half. Thank you.

Tianmu News:

In recent years, the deficit of China's cross-border trade in services has continued to narrow. How are you responding to this? Will this deficit increase again in the future?

Wang Chunying:

Trade in services covers many aspects, such as logistics, tourism, intellectual property rights, product processing, financial services, computer information services, and other commercial services. Each kind of trade in services is affected by different factors and projects different growth trends. Since the outbreak of the COVID-19 pandemic, China's cross-border tourism has been primarily affected, but other forms of trade in services have recovered quickly. The prominent features are as follows.

First, the volume of China's cross-border trade in services has surpassed the pre-pandemic level. According to the balance of international payments, China's cross-border services trade balance in 2021 recovered to the 2019 level, and the figure climbed 26% year on year in the first quarter of 2022. Recently, the trade balance of tourism has rebounded due to the demand for overseas study and other factors. Other forms of services trade have also seen steady growth. The trade balance surpassed the 2019 level in 2020, registered a year-on-year increase of 41% in 2021, and continued to rise in the first quarter of this year.

Second, the services trade deficit has narrowed. In the first quarter of this year, the trade deficit of China's tourism sector amounted to $29.4 billion, up by 53% compared with the low level of the same period in 2021, but still lower than the $57.6 billion figure in the same period in 2019. Other services trade has reported a surplus for two consecutive quarters, with the figure in the first quarter of 2022 amounting to $12.8 billion. This is the main reason for the country's narrowing services trade deficit.

Third, China's services trade revenue has increased in recent years, reflecting relevant sectors' improved global competitiveness. China's logistics, computer information, and other commercial services have reported increased export revenue. Specifically, the revenue of logistic services started to grow rapidly in the second half of 2020. This is partly due to the high price of international logistic services. Meanwhile, it also showcases the achievements made by China's logistic sector, which has seized the development opportunities. In the meantime, with the integration of China's manufacturing and service sectors and the digital transformation of its service industry, emerging producer services such as those involved in the commerce and computer information sector is adding new momentum to China's services trade.

In general, the revenue and expense of China's services trade have shown a growing trend since the beginning of this year, with revenue increasing faster, further narrowing the services trade deficit. The development pattern of China's services trade will keep upgrading and changing in the next step. As China's services export competitiveness continues to improve, its services trade revenue will keep growing. Gradually, this will further affect China's services trade deficit.

That concludes my answer. Thank you.

Yicai:

How do you view the future trend of China's foreign exchange settlement in the context of the substantial rate hike by the Fed? What impact will it have on China's cross-border capital flows? Thank you.

Wang Chunying:

Thank you for your questions. This is an issue of common concern. For the cross-border capital flows of economies other than the U.S., the unconventional monetary policy adjustment of the Fed is an essential external variable and has received much attention. The last time the Fed released signals about tightening its monetary policy was in 2013, almost a decade ago. During this time, China's economy has made historic achievements and realized a higher level of development and opening up. Currently, we are more confident and prepared to mitigate the impact of such monetary policy adjustment on China's cross-border capital flows. China's foreign exchange market is likely to maintain a stable operation. Let's look at our development in this regard over the past decade.

First, China has a greater comprehensive national strength, which can help it better respond to external shocks. In recent years, China's economic development has become more balanced, coordinated, and sustainable. China's GDP in 2021 was 2.1 times that of 2012, and its proportion in the global economy increased from 11% in 2012 to more than 18%. The country's economic power, science and technology prowess and comprehensive national strength have all reached new levels. Recently, China has effectively coordinated epidemic prevention and control while striving for economic and social development, major macroeconomic indicators have rebounded relatively quickly, and the economy has generally maintained a momentum of recovery and development. In June, the manufacturing purchasing managers' index (PMI) was above the 50-point mark that separates contraction from growth, consumption and investment have continued to rebound, and economic growth momentum has increased. With the implementation of various pro-growth policies, China's economy will gradually recover and maintain steady growth in the future.

Second, China's balance of payments is more stable, which can better ensure the stability and security of cross-border capital flows. In recent years, the ratio of China's current account surplus to GDP has been around 2%, and always within a balanced and reasonable range. China stands out among major economies in the world in the balance and stability of its international payments. In addition, China's external asset-liability structure has been gradually optimized and the scale of foreign exchange reserves ranks first in the world; the private sector holds nearly 6 trillion dollars in external assets, and the resources to resist external shocks are more diverse and abundant; foreign debt growth matches economic growth, and the stability has been improved. All the foreign debt indicators are within the internationally recognized safety limit, and the risks are generally controllable.

Third, China has promoted a higher level of opening up, which can better expand the depth and breadth of the foreign exchange market. China's business environment has gradually improved, the negative list for foreign investment has been implemented, and more foreign companies have come to invest and start business in China. Meanwhile, the two-way opening-up of China's financial market has increased the types of entities in the foreign exchange market and the types of sources of funds. The depth and breadth of the foreign exchange market have continued to expand, and it is more capable of absorbing or smoothing out the fluctuations in cross-border capital flows, which is conducive to promoting the overall equilibrium of cross-border capital flows.

Fourth, the foreign exchange market adjustment mechanism becomes more mature, which can better play the role of the RMB exchange rate as an automatic stabilizer for adjusting the balance of payments. In recent years, China has pushed ahead with its market-based RMB exchange rate formation mechanism. The RMB exchange rate has been floated both ways, and its flexibility has been enhanced, which can release external pressures in a timely and effective manner. Moreover, as mentioned just now, the transactions of market entities remain rational and orderly, and expectations are generally stable. Enterprises are also becoming more risk-neutral in exchange rates and can better adapt to two-way fluctuations in exchange rates. Therefore, at present, we are more capable of preventing and defusing the risk of cross-border capital flow through market-oriented means.

In addition, we will follow the impact of the Fed's monetary policy adjustment on the US dollar interest rate, exchange rate, and the international financial market. In fact, the Fed is faced with a dilemma between controlling inflation and stabilizing the economy. We will keep up with how the Fed adjusts the monetary policy in the future. We will further coordinate development and security, pay close attention to external changes, assess the impact in a timely manner, and at the same time promote reform and opening up in foreign exchange in an orderly manner to prepare for effective prevention and mitigation of external shocks. Thank you.

Shou Xiaoli:

Thank you, Ms. Wang and friends from the press. That's all for today's press conference.

Translated and edited by Yang Xi, Li Huiru, Qin Qi, Liu Sitong, Zhang Rui, Wang Wei, Zhu Bochen, Zhang Junmian, Wang Yiming, He Shan, Yan Xiaoqing, Ma Yujia, Zhou Jing, Wang Qian, Xu Xiaoxuan, 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:

Tian Yulong, spokesperson and chief engineer of the Ministry of Industry and Information Technology (MIIT)

Tao Qing, a person in charge of the Bureau of Operation Monitoring and Coordination, MIIT

Wang Peng, a person in charge of the Bureau of Information and Communications Administration, MIIT

Chairperson:

Xing Huina, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

July 19, 2022

Xing Huina:

Friends from the media, good morning. Welcome to this press conference held by the SCIO. This is a regular briefing on China's economic data. Today, we are joined by Mr. Tian Yulong, spokesperson and chief engineer of MIIT; Ms. Tao Qing, a person in charge of the Bureau of Operation Monitoring and Coordination of MIIT; and Mr. Wang Peng, a person in charge of the Bureau of Information and Communications Administration of MIIT, to brief you on the development of China's industry and information technology in the first half of 2022, and to take your questions.

Now, let's give the floor to Mr. Tian for his introduction.

Tian Yulong:

Ladies and gentlemen, friends from the media, good morning. I'd like to begin by expressing my heartfelt gratitude to you for your interest in and support for the development of industry and information technology. Next, I'll brief you on the developments in the first half of 2022. 

In the first half of the year, MIIT consistently upheld Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implemented the guiding principles of the Central Economic Work Conference and the arrangements in the Government Work Report, and followed the overall requirements set by the central authorities to "contain the pandemic, stabilize the economy, and ensure safe development." We effectively coordinated pandemic prevention and control with economic development, responded to new risks and challenges brought about by changes in both the domestic and international landscapes, and successfully reversed the declining trend in industrial economic indicators. The industrial economy stabilized and rebounded, showing a recovery momentum and giving full play to its role as ballast for the economy.

First, we made every effort to stabilize the industrial economy and restore its growth. In the first half of this year, we resolutely implemented a package of policies and measures introduced by the central authorities to firmly stabilize the economy, and worked with other parties to produce results at a faster pace. There were four highlights among the main economic indicators. First, industrial production stabilized and recovered quite visibly. From January to June, the added value of industries above designated size grew by 3.4% year on year. Growth registered 0.7% in May after dropping to -2.9% in April, and rose quickly to 3.9% in June, showing a V-shaped trend. Second, the manufacturing sector's share in GDP increased significantly. The added value of manufacturing above designated size grew by 2.8% year on year, accounting for 28.8% of GDP, 1.4 percentage points higher than in 2021. Third, exports played a bigger role in driving growth. The export delivery value of industrial enterprises rose by 10.8% in the first six months of the year. Specifically, growth was 11.1% in May and 15.1% in June after falling to 1.9% in April. Fourth, manufacturing investment maintained a high growth rate. Investment in manufacturing increased by 10.4% year on year, with 7.4% coming in the second quarter, 3.2 percentage points higher than the growth rate of fixed asset investment.

Second, we worked hard to keep key industrial and supply chains smooth. Industrial and supply chains are the lifeblood of industrial economy. The new round of COVID-19 outbreaks had a significant impact on industry and supply chains. In the first half of this year, we took effective measures, and promptly established and implemented a nationwide white list system for enterprises centered on key areas, key industries, key companies and key areas of people's livelihoods while also considering anti-pandemic medical supplies, key supplies for strategic industries and other resources, which helped realize cross-departmental and cross-regional linkage and coordination. By encouraging enterprises on key nodes along the chains to resume work and production, and promoting smooth operation of the industrial economy through nodes driving chains and overall development, we solved more than 54,000 problems through the system and achieved remarkable achievements. At present, China's industrial enterprises above designated size, including 22,500 enterprises on the white list, have achieved stable production, strongly supporting the steady growth of the industrial economy.

Third, the resilience of industrial development continued to grow. In the first half of this year, the added value of high-tech manufacturing rose by 9.6% year on year, demonstrating strong resilience and serving as an important engine for high-quality development of the manufacturing industry. Emerging industries have become an important new driving force for promoting transformation and upgrading as well as strengthening industrial resilience. First of all, we vigorously fostered advanced manufacturing clusters and sped up the development of emerging industries including new-type displays, intelligent photovoltaics and new materials. In addition, we encouraged the introduction of three-year action plans for digital transformation of the manufacturing industry, implemented smart manufacturing projects, and accelerated the development of industrial and supply chains for major equipment. Furthermore, we drew up low-carbon technology roadmaps for key industries and carried out green and low-carbon technology transformation. Also, we organized a nationwide campaign to increase the variety and quality of products and nurture domestic brands, and continued to promote a new round of activities encouraging the use of new energy vehicles and green building materials in the countryside, so as to improve supply and stimulate the vitality and potential of consumption.

Fourth, we redoubled efforts to help small and medium-sized enterprises (SMEs) ease difficulties and stabilize operation. Developing SMEs is an important foundation for stabilizing employment and promoting growth, and a vital task for ensuring market entities. In collaboration with relevant departments, we introduced a series of policies and measures to accelerate the implementation of a package of tax and fee reduction policies. In the first half of the year, nearly 1.8 trillion yuan in additional tax and fee cuts, tax refunds, and postponed tax payments were delivered to SMEs. We took solid and special actions to provide services for SMEs, guarded against and cleared arrears owned to them, and promoted integrated innovation among large, medium and small-sized enterprises, among others. To expedite the step-by-step development of high-quality SMEs, we will strive this year to foster around 3,000 "little giants" (specialized and sophisticated SMEs producing new and unique products) and a group of distinctive SMEs industrial clusters. We will organize comprehensive inspections to reduce the burden on enterprises and promote the development of SMEs. We will not only help SMEs ease difficulties and stabilize operation, but also contribute to their steady and sustained development. In general, the added value of SMEs above designated size grew by 3.7% year on year in the first half of this year, faster than the overall industrial growth rate.

Fifth, we have strongly promoted the integrated and innovative development of information and communications. We have stepped up the development of the information and communications industry, and promoted the deep integration of the new generation of information technology with the real economy. In the first half of the year, the information and communications industry developed steadily. The revenue of the telecommunications industry increased by 8.3%. The revenue of the software and information technology service industry is expected to maintain double-digit growth. Investment in fixed assets of telecommunications grew by 24.6% year on year. We have continued to improve the information infrastructure. More than 1.85 million 5G base stations have been built and put into use. We have accelerated the promotion of integrated applications, advancing the construction of fully connected 5G factories. The industrial internet has been widely applied in various fields of the manufacturing industry. We have launched actions to improve information and communications services, further promoted improvements to internet applications for the convenience of senior citizens and made barrier-free facilities available, so as to improve the well-being of all people, including senior citizens and people with disabilities. We have continued to consolidate the foundation of cybersecurity, making more efforts to prevent and address telecommunications and internet fraud, and maintaining the safe and stable operation of the basic telecommunications network.

Ladies and gentlemen, in the first half of the year, China's industrial economy showed strong resilience and development momentum with enterprise vitality being unleashed, which fully proves that the series of economic policies are paying off under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core. We are confident about and capable of dealing with various difficult challenges, and consolidating and maintaining continuous improvements to the overall industrial economy. Next, we will thoroughly implement the decisions and deployments of the CPC Central Committee and the State Council, make stability our top priority, pursue progress while ensuring stability, promote the high-quality development of industry and information technology, and set the stage for the 20th CPC National Congress with concrete actions.

That is all for my introduction. My colleagues and I are now happy to answer your questions. 

Xing Huina:

Thank you, Mr. Tian. Now the floor is open to questions. Please identify the media outlet you represent before asking your questions.

CCTV:

Due to multiple factors including the pandemic and the Ukraine crisis, industrial production was temporarily impacted in the first half of the year, but has generally shown a trend of stabilization and recovery. How do you see industry's role as ballast for the macroeconomy? What measures will MIIT take to boost the performance of industry in the second half of the year? Thank you.

Tian Yulong:

Thank you for your questions. I just briefly introduced the performance of industry as a whole. Generally speaking, China's industry still faced relatively severe and complex internal and external environments in the first half of this year, and all parties involved have made strong efforts to promote stable economic growth. In the first two months of the year, industry experienced a stable start with growth beyond expectations. Since March, industry has suffered a sudden shock, even seeing a large fluctuation. The CPC Central Committee with Comrade Xi Jinping at its core has steered the development course and acted decisively. The State Council issued a package of policies to stabilize the overall economy, which has provided strong support for stable industrial growth with macro policies. MIIT and relevant departments have given greater prominence to stabilizing industrial growth, stepping up the implementation of measures to ensure stable economic growth. All relevant government departments have coordinated to adopt all possible measures and ensure they produce effects early on. Local authorities have also taken on their responsibilities, actively issuing supportive measures and strengthening their implementation. Enterprises have overcome difficulties to operate at full capacity and ensure stable production. Thanks to all these concerted efforts, the total value-added of industrial enterprises above designated size grew by 0.7% and 3.9% in May and June, respectively. It's worth mentioning that the Purchasing Managers' Index (PMI) for China's manufacturing sector rebounded above the 50-point mark indicating economic expansion in June after contracting for three months in a row, which was by no means easy to achieve. The industrial economy has clearly stabilized and rallied, and given full play to its role as ballast for the macroeconomy. I'd like to elaborate from the following aspects:

First, in terms of the proportion of manufacturing in GDP, in the second quarter, the value-added of manufacturing enterprises above designated size accounted for 28.8% of GDP, up 1.4 percentage points over 2021. This is a very favorable signal. In terms of investment contribution, investment in the manufacturing sector increased by 7.4% in the second quarter, which was 3.2 percentage points higher than the growth rate of fixed asset investment, demonstrating the manufacturing sector's role as the engine driving growth. Industrial exports quickly turned from falling to rising, achieving double-digit growth. The equipment manufacturing sector also rebounded rapidly. In June in particular, it contributed more than 70% of overall industrial growth. The strong performance of the equipment manufacturing sector indicates that its role in the industrial system has gradually become apparent.

In general, in the first half of the year, the industrial economy overcame the shocks and pressure, withstood the challenges, and made hard-won achievements. This should be attributed to the strong leadership of the CPC, the institutional strengths of the socialist system, China's complete industrial system and its super-sized domestic market, and in particular, the series of policies issued by the CPC Central Committee and the State Council to stabilize economic growth. As a result, effective investment has continued to expand, consumption potential has been gradually released, and the internal forces powering economic growth have continued to increase. We believe that the industrial economy will continue to recover. The fundamentals of the industrial economy remain unchanged, and they will maintain long-term growth. Of course, we are also soberly aware that in the face of increased pressure both inside and outside of China, weakening global growth and high inflation will inevitably have an effect on trade demand, the stability of global supply chains, and commodity prices. Therefore, the situation we are facing remains complicated, especially in the second half of the year.

Looking forward, we will continue to follow the decisions and arrangements of the CPC Central Committee and the State Council, make economic stability our top priority and pursue progress while ensuring stability. We will put boosting the industrial economy in a more prominent position, and keep major indicators of the industrial economy within the appropriate ranges so as to create a favorable environment for the 20th CPC National Congress. We will adopt the following measures: First, we will accelerate the solid implementation of a package of policies to stabilize the industrial economy. A package of policies to stabilize the economy, especially those to boost the industrial economy, should be fully implemented. We will support local authorities to issue policies and measures which will produce effects earlier and have greater intensity. We will work with relevant departments to strengthen special supervision of efforts to stabilize industrial growth, monitor major indicators such as the investment and proportion of the value-added of the manufacturing sector in GDP, and establish a sound notification system. We will continue to enhance explanations of policies and ensure all kinds of enterprises can benefit from the policies, so as to strengthen their confidence in development, and boost market expectations.

Second, we will encourage more investment and consumption. The 14th Five-Year Plan is already in the works, and a batch of pillar projects and technological upgrade programs have already been launched. The new types of information infrastructure projects should begin as soon as possible, especially in 5G, gigabit optical networks and industrial internet. Meanwhile, we will enhance the driving force to encourage consumer spending. I mentioned earlier the campaign to promote the consumption of quality products nationwide and the programs that bring new energy vehicles and environment-friendly construction materials to rural areas. We will also nurture cities that play a demonstrative role in information consumption. In a word, a series of measures will be taken to promote consumption and investment.  

Third, we will keep industrial and supply chains stable and smooth. A crucial step is focusing on key regions, industries and enterprises, and helping enterprises stabilize production and reach the output goals. Regarding the prices of key products, we have established a "red-yellow-blue" three-tier warning system to ensure the supply of major commodities and upstream raw materials. We will also work to ensure the supply of fertilizers during summer, autumn, and winter. 

Fourth, we will increase our efforts to help SMEs tide over difficulties. Generally speaking, SMEs still face difficulties in their operation. We will prevent and resolve debt incurred by SMEs through special campaigns, particularly comprehensive inspections, to ease SMEs' burdens and promote their development. We will also improve our service system for SMEs, increase our supportive policies, and provide more precise services. SMEs now need more targeted policies to be implemented and effective. Therefore, we will work on that in the year's second half. Thank you. 

Tianmu News:

You mentioned the digital economy a while ago. The scale of the digital economy has been rising in China, with its proportion to the country's GDP increasing continuously. I wonder what steps will be taken by the MIIT to promote its rapid growth. Thank you.  

Wang Peng:

Thank you for your questions. General Secretary Xi Jinping attaches great importance to the development of the digital economy and has made important instructions on several occasions. Following the decisions and arrangements of the CPC Central Committee and the State Council, the Ministry of Industry and Information Technology has sought to work on weaknesses and build the strength of industries, ramped up our innovation capabilities, and has made positive progress in the deep integration of digital technologies and the real economy. China's digital economy has ranked second in the world for years, and its contribution to the country's economic growth has been rising. Let me introduce it briefly from two dimensions. First, the size of the digital economy has expanded continuously. In the first half of the year, the "contactless economy" such as online shopping, online education, and telemedicine saw faster development. The digital economy maintained a sound momentum, injecting strong vitality into economic growth. From January to June, the total revenue of the electronic information manufacturing industry, software industry, communications industry, and the internet surpassed 10 trillion yuan. These industries showed steady and positive momentum, and industry resilience continues to rise. Second, the digital transformation of industries has become faster. We worked to deepen the integration of the new generation of information technology and manufacturing industry, and the industrial internet has seen more solid, innovative development. The "5G+Industrial Internet" 512 Project forged ahead, which already has over 3,100 projects under it, and 700 were newly added in the second quarter of this year. We also implemented the intelligent manufacturing program, nurturing over 6,000 solution providers and covering more than 90% of the manufacturing sector. The numerical control rate of core procedures in industrial enterprises above the designated size reached 55.7%, and the popularization rate of digital research and design tools reached 75.1%. Traditional industries saw the faster process of digital transformation. 

Next, the Ministry of Industry and Information Technology will work on the following five aspects to build a sound policy environment for the digital economy. 

First, we will work on core technologies to promote the innovation and development of the digital industry. We will thoroughly implement the innovation-driven development strategy, seek to become independent in key and core technologies, make breakthroughs in the bottleneck of crucial sectors, and cultivate competitive companies that can dominate in their respective ecosystems to increase the resilience and competitiveness of industry and supply chains. 

Second, we will optimize the internet layout and quicken the development of new types of digital infrastructure. We will actively expand the construction of the 5G network and gigabit optical network as appropriate, implement the innovative development program of industrial internet, and map out the construction of intelligent, environment-friendly data and computing facilities. 

Third, we will promote the integration of the digital economy and the real economy, considering the needs of industries. We will extensively carry out the initiatives of the manufacturing sector's digital transformation and SMEs' digital empowerment. We will also expand the application scenarios of industrial big data, cultivate a batch of SMEs with high growth potential, advanced technology and strong market competitive edge as well as single-product specialists in the manufacturing industry, and build a landscape where small, medium, and large-sized enterprises develop together. 

Fourth, we will stimulate the vigor and potential of data factors to increase the economy's driving force. We encourage centrally administered state-owned enterprises and internet companies to make transparent their data that are needed by the market. We will also select several regions and industries to carry out pilot programs on the national data management standard to increase data supply nationwide and its quality. We will also issue guidance on data factor application scenarios and ensure the smooth circulation of data factors. 

Fifth, we will strengthen the governance of the digital economy to create a healthy ecosystem for its development. We will work on institutions, supervision, and security to improve our governance capabilities in the digital economy. We will deepen international cooperation on the digital economy, join hands to build an open, equal, just, and non-discriminatory environment for the digital economy, and facilitate the building of a community with a shared future in cyberspace. Thank you.  

Xinhua News Agency:

The consumer goods industry is closely linked with people's well-being and is a traditional advantageous industry in China, and it is also the supply foundation for expanding domestic demand. My question is, how will the MIIT promote the high-quality development of the consumer goods industry and increase its role in propping up the entire industrial economy? Thank you. 

Tao Qing:

Thank you for the questions. The consumer goods industry covers all aspects of people's lives, including clothing, food, housing, daily necessities, transportation, childcare, education, health care, and elderly care. It also plays a vital role in creating employment, boosting export, and promoting economic growth. Most of China's consumer goods sectors have become market-based. They entered the international market early and have a solid ability to survive. From January to June this year, the value-added of the consumer goods industry increased by 4.6% year on year, demonstrating strong development resilience. Recently, the MIIT, in collaboration with other relevant departments, issued guidelines on the high-quality development of chemical fibers, industrial textiles, and light industries. We also issued policies such as an action plan on leveraging the role of digitalization to help the consumer goods industry increase the variety of products, raise their quality, and build brands. These efforts will deepen the supply-side reform and promote the industry's high-quality development. Going forward, we will focus on increasing the variety of products, raising their quality, and building their brands. We will take measures on both the supply and demand sides, and continuously improve the supply capacity of consumer products and services. We will strengthen areas of weakness, push ahead with industry upgrading, enhance sustainability, promote people's wellbeing, and meet people's needs for a better life.

The first is to promote consumption upgrades through innovative products. Focusing on health care, elderly care, childcare, home life, and other areas related to people's wellbeing, we will encourage enterprises to integrate customization, experience, environmental protection, intelligence, fashion, and other new consumer elements into their product design and manufacturing. We want them to create new demands through innovation and foster new businesses, scenarios, models, and growth engines to meet consumers' needs for multi-level, personalized, high-quality products and services.

The second is to bolster consumer confidence by improving supply. In clothing and textiles, home appliances, food and medicine, and other sectors, we will move faster to build factories demonstrating smart manufacturing, and achieve quality control throughout the life cycle and coordinated development of production, sales, and usage. We will accelerate the building of a quality traceability system for key consumer goods and optimize information inquiry services so that consumers can buy products confidently, use them with peace of mind, and have ever stronger confidence in consumption.

The third is to drive consumption growth with high-quality brands. To further leverage the role of consumption in sustaining growth, in the third quarter, the MIIT focused on the campaign to enhance product variety and quality and create name brands. We organized relevant local governments, departments, industry associations, and e-commerce platforms to hold special promotions, special exhibition tours, and industry activities. The aim was to strengthen the publicity of excellent enterprises and products, launch good products, build brand reputation, and promote stable growth. Thank you! 

The Paper:

The problem of poor connection between industrial production and sales still exists, and enterprises in some sectors face difficulties. What measures will the MIIT take to keep the performance of industry stable? Thank you.

Tao Qing:

Thank you for your question. Unexpected factors at home and abroad have taken a short-term toll on industry since March, but industry has gradually recovered since May with the implementation of policies and measures to stabilize the economy. From the perspective of sectors, the recovery featured several characteristics. First, the production of most sectors has rebounded. Among the 41 major sectors, the value-added of 33 registered positive growth in the first half of the year, of which nine achieved double-digit growth. In May and June, the value-added of 33 and 27 sectors grew faster than the previous month. Second, critical industrial and supply chains recovered at a more rapid pace. After a brief decline in April, the value-added of equipment manufacturing, which was hit hard by the epidemic, returned to positive growth in May, and the growth rate reached 9.2% in June. In particular, the recovery of the industrial and supply chains of the automobile industry was more prominent. With a substantial increase of 16.2% in June, the value-added of automobile manufacturing reversed the previous month's decline of 7%, which effectively drove the overall industrial growth. Third, high-tech manufacturing continued its growth momentum. In the first half of the year, the value-added of high-tech manufacturing increased by 9.6% year on year, significantly higher than that of overall industry. In particular, the value-added of electronics manufacturing increased by 10.2%, maintaining double-digit growth, and the trend of transformation and upgrading remained unchanged. Fourth, some energy and raw material sectors maintained rapid growth. We have redoubled our efforts to keep supply and price stable. In the first half of the year, the value-added of the mining industry increased by 9.5% year on year, of which the growth rate of the coal industry exceeded double digits, and the output of potash fertilizer increased by 9.4%. Fifth, we have taken strong measures to effectively ensure the supply of products essential to people's daily life. In the first half of the year, the value-added of the alcohol, beverages, and refined tea sector increased by 8.4% year on year. The production of food, agricultural and sideline products, and other industries grew steadily, and the supply of daily necessities was adequately guaranteed.

At the same time, we must see that the operation of enterprises in different industries varies due to differences in the industrial development cycle and the epidemic's impact. Some mid- and downstream sectors face pressure from high and fluctuating prices of bulk raw materials and low market demand. The recovery of some consumer goods sectors is lagging. SMEs are still facing difficulties in production and operation. In the next step, we will focus on enterprises and industries with problems, have clear priorities, and take category-based measures. We will facilitate the smooth circulation of industrial and supply chains, move faster to ensure stable production and reach output targets, and step up efforts to ensure the supply and price of energy and raw materials remain stable. We will boost industrial investment and consumption demands, implement targeted policies to ease the difficulties of enterprises, continuously enhance the balance and stability of the recovery and development of industry, and continue to consolidate the foundation for industry's steady recovery. Thank you! 

BeijingNews.com.cn:

The new energy vehicle (NEV) industry is a bright spot in the year's first half. Earlier, the MIIT said it was studying whether to continue the preferential policies of purchase tax for NEVs. Is there any progress made in this regard? What is the next step to promote the consumption of NEVs? Thank you.

Tian Yulong:

Thank you for your questions. This year, the development of the NEV industry has attracted wide attention. As it is closely related to the life of ordinary people, our enterprises have overcome the epidemic's impact to achieve steady and rapid development, which is also noticeable worldwide. There are three main highlights:

First, the production and sales have reached a new high. The latest data showed that 590,000 vehicles were produced and 596,000 were sold in June, each rising 1.3 times year on year. The numbers reached 2.661 million and 2.6 million respectively in the first half of this year, both up 1.2 times year on year. The production and sales scale has hit a record high, with a market penetration rate of 21.6 percent.

Second, fresh breakthroughs have been made in technological innovation. The newly developed laser radar, homemade chips, and vehicle-borne basic computing platforms have been loaded into vehicles, with technological innovation constantly improving. Batteries have also witnessed breakthroughs with such highlight indicators: the energy density of mass-produced ternary batteries reached the world's highest level of 300 Wh/kg, and cobalt-free batteries topped 240 Wh/kg. Semi-solid-state batteries are close to mass production; therefore, we have strong competitiveness in NEV power batteries.

Third, the upgrading of supporting systems has been accelerated. In the first half of this year, 1.3 million new charging/ battery swap facilities were added, up 3.8 times year on year, including 920,000 private EV charging piles and 380,000 public ones. The building of public facilities is critically important as the demand for NEVs is growing stronger. More than 10,000 power battery recycling service sites have been built, realizing the nearby recovery of retired batteries, which is convenient for users. 

The issue of the purchase tax exemption you have mentioned is of public concern and highly valued by the State Council. The Standing Committee of the State Council has asked the relevant departments to study the issue of extension of the purchase tax exemption for NEVs in light of the actual situation. Currently, the relevant departments are expediting studies to release the relevant policies as soon as possible.

In general, China's NEVs have entered a rapid stage of development. Stabilizing and expanding NEV consumption is a significant way to ensure the stable development of the automobile industry, which is also an important part of our work in the future. In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we will work with relevant departments to further expand NEV promotion to boost automobile consumption, contributing to the overall stability of the economy. Our work will focus on the following aspects. First, we will continue to improve the quality of products by constantly improving the technical safety standards of NEVs, raising the performance level of the related power batteries, including out-of-control alarm, safety protection, low-temperature adaptability, and other performance levels, so that consumers can buy and use them with confidence. At the same time, we should accelerate the integrated development of electrification and intelligent networking and develop more services that can meet consumers' needs, to improve the driving experience and add a modern touch. On the other hand, we should create a favorable environment for use, strengthen industrial monitoring, and strive to keep the supply and prices of automobile chips and upstream raw materials stable, which will have a great impact on the automobile industry. We will ensure stable supply and prices and make every effort to keep industrial and supply chains stable and smooth. We will implement the State Council's requirement to steadily boost the consumption of automobiles and other bulk commodities and encourage localities and regions where conditions permit to introduce substantive policies to boost consumption. We will make concerted efforts to organize a new round of campaigns to promote NEVs in rural areas, electrify all public facilities in pilot cities, accelerate the construction of charging/ battery swap facilities, foster information sharing and unified settlement to coordinate NEVs consumption, safe driving and the stable development of the whole industry. Thank you. 

PPTN (People's Posts and Telecommunications News):

In recent years, the industrial internet has played an important role in helping enterprises resume work and production and promoting digital transformation. What progress has been made in the integrated application of the industrial internet during the first half of this year? What plans and measures will be taken in the year's second half?

Wang Peng:

Thanks for your questions. The CPC Central Committee and the State Council attach great importance to the development of the industrial internet. This year marks the fifth year for us to implement General Secretary Xi Jinping's important instructions and further carried out the innovative development strategy of the industrial internet. Generally speaking, the systematic development of China's industrial internet has achieved remarkable results, which provided strong support for the digital transformation of the economy and society.

Since the beginning of this year, we have accelerated the development of the industrial internet in accordance with the requirements of the central government's work report, and made new progress in all aspects. I will give you a brief introduction from the following four aspects. First, the network has a more solid foundation. The number of "5G+Industrial Internet" national projects increased by 700 in Q2, bringing the total number to over 3,100. An analysis system for industrial internet identification has been basically constructed. The average daily resolution volume of national top-level nodes increased significantly, reaching 150 million. The second-level nodes have covered 34 key industries and 29 provincial-level regions across the country. Second, the platform system is blooming. More than 150 featured platforms with industrial and regional influence have been established, and 28 cross-industry and cross-field industrial internet platforms have been selected. The number of industrial equipment connected to key platforms now exceeds 79 million, and the number of industrial apps exceeds 280,000. Third, the security guarantee has been optimized simultaneously. A technical monitoring and service system has been basically established to coordinate work at the national and provincial levels as well as those to do with enterprises, and its institutional construction, technical means, and service capability have been improved simultaneously. Fourth, integration and empowerment have been accelerated. The industrial internet has been applied in 45 major national economic categories and has been constructed in industrial bases, industrial parks, and key enterprises. Its industrial scale exceeded one trillion yuan, which empowers the capabilities, value, and wisdom across all industries. 

Next, we will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, issue new policy measures for specific guidance, and upgrade the industrial internet. Efforts will be made in the following three aspects. First, we will focus on key links in industries and enhance our innovation capacity. We will further carry out innovation and development projects of the industrial internet, promote the integration of industrial internet demonstration projects, and concentrate on equipment connectivity, data innovation and application, equipment and platform security, and other key areas. A number of demonstration projects will be arranged, a series of urgently-needed standards will be formulated, and a batch of landmark results will be spread. Second, we will focus on key transformation areas and widen industrial applications. Factories fully connected with 5G in key industries will be constructed to accelerate the expansion of 5G from a supporting role during production to a core role. We will establish digital transformation centers of the industrial internet, improve the layout of public service innovation carriers, and accelerate large-scale applications and promotion. A series of application reference guides and safety protection guides will be compiled for different industries to provide guidance for enterprises. Third, we will focus on the application ecosystem and strengthen the synergy between supply and demand. "5G+Industrial Internet" on-site meetings will be organized for both information and communication enterprises and industrial enterprises to work together. In-depth activities will be increased to promote industrial internet applications in industrial parks and county economies. We will give full play to the industrial internet working group and take multiple measures to deepen industry-finance cooperation and industry-education integration. Thank you. 

China Daily:

Due to the impact of the international environment and the domestic COVID-19 epidemic, downward pressure on the economy has continued to mount this year. However, we have noticed that the information and telecom industry has maintained overall stability and become a bright spot for economic development in H1. Please give us an introduction to the development of the information and telecom industry. Thank you.

Wang Peng:

Thanks for your question. In H1, we earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council, remained committed to the general principle of pursuing progress while ensuring stability, and tried our best to overcome the impact of the epidemic. We accelerated the integration of information and telecom technology through all sectors of the economy and society, and consolidated healthy trends toward stable growth for the industry.

First, emerging growth drivers continued to grow. In H1, the total volume of the telecom businesses grew by 22.7% year on year, and their revenue increased by 8.3%, 5.8 percentage points higher than GDP growth, contributing significantly to economic growth. The industry structure has been optimized, and emerging businesses, including internet data centers, big data, cloud computing, and the Internet of Things became important driving forces. In H1, the revenue of emerging businesses reached 162.4 billion yuan, up 36.3% year on year, accounting for 19.9% of the entire industry. The industrial transformation has achieved remarkable results.

Second, our supporting role became prominent. From the vantage point of network construction, infrastructure stayed ahead. The integration of a "double gigabit" network further advanced, covering 400 million households with gigabit optical fiber networks. A total of 1.854 million 5G base stations were established and opened, 300,000 of which were newly opened in Q2. We made the realization of "5G access to every county and broadband access to every village." The number of national-level internet backbone direct connection points reached 19, while network delay and packet loss rates dropped significantly. From the vantage point of serving social development, the empowerment of integrated application accelerated. We sped up the integrated application of 5G and gigabit optical fiber networks in industry, medical care, education, transportation, and other fields. The number of 5G application cases exceeded 20,000. The industrial internet has been expanded in industrial clusters, green, low-carbon, safe production, and other sectors, creating many new benchmarks at the workshop level, enterprise level, and cluster level.

Third, domestic demand has been expanded to help unleash potential. In terms of investment, in H1, fixed-asset investment in telecommunications reached 189.4 billion yuan, up 24.6% year on year, 18.5 percentage points higher than the national growth rate of fixed-asset investment (excluding rural households), which created new growth in communication manufacturing, internet, and software services amid the epidemic. In terms of consumption, mobile internet traffic increased by 20.2% year on year. Online applications such as online office work, livestreaming, online food delivery, and short videos flourished, and information consumption continued to expand and upgrade.

Fourth, digital facilities to benefit the people have become more robust. It is mainly reflected in the following three improvements. First, user service awareness has been improved, and basic telecom enterprises have realized cross-regional handling of common telecom services such as the "Family Network." Meanwhile, 33 key internet companies have established manual customer service hotlines, and 137 companies are connected to the internet information service complaint platform. Second, information accessibility has improved, and the aging-friendly transformation of internet applications has been further advanced. For example, 452 websites and apps completed the aging-friendly transformation and passed the test and evaluation. Third, the protection of user rights and interests has been improved, and a total of 6.3 million app tests have been completed, realizing the full coverage of apps on the shelves of mainstream application stores in China, and app management capabilities have been significantly enhanced.

Next, the MIIT will continue to accelerate network construction and integrate innovative applications following the decisions and arrangements of the CPC Central Committee and the State Council and continuously promote the high-quality development of the information and communication industry. The first is to clear the information artery, deepen the joint construction and sharing of 5G, and continue to improve the depth and breadth of "dual-gigabit" network coverage. We will continue to promote universal telecom services and strive to build 600,000 5G base stations this year, with more than 2 million total. The second is to cultivate new momentum for development. We will accelerate the promotion and upgrading of the industrial internet, promote the pilot demonstration of the industrial internet in an integrated manner, and implement the "10, 100, and 1000" program of 5G industry applications. This will mean selecting 10 vertical industries, with each industry forming 100 benchmarks, and building 1,000 5G industry virtual private networks, to help the digital transformation of the industry. The third is to enhance people's sense of gain. We will further implement the aging-friendly transformation and upgrading projects on internet applications, strengthen the protection of the rights and interests of telecom and internet users, further regulate the operating behavior of basic telecom companies and internet companies, and create a favorable environment for information consumption. The fourth is to build up a safety fence. We will improve the capabilities of internet service and emergency response, strengthen cybersecurity guarantee, improve the security management system in the integrated fields of the industrial internet and the internet of vehicles (IoV), and promote the accelerated development of cyberspace security industry. Thanks! 

Yicai:

The stability of the industrial and supply chains is crucial for recovering the industrial economy. What measures has the MIIT taken in the first half of this year to ensure the stability and smoothness of the industrial and supply chains? In the second half of the year, what other considerations are there in promoting enterprises to reach stable production and reach the target output? Thank you.

Tao Qing:

Thank you for your questions. The industrial and supply chains are the backbone and blood vessels of the industrial economy. Since March, they have been affected by the COVID-19 epidemic and other factors. The supply chain and the industrial chain have faced many blockages, causing some industrial enterprises to stop work and production. The MIIT resolutely implements the decisions and arrangements of the CPC Central Committee and the State Council, following the overall requirements of preventing the epidemic, stabilizing the economy, and developing safely, and regards a smooth industrial chain and supply chain as the primary task for ensuring stable industrial growth, and has taken a series of measures in conjunction with relevant departments and localities to make every effort to ensure the stable and smooth industrial chain and supply chain.

First, we are focusing on key areas and sparing no effort to get through the blocking points. We first established a daily scheduling mechanism for key provinces and cities to coordinate and solve problems such as obstruction of logistics and transportation and poor connection between upstream and downstream. We dispatched front-line working groups to strengthen cross-regional coordination, and perform closed-loop management and stabilize production under the conditions of ensuring epidemic prevention and control in key regions.

Second, we focus on key enterprises to establish and implement a "white list" system. Focusing on key fields such as medical and epidemic prevention materials, necessities of life for residents, important materials for agricultural production, and key materials for strategic industries, we have released a "white list" of key enterprises to unblock key nodes in the industrial chain and supply chain. At the same time, we have guided more than 20,000 companies on the white list in various regions to achieve regional mutual recognition and promote the coordinated resumption of work and production.

Third, we are focusing on key industries and promoting the upstream and downstream to dock their services. We have built a coordination platform for key industrial chains and supply chains for automobiles, integrated circuits, medical supplies, etc., established a "red light" early warning mechanism for auto companies whose spare parts inventory can last less than three days, and established a "red, yellow and blue" early warning coordination mechanism for bulk raw material supply, etc.. We did these in order to solve the problems reported by enterprises one by one, such as raw material supply, employees returning to work, as well as logistics and transportation issues. Just as Mr. Tian introduced, the national industry and information system have coordinated and solved more than 54,000 problems and demands from enterprises in a timely manner, helping the upstream and downstream to resume work and production synchronously.

With the joint efforts of various regions and departments, the industrial chain and supply chain have become increasingly smooth, and the industrial economy has quickly reversed the downward trend and achieved growth recovery. At present, industrial enterprises above the designated size in the Yangtze River Delta and Pearl River Delta regions have resumed normal production, and the production capacity of key industrial chains such as automobiles and integrated circuits has also fully recovered. In the next step, the MIIT will thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council, efficiently coordinate epidemic prevention and control and industrial production, and further promote enterprises to stabilize the production and reach the target outputs. First, we will strengthen the monitoring of the operation of key regions, key industries, and key enterprises. Based on the whitelist enterprises in the key industrial chains and supply chains, we will pay close attention to ensuring the implementation of details of various service guarantees and promote key enterprises to stabilize the production and reach the target outputs, which will see a full recovery of production capacity. Second, we will guide the regions where the epidemic occurs to implement the COVID1-19 prevention and control measures in the production process, effectively implement the stable production plan and emergency plan, and ensure stable production under the conditions of epidemic prevention and control. After the impact and experiences in March and April, many enterprises and localities promptly formed their own emergency plans. We are also very confident that we can quickly achieve closed-loop management and stable production under any shock waves. Third, we will further improve the coordination platform of key industrial chains and supply chains and improve the "red, yellow, and blue" early warning coordination mechanism for the supply and demand of bulk commodities. We will strengthen the supply of automotive chips, promote inter-regional, upstream-and-downstream coordination and interaction, and ensure key industrial chains and supply chains are stable and smooth, such as automobiles and integrated circuits. Thank you! 

Southern Metropolis Daily:

Some micro-, small- and medium-sized enterprises (MSMEs) that COVID-19 has severely hit are facing greater difficulties in operation. What measures have you taken to support MSMEs in the year's first half, and what are the next steps? Thank you.

Tian Yulong:

Thank you for your question. As you said, MSMEs have always drawn public attention. They have been affected by the epidemic and the combination of various factors. The CPC Central Committee and the State Council have attached great importance to the issue and made a series of policies intensively. You may have seen them in the newspapers. These combined policies include tax incentives, improvement of the standard of subsidies given to businesses that reduce layoffs, solving financing problems, and reduction and exemption of property fees and rent. These measures have played a significant role in the relief and assistance of MSMEs. According to the latest data, as of June 25, China's tax refunds, as well as tax and fee cuts and deferrals, reached 2.58 trillion yuan, with the beneficiaries being MSMEs. The CPC Central Committee and the State Council have relieved the burden on MSMEs so they can tide over difficulties.

As a department responsible for providing comprehensive service for small- and medium-sized enterprises (SMEs), the MIIT and relevant departments have implemented the deployment of the CPC Central Committee and the State Council and taken multiple measures to help MSMEs overcome difficulties. Now we can see that these measures work well.

First, we have promoted introducing and implementing various policies that benefit enterprises. The State Council's leading group on developing SMEs has held several meetings to study relevant issues. "Several Measures to Help Micro-, Small- and Medium-Sized Enterprises Relieve Difficulties," which comprises 10 specific measures in four areas, was issued by the MIIT to solve the problems faced by MSMEs. At the same time, we have implemented the measures issued by the State Council to stabilize the economy and further strengthen the relief and support for MSMEs. All regions and departments have worked together to implement measures and policies so that MSMEs can get the benefits as soon as possible and have a sense of fulfillment. Meanwhile, we will work with relevant departments to carry out comprehensive inspections on implementing these policies and reduce the burden on enterprises, promote and guide local governments to increase the implementation of policies, benefit MSMEs, help them overcome difficulties, and develop as soon as possible.

Second, we have mobilized the forces of all parties to increase services for SMEs. The key to the implementation of the policy is to provide good service. We have launched two campaigns nationwide: one is "Service Month for SMEs," and the other is "Benefiting Enterprises Together." In collaboration with local authorities, we have made known these preferential policies to enterprises, industrial parks, and industrial clusters to ensure that MSMEs can have access to the policies, technologies, and management techniques so that their businesses can recover from a difficult situation as soon as possible. From January to June, various SME service agencies organized multiple activities such as policy publicity, coordination, and assistance. More than 20 million services have been delivered, showing our considerable efforts in this field. Businesses can feel the benefits and have a better sense of fulfillment.

Third, we have focused on improving the ability of SMEs. We should not only help them solve difficulties but also promote their long-term development. The development of SMEs is also vital in stabilizing employment and economic growth. We have established a system for cultivating SMEs of various types in phases, including innovative SMEs, specialized and sophisticated SMEs that produce new and unique products , and "little giants" (small enterprises in their early stage of development and focusing on high-end technologies). We have carried out a campaign, "Act Together," to promote the cooperation of large enterprises and SMEs in the upstream and downstream so that they can make progress together. MSMEs have accelerated technological transformation and digitalization to enhance their core competitiveness and technological innovation capabilities. Recently, together with the Ministry of Education and China National Intellectual Property Administration, the MIIT launched a campaign to promote cooperation between colleges and universities and MSMEs and sped up the commercialization and application of technological achievements made in colleges and universities. These efforts are of great significance, enabling SMEs to have more sources of innovation and receive more support.

Fourth, efforts have been intensified to get outstanding payments owed to SMEs cleared. We have focused on this work in recent years. By carrying out certain actions to prevent and resolve overdue payments, we have focused on resolving existing arrears while strictly preventing new arrears. We have constantly been improving long-term mechanisms and established relevant channels for handling complaints concerning outstanding payments in all provinces to ensure that SMEs have convenient access to make a complaint and get timely responses. We have improved the mechanism of complaint acceptance and transfer, follow-up, and supervision and protected MSMEs' legitimate rights and interests.

Next, we will scale our efforts in the above four areas and work with relevant departments to implement policies and measures, mobilize resources and strengths from all parties, and strengthen publicity and services. We will pay close attention to the development of SMEs and make policy reserves. We will continuously improve the service system and improve the service level. We will combine aiding and cultivating SMEs to encourage them to innovate, transform, upgrade, improve quality and efficiency, and grow stronger. We will strengthen the protection of SMEs' rights and interests so that they can overcome the current difficulties as soon as possible and achieve stable and healthy development. This is the top priority of our current and future work, and we hope to receive strong support from all walks of life. Thank you.

Xing Huina:

If you don't have any more questions, that's all for today's press conference. Thank you to the three speakers and friends from the media. Goodbye, everyone.

Translated and edited by Zhang Liying, Chen Xia, Zhang Tingting, Liu Qiang, Zhang Rui, Liu Sitong, Wang Yiming, Li Huiru, Wang Qian, Xu Xiaoxuan, Yang Xi, Huang Shan, Zhang Lulu, Lin Liyao, 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

Speaker:

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

Chairperson:

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

Date: 

July 15, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the SCIO. Today, we will continue the regular release of economic data. We have invited Mr. Fu Linghui, spokesperson of the NBS and director general of the Department of Comprehensive Statistics of the NBS, who will introduce China's economic performance in the first half of 2022 and answer your questions.

Now, I would like to give the floor to Mr. Fu for his introduction.

Fu Linghui:

Friends from the media, good morning. As per usual practice, I will first brief you on the main economic indicators and the performance of the national economy in the first half of 2022, and then answer your questions.

Strong measures have been adopted to counter the impact of unexpected factors, and the national economy has registered a stable recovery.

Since the beginning of this year, the increasingly complicated and challenging international environment, as well as multiple, sporadic domestic outbreaks of COVID-19, have led to extremely unusual economic development with a significant increase in adverse impacts. The economy in the second quarter was under noticeable downward pressure with serious impacts from unexpected factors. Faced with extreme complexities and difficulties, 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 thoroughly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, effectively coordinated COVID-19 countermeasures with economic and social development, stepped up macro policy adjustments, and effectively implemented a package of policies and measures to boost stability. As a result, the resurgence of the pandemic was contained, the national economy registered a stable recovery, production and demand saw improving margins, market prices were generally stable, people's livelihoods were sufficiently protected with robust steps, the momentum of high-quality development was sustained and overall social stability was maintained.

1. The national economy realized positive growth in the second quarter despite downward pressure.

Major economic indicators plunged in April. Faced with new growing downward pressure, the CPC Central Committee and the State Council made sound decisions and took timely measures, implemented the policy measures of the Central Economic Work Conference and the Government Work Report early on, instead of deploying indiscriminate stimulus spending, rolled out a package of pro-stability policy measures according to the general guidelines and policy direction, and held a national teleconference to make arrangements on maintaining stable macroeconomic performance. The policies soon took effect. The decline of major economic indicators narrowed in May. The economy registered a stable recovery in June and achieved positive growth in the second quarter. According to preliminary estimates, China's gross domestic product (GDP) in the first half of the year was 56.26 trillion yuan, up by 2.5% year on year at constant prices. By industry, the value added of the primary industry was 2.91 trillion yuan, up by 5% year on year; the secondary industry 22.86 trillion yuan, up by 3.2%; and the tertiary industry 30.49 trillion yuan, up by 1.8%. Specifically, GDP for the second quarter was 29.25 trillion yuan, up by 0.4% year on year. By industry, in the second quarter, the value added of the primary industry was 1.82 trillion yuan, up by 4.4% year on year; the secondary industry 12.25 trillion yuan, up by 0.9%; and the tertiary industry 15.18 trillion yuan, down by 0.4%.

2. Summer grain witnessed a bumper harvest and animal husbandry grew steadily.

In the first half of this year, the value added of agriculture (crop farming) grew by 4.5% year on year. The overall output of summer grain was 147.39 million metric tons, 1.43 metric million metric tons higher than that of last year, an increase of 1%. The structure of crop farming continued to be optimized, as the sown area for cash crops like rapeseed increased. In the first half of this year, the output of pork, beef, mutton and poultry was 45.19 million metric tons, up by 5.3% year on year. Specifically, the outputs of pork, beef and mutton rose by 8.2%, 3.8% and 0.7%, respectively, and poultry was down by 0.8%; that of milk rose by 8.4% and eggs increased by 3.5%. In the second quarter, the output of pork, beef, mutton and poultry increased by 1.6% year on year, of which pork was up by 2.4%. By the end of the second quarter, the number of pigs registered in stock was 430.57 million, down by 1.9% year on year, among which 42.77 million were breeding sows; and 365.87 million pigs were slaughtered, up by 8.4%.

3. Industrial production steadily recovered and high-tech manufacturing enjoyed fast development.

In the first half of this year, the total value added of industrial enterprises above designated size grew by 3.4% year on year. In terms of sectors, the value added of mining increased by 9.5% year on year; that of manufacturing increased by 2.8%; and the production and supply of electricity, thermal power, gas and water increased by 3.9%. The value added of high-tech manufacturing went up by 9.6% year on year, 6.2 percentage points higher than that of industrial enterprises above designated size. In terms of ownership, the value added of state holding enterprises grew by 2.7% year on year, that of share-holding enterprises grew by 4.8%, that of enterprises funded by foreign investors and investors from Hong Kong, Macao and Taiwan fell by 2.1%, and that of private enterprises grew by 4%. In terms of products, the production of new-energy automobiles, solar cells and mobile communication base stations grew by 111.2%, 31.8% and 19.8% year on year, respectively.

In the second quarter, the total value added of industrial enterprises above designated size was up by 0.7% year on year. Specifically, that in April went down by 2.9% year on year; that in May shifted from negative to positive and was up by 0.7%; and that in June increased by 3.9%, 3.2 percentage points higher than that of the previous month, or up by 0.84% month on month. In June, the Manufacturing Purchasing Managers' Index stood at 50.2%, 0.6 percentage point higher than that of the previous month; and the Production and Operation Expectation Index was 55.2%, 1.3 percentage points higher than that of the previous month. In the first five months, the total profits made by industrial enterprises above designated size was 3.44 trillion yuan, up by 1% year on year.

4. The service sector gradually recovered and modern service industries witnessed good growth momentum.

In the first half of this year, the value added of services went up by 1.8% year on year. Of this total, that of information transmission, software and information technology services and that of financial intermediation grew by 9.2% and 5.5%, respectively. In the second quarter, the value added of services was down by 0.4% year on year. The Index of Services Production in April was down by 6.1% year on year; the decline in May narrowed to 5.1% and that in June shifted from decline to an increase of 1.3%. In the first five months, business revenue of service enterprises above designated size grew by 4.6% year on year, 0.4 percentage point higher than that of the first four months. In June, the Business Activity Index for services was 54.3%, 7.2 percentage points higher than that of the previous month. Specifically, the Business Activity Index for retail sales, railway transportation, road transportation, air transportation, postal services, monetary and financial services and capital market services stayed within the expansion rage of 55% and above. In terms of market expectation, the Business Activity Expectation Index for services was 61%, 5.8 percentage points higher than that of the previous month.

5. Market sales improved and retail sales of goods for basic living grew fast.

In the first half of this year, the total retail sales of consumer goods reached 21.04 trillion yuan, down by 0.7% year on year. Analyzed by area, the retail sales in urban areas reached 18.27 trillion yuan, down by 0.8%, and the retail sales in rural areas stood at 2.77 trillion yuan, down by 0.3%. Grouped by consumption patterns, the retail sales of goods reached 19.04 trillion yuan, up by 0.1%; and the income of catering was 2 trillion yuan, down by 7.7%. The consumption of goods for basic living grew steadily. The retail sales of grain, oil and food and that of beverages by enterprises above designated size grew by 9.9% and 8.2%, respectively. Online retail sales totaled 6.3 trillion yuan, up by 3.1%. Specifically, the online retail sales of physical goods were 5.45 trillion yuan, up by 5.6%, accounting for 25.9% of the total retail sales of consumer goods. In the second quarter, the total retail sales of consumer goods went down by 4.6% year on year. Specifically, that in April was down by 11.1% year on year; the decline in May narrowed to 6.7%; and that in June shifted from decline to an increase of 3.1% year on year, or up by 0.53% month on month. 

6. Investment in fixed assets continued to grow and investment in high-tech industries and social sectors grew fast.

In the first half of this year, the investment in fixed assets (excluding rural households) reached 27.14 trillion yuan, up by 6.1% year on year. Specifically, in the first half of this year, the investment in infrastructure was up by 7.1%, manufacturing up by 10.4%, and real estate development down by 5.4%. The floor space of commercial buildings sold reached 689.23 million square meters, down by 22.2%; the total sales of commercial buildings was 6.61 trillion yuan, down by 28.9%. By industry, investment in the primary industry went up by 4%, the secondary industry up by 10.9%, and the tertiary industry up by 4%. Private investment was up by 3.5%. The investment in high-tech industries grew by 20.2%, of which the investment in high-tech manufacturing and high-tech services increased by 23.8% and 12.6%, respectively. In terms of high-tech manufacturing, the investment in the manufacturing of electronic and communications equipment and in the manufacturing of medical equipment, measuring instruments and meters grew by 28.8% and 28%, respectively. In terms of high-tech services, the investment in services for transformation of scientific and technological achievements and in research, development and design services went up by 13.6% and 12.4%, respectively. The investment in social sectors went up by 14.9%, among which, investment in health and education went up by 34.5% and 10%, respectively. In the second quarter, the investment in fixed assets (excluding rural households) witnessed a year-on-year increase of 4.2%. Specifically, the growth rate was 1.8% in April, accelerated to 4.6% in May and rebounded further to 5.6% in June. In June, investment in fixed assets (excluding rural households) went up by 0.95% month on month.

7. Imports and exports of goods grew fast and the trade structure continued to be optimized.

In the first half of this year, the total value of imports and exports of goods was 19.8 trillion yuan, an increase of 9.4% year on year. The total value of exports was 11.14 trillion yuan, up by 13.2%. The total value of imports was 8.66 trillion yuan, up by 4.8%. The trade balance was 2.48 trillion yuan in surplus. The imports and exports of general trade increased by 13.1%, accounting for 64.2% of the total value of the imports and exports, 2.1 percentage points higher than that of the same period last year. The imports and exports by private enterprises increased by 13.6%, accounting for 49.6% of the total value of imports and exports, 1.9 percentage points higher than that of the same period last year. The imports and exports of mechanical and electronic products increased by 4.2%, accounting for 49.1% of the total value of the imports and exports. In June, the total value of imports and exports was 3.77 trillion yuan, an increase of 14.3% year on year. The total value of exports was 2.21 trillion yuan, up by 22%. The total value of imports was 1.56 trillion yuan, up by 4.8%.

8. Consumer price saw mild growth and growth of producer prices for industrial products continued to decline.

The consumer price index (CPI) went up by 1.7% year on year in the first half of this year. Grouped by commodity categories, prices for food, tobacco and alcohol were up by 0.4% year on year; clothing up by 0.5%; housing up by 1.2%; articles and services for daily use up by 1%; transportation and communication up by 6.3%; education, culture and recreation up by 2.3%; medical services and health care up by 0.7%; and other articles and services up by 1.2%. In terms of food, tobacco and alcohol prices, prices for pork went down by 33.2%, grain up by 2.4%, fresh fruit up by 12% and fresh vegetables up by 8%. Core CPI excluding the prices of food and energy went up by 1%. In the second quarter, the CPI went up by 2.3% year on year. Specifically, it increased by 2.1% year on year in both April and May, rose by 2.5% year on year, and maintained the same level of growth month on month in June.

In the first half of this year, the producer prices for industrial products went up by 7.7% year on year, with year-on-year growth of 6.8% in the second quarter. Specifically, prices grew by 8% in April and 6.4% in May year on year; up by 6.1% year on year and maintained the same level of growth month on month in June. The purchasing prices for industrial producers went up by 10.4% year on year in the first half of this year, and up by 9.5% year on year in the second quarter. Specifically, prices grew by 10.8% in April and 9.1% in May year on year; up by 8.5% year on year and 0.2% month on month in June.

9. Employment trends improved and the surveyed unemployment rate in urban areas fell.

In the first half of this year, the newly increased employed people in urban areas totaled 6.54 million. The surveyed unemployment rate in urban areas averaged 5.7% in the first half of this year and 5.8% in the second quarter. In April, the surveyed unemployment rate in urban areas was 6.1%, with consecutive declines of 5.9% in May and 5.5% in June. In June, the surveyed unemployment rate of population with local household registration was 5.3% and that of population with non-local household registration was 5.8%, of which that of population with non-local agricultural household registration stood at 5.3%. Specifically, the surveyed unemployment rates of the population aged from 16-24 and from 25-59 were 19.3% and 4.5%, respectively. The urban surveyed unemployment rate across 31 major cities was 5.8%, 1.1 percentage points lower than May. Employees of enterprises worked on average 47.7 hours per week. By the end of the second quarter, the number of rural migrant workers totaled 181.24 million.

10. Residents' incomes steadily increased and the urban-rural per capita income ratio narrowed.

In the first half of this year, the nationwide per capita disposable income of residents was 18,463 yuan, a nominal increase of 4.7% year on year. Real growth was 3% after deducting price factors. In terms of permanent residence, the per capita disposable income of urban households was 25,003 yuan, a nominal growth of 3.6% and a real growth of 1.9% year on year. The per capita disposable income of rural households was 9,787 yuan, a nominal growth of 5.8% and real growth of 4.2% year on year. By sources of income, nationwide per capita salary income, net business income, net property income and net income from transfers witnessed nominal growths of 4.7%, 3.2%, 5.2% and 5.6%, respectively. The per capita income of urban households was 2.55 times that of rural households, 0.06 less than the same period last year. Median nationwide per capita disposable income was 15,560 yuan, a nominal increase of 4.5% year on year.

Generally speaking, with a series of policies to solidly stabilize the economy achieving notable results, the national economy has overcome the adverse impact of unexpected factors, demonstrating stable recovery momentum. The second quarter, in particular, witnessed positive economic growth and stable macroeconomic performance was maintained, which are hard-earned achievements. However, we should be aware that the foundation for the sustainable and steady recovery of the economy is yet to be consolidated. Externally, this is due to the rising risk of stagflation in the world economy, a trend toward the tightening of policies by major economies, and an obvious increase in instabilities and uncertainties. Meanwhile, domestically, the impact of the epidemic is lingering, shrinking demand is intertwined with disrupted supply, structural problems are combined with cyclical problems, and market entities still face difficulties operating. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, apply the new development philosophy in full, in the right manner and in all fields, follow the requirements for containing the epidemic, stabilizing the economy and keeping development secure, respond to COVID-19 and pursue economic and social development in a coordinated manner, take advantage of the critical period of economic recovery, adopt strong measures to promote the implementation of a package of policy measures to maintain a stable economy, continue to ensure stability on six fronts and maintain security in six key areas, continue to enhance efficiency, stimulate vitality and add impetus, and constantly consolidate the foundation for a steady economic recovery to keep major economic indicators within the appropriate ranges. 

Shou Xiaoli:

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

Phoenix TV: 

The Chinese economy slowed down in the second quarter due to a heavy blow from the pandemic. What are your views on this? Will the Chinese economy be able to sustain a recovery? Thank you.

Fu Linghui:

Thank you for your questions. In the second quarter, such unexpected factors as complex changes in the international environment and the resurgence of COVID-19 cases at home have put the Chinese economy under much greater downward pressure. In light of this, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all regions and departments have worked to coordinate pandemic control with socioeconomic development effectively. A package of policy measures was implemented to stabilize the economy with good results, and the pandemic resurgence was brought under effective control. The economy has, on the whole, stabilized and rebounded. The main characteristics are as follows:

First, the Chinese economy managed to resist pressure and achieve growth. In April, major economic indicators declined year on year due to the pandemic resurgence. In response, all sides involved intensified efforts to stabilize the economy and actively worked to ensure logistics efficiency. With all these efforts, we succeeded in resisting the downward pressure and getting the economy back on the track of stabilizing and rebounding, thus securing growth in the second quarter. The GDP expanded 0.4% year on year, the value-added of industrial enterprises above the designated size grew 0.7%, and the fixed asset investment was 4.2%. 

Second, in terms of monthly performance, the economy began to rebound gradually in May. In April, due to the impact of unexpected factors, major indicators contracted markedly. Then, with a general improvement in the pandemic situation, the resumption of work and business production, and the payoff of several policy measures to stabilize the economy, the slide in April was halted in May. Then in June, major indicators stabilized and rebounded. Concerning production, in June, the value-added of industrial enterprises above the designated increased 3.9% year on year, up 3.2 percentage points from the previous month; the production index of the service industry grew 1.3%, compared with the 5.1% fall in May. Regarding demand, in June, the retail sales of consumer goods grew 3.1% after the 6.7% fall in May; export grew 22%, 6.7 percentage points higher than the previous month. In terms of regions, of all the 31 provincial regions on the Chinese mainland, 21, or 67%, saw faster growth in the value-added of industrial enterprises above the designated size; 30, or 96.8%, reported faster growth in the retail sales of consumer goods of enterprises above the designated sales volumes.

Third, employment and price levels were generally stable. The surveyed urban unemployment rate has fallen for two consecutive months. The rate averaged 5.8% nationally in the second quarter. It stood at 6.1% in April and fell to 5.9% in May and 5.5% in June. In June, the rate was 4.5% for those aged 25-59, the main age group for employment, a 0.6 percentage point lower than the previous month; the rate was 5.3% for migrant workers with permanent rural residency, down by a 0.9 percentage point from the previous month. Consumer prices grew by a mild 2.3% in the second quarter. The growth was 2.1% year on year in April and May, and a slightly higher 2.5% in June. The growth was much lower than that of the Eurozone and the United States, which stood at 8.6% and 9.1%, respectively, in June. 

Fourth, foreign trade delivered good performance, and forex reserves remained stable. Foreign trade in goods maintained a fast growth of 8.1% in the second quarter. It grew 0.1% and 9.6% in April and May and expanded to 14.3% in June. China's forex reserves stood above $3 trillion throughout the second quarter.  

Fifth, industries continued to upgrade. New industries saw fast growth. In the second quarter, the value-added of high-tech manufacturing enterprises above the designated size rose 5.7% year on year, 5 percentage points higher than that of all industrial enterprises above the designated size. The proportion of the manufacturing sector in the economy continued to increase, with its value-added accounting for 28.8% of the national GDP in the second quarter, a 0.3 percentage point higher year on year. The modern service sector also registered fast growth, as represented by the information transmission software and information technology service segment, whose value-added grew 7.6% year on year, and the financial service segment, whose value-added grew by 5.9% year on year, both remarkably faster than that of the entire service sector. 

Generally speaking, the Chinese economy withstood multiple pressure and challenges in the second quarter. Its major indicators first declined and then stabilized and rebounded. Next, although the Chinese economy will still face many difficulties and challenges due to such unexpected factors as complex and grave international environment and the impact of the pandemic at home, the fundamentals sustaining China's long-term economic growth will remain unchanged. Strong resilience, enormous potential, and vast room for maneuver will remain salient features of the Chinese economy. As the policy measures to stabilize the economy continue to pay off, the Chinese economy is expected to gradually recover and maintain stable growth. Thank you. 

CCTV:

Since the beginning of this year, complex changes have occurred both at home and abroad. What are the characteristics of economic growth in China? What are your views on the economic operation of the first half year? Thank you. 

Fu Linghui: 

Thank you for your questions. Since the beginning of this year, the international environment has become increasingly complex and grave, and the Ukraine crisis has further evolved; at home, there have been frequent and sporadic COVID-19 cases. Such emergency factors have gone beyond our expectations. As a result, the Chinese economy suffered a certain degree of fluctuations. Following a better-than-expected recovery in January and February, major economic indicators declined markedly due to international factors and the pandemic impact at home in March and April; then, since May, economic performance has been gradually stabilizing and rebounding, and much more positive changes have been taking place as a package of policy measures to stabilize the economy and control the pandemic in a coordinated manner gradually pay off. The main characteristics are as follows.

First, the economy managed to grow against a headwind. Since the beginning of this year, the international situation has become increasingly complex and grave, and the global economy has slowed down evidently; at home, frequent and sporadic pandemic cases have dealt a heavy blow to economic stability. The downward pressure the Chinese economy faces added greatly in April particularly. In response, all localities and departments have followed the decisions and arrangements of the CPC Central Committee and the State Council to effectively coordinate pandemic control and socioeconomic development. We have stepped up macroeconomic policy adjustment and rolled out a package of policy measures to stabilize the economy, thus effectively stabilizing the economy's fundamentals and scoring growth in the second quarter. China's GDP grew 2.5% in the first half year and 0.4% in the second quarter, which was hard won given the decline in major production and demand indicators in April and May. It showed the strong resilience of the Chinese economy.

Second, prices have remained stable on the whole. Affected by geopolitical conflicts and increased liquidity of the world's major economies, the prices of major commodities, especially those of grain and energy, have remained high, adding to the impact of imported inflation on China. Against such a backdrop, China has stepped up market supply to stabilize prices, worked hard to ensure grain and energy output, and thus managed to keep domestic prices stable. In the first half year, consumer prices rose by 1.7% year on year, lower than the whole-year target of around 3%. The core CPI, excluding food and energy prices, remained stable by gaining 1% yearly. Rising prices in China have been much lower than that of Europe and the United States, providing favorable conditions for stabilizing the economy and improving the people's wellbeing.  

Third, employment and people's livelihood have been guaranteed. Due to the epidemic outbreak, the employment pressure has risen sharply this year, and increasing personal income and ensuring people's wellbeing have become more difficult. Focusing on addressing acute issues, government authorities and departments continued to step up efforts to provide employment stability and strengthen efforts to meet people's basic living needs. Progress has been made in this regard. In the first half of the year, the newly increased employed people in urban areas totaled 6.54 million. The surveyed unemployment rate in urban areas has fallen for two consecutive months since May, reversing the earlier upward trend. In June, the rate dropped to 5.5%. The surveyed unemployment rate of the population aged 25 to 59 was 4.5%, roughly the same as in January. People's income has increased steadily. In the first half of the year, personal per capita disposable income increased by 3% in real terms year on year, slower than the first quarter but faster than the economic growth. The national per capita net income from transfers witnessed a nominal growth of 5.6%, a 0.9 percentage point higher than the growth rate of total income. 

Fourth, China's foreign trade has shown resilience. The impetus for global trade growth has been weakening since the beginning of this year. The new export order index of the worldwide manufacturing PMI has been below the 50-point mark for four consecutive months. However, China's foreign trade has maintained rapid growth, overcoming the adverse effects of the tightening external environment and the epidemic outbreak, which showed the strong resilience of China's foreign trade. In the first half of the year, the total volume of trade in goods grew by 9.4% year on year, with exports up by 13.2%. The total volume of trade in goods grew by 14.3% in June year on year, up 4.7 percentage points from the previous month. 

Fifth, the momentum of transformation and upgrading has continued. Despite the complex and grim external environment and growing downward pressure on the domestic economy, China continued to boost innovation-driven development and the momentum of transformation and upgrading remains unchanged, with the new impetus growing fast. In the first half of the year, the value added of high-tech manufacturing enterprises above the designated size went up by 9.6% year on year, and the investment of high-tech industries grew by 20.2% year on year, maintaining fast growth. The online retail sales of physical goods went up by 5.6%, accounting for 25.9% of the total retail sales of consumer goods. The structure of the Chinese economy has been adjusted and improved. The value-added of the manufacturing sector accounted for 28.8% of the GDP in the first half of the year, up a 0.7 percentage point year on year. The per capita income of urban households was 2.55 times that of rural households, 0.06 less than last year. We continued to promote the green transformation. The share of clean energy consumption increased by 1.3 percentage points in the first half of the year, and the output of new energy vehicles and solar batteries grew by 111.2% and 31.8% respectively. 

In general, the country's economy has maintained growth by overcoming difficulties in the year's first half, showing the recovery momentum. However, the recovery of the domestic economy is still facing many challenges due to the complex and grim external environment. Next, following the decisions and deployment of the CPC Central Committee and the State Council, we will effectively coordinate epidemic control and prevention and economic and social development and promote the implementation of policies and measures to stabilize growth to promote sustained and sound economic development. Thank you.  

Reuters:

China's GDP in the first half year went up by 2.5%, much lower than the annual growth target of around 5.5%. What do you think of the recovery momentum in the year's second half? Will new measures to stabilize growth be rolled out, especially in boosting consumption and private investment? Thank you. 

Fu Linghui:

Thank you for your questions. In the first half of the year, the Chinese economy was affected by the complex and grim external environment and the epidemic resurgence. With concerted efforts of all sectors, we maintained a hard-won positive economic growth in the second quarter. For the next stage, stagflation risks of the global economy are rising, and there are still many unstable and uncertain factors in the recovery of the domestic economy. But China's economy has strong resilience and great potential, and its long-term positive trend has not changed. By implementing policies and measures to stabilize growth, China's economy is expected to improve gradually. 

First, the country's economy has resilience. Despite the shocks caused by the epidemic resurgence, the country's economic aggregate remained considerable and enjoyed the advantages of a solid material foundation and a super-large market. The economic aggregate reached 56 trillion yuan in the year's first half, with the industrial added value approaching 20 trillion yuan, the value added created by the service sector exceeding 30 trillion yuan, and the fixed-asset investment exceeding 27 trillion yuan. Retail sales dropped slightly but still exceeded 21 trillion yuan. All these figures have strengthened our strength and confidence in coping with various risks and challenges. 

Second, there is potential for the recovery of demand. In terms of investment, we continued to make efforts to stabilize investment, with the issuance and use of special bonds being accelerated, significant projects being advanced, and investment in infrastructure being boosted. Investment is expected to play a more prominent role in stabilizing growth. In the first half of the year, infrastructure investment grew by 7.1% year on year, a 0.4 percentage point higher than in the first five months. Regarding leading indicators, total planned investment in new projects rose 22.9% year on year in the first half of the year, maintaining rapid growth. In terms of consumption, as the epidemic prevention and control improved, offline consumption scenarios gradually recovered. Consumption is expected to continue to recover, fueled by policies to promote consumption. The country's imports and exports have strong resilience in terms of foreign trade. We continue to encourage smooth freight and logistics services. The imports and exports of the Yangtze River Delta region have recovered quickly, the business environment at ports has continued to improve, and there is a good foundation for maintaining steady and high-quality growth of foreign trade. The imports and exports rose 9.5% in May year on year, up 9.4 percentage points from April. The imports and exports rose 14.3% in June year on year, up 4.8 percentage points from May. 

Third, there are pillars for production recovery. In terms of industries, the total value added of the industrial enterprises above the designated size resumed positive growth in May, up 0.7% year on year and up 3.9% year on year in June. As the resumption of work and production is accelerated and bottlenecks in industrial and supply chains are unclogged, the leading role of key sectors, such as the auto and electronic industries, is expected to grow. In particular, the accelerated recovery of production in areas heavily affected by the epidemic in the second quarter has contributed to the stable industrial growth. The manufacturing purchasing manager's index (PMI) climbed above the tipping point again in June. The Production and Operation Expectation Index rose to 55.2%, showing the confidence of manufacturing companies has continued to grow. In terms of the service sector, as the epidemic prevention and control improved, the service production reversed the decline in June, with the Index of Services Production shifting from decline to an increase of 1.3% year on year, with the recovery momentum of the contact and cluster industries being apparent. As life and work quickly return to normal, service market demand has gradually picked up, business confidence has recovered, and the service sector is expected to improve. In June, the PMI for services was 54.3%, a return to expansionary territory. The Business Activity Expectation Index for services was 61%, rising for the second consecutive month. In terms of transport and logistics, smooth transport and logistics services have supported the further recovery of production. Freight turnover rose 5.7% in June year on year, up 2.3 percentage points from the previous month. The logistics performance index (LPI) was 52.1%, up 2.8 percentage points from the last month. 

Fourth, innovative development injects growth impetus. In recent years, China has further put into action the innovation-driven development strategy, vigorously promoted industrial transformation and upgrading, and effectively boosted new drivers of growth. Due to the COVID-19 pandemic, traditional industries have made a faster shift to digital-driven, internet-based, and smart-tech models, and new industries and new drivers have continued to maintain their steady and rapid growth, offering continuously enhanced support to the economic growth and being conducive to promoting the sustained recovery of the economy. In the second quarter, the value-added of high-tech manufacturing enterprises above the designated size increased by 5.7% year on year, 5 percentage points faster than the growth rate of industries above the designated size. The added value of information transmission, software and information technology service industries increased by 7.6%, 7.2 percentage points higher than the growth rate of the GDP.

Fifth, macro policies have helped guarantee growth. Since the second quarter, facing downward pressure on the economy, the CPC Central Committee and the State Council have timely issued 33 policies and measures in six aspects to stabilize the growth. All regions and departments have responded quickly and implemented these policies and measures in an effective way. In June, the State Council further strengthened its deployment and called for accelerating the solid implementation of a package of policies and measures to stabilize the economy. From the recent situation of the economic operation, we can see investment in infrastructure has been accelerated significantly, the consumption of bulk commodities such as automobiles has notably rebounded, the flow of logistics and people has become smoother, the expectation and confidence of enterprises have gradually improved, and the policies to ensure stable growth have been working effectively. In the next stage, the intended effect of policies such as refunding large-scale VAT credits, issuing and using special bonds, and strengthening the financial support for the real economy will continue to be unleashed, helping promote sustained recovery and sound development of the economy.

In general, as the epidemic prevention and control situation has improved and the policies have shown effects, China will further harness its strengths as a large economy with broad market space, strong development resilience, sufficient reform dividends, and strong governance capacity, and China's economy is expected to continue to recover. We should also notice that there are still instability and uncertainties in the external environment, and China is under the triple pressures of shrinking demand, disrupted supply, and weakening expectations. Therefore, we need to continue to make unremitting efforts to stabilize the macroeconomic performance and promote the sustained recovery of the economy. Thank you. 

CNR:

We have noticed that in the first half of the year, the economy in some regions was severely affected by the COVID-19 epidemic, so how about their current situation? Moreover, how about the performance of China's regional economy on the whole? What are your comments? Thank you.

Fu Linghui:

Thanks for your questions. Indeed, since the first half of this year, the epidemic has had a severe impact on the economic operation of some regions. However, it should be noted that the impact is short-term and external and will not change the general and coordinated development trend of the regional economy. In the first half of the year, especially in the second quarter, our well-coordinated efforts to respond to COVID-19 and pursue economic and social development have witnessed positive effects. With the implementation of a package of policies and measures to stabilize growth, China's economy has gradually overcome the adverse impact brought about by the epidemic and accelerated its recovery. Positive changes have been witnessed in some regions that were hit hard by the epidemic.

First, in the second quarter, the economy of most regions was basically stable. In terms of growth, in the second quarter, among the country's 31 provinces (autonomous regions and municipalities), 26 of them maintained their GDP growth, accounting for 83.9% of the total number. From the perspective of employment, the surveyed urban unemployment rate of 19 provinces (autonomous regions and municipalities) in the second quarter was lower than the national average, of which the surveyed urban unemployment rate of the western region was 5.5%, 0.3 percentage points lower than the national average level. In terms of prices, the price rise in most regions was moderate, and the consumer prices in 30 provinces (autonomous regions and municipalities) rose less than 3% year on year in the second quarter

Second, central and western regions saw sound economic growth. In the second quarter, the GDP of central and western regions increased by 2.3% and 2% year on year, respectively, both faster than that of the whole country. In the first half of the year, the growth of central and western regions was faster than that of the eastern region, with their added value of industries above designated size both increasing by 7.3% year on year, 5.1 percentage points faster than that in the eastern region. Fixed asset investment in central and western regions increased by 10.7% and 8%, respectively, faster than that in the eastern region by 6.2 and 3.5 percentage points, respectively.

Third, some areas were hit hard by the epidemic. The normal order in work and life in these regions was affected to a certain extent, thus, the local economy declined, and the unemployment rate increased in the short run. In the second quarter, the GDP of Shanghai and Jilin fell by 13.7% and 4.5% year on year, respectively, while the surveyed urban unemployment rate in Shanghai and Jilin stood at 12.5% and 7.6%, respectively, significantly higher than the national level.

Fourth, the economy of regions hit hard by the epidemic accelerated the recovery. Although the economy of some regions in the second quarter was severely affected by the epidemic, on a monthly basis, the main economic indicators in these areas improved notably in June. These improvements were made when the epidemic response was moving in a positive direction, and enterprises sped up their resumption of work and production. The added value of industries above the designated size in Shanghai and Jilin increased by 13.9% and 6.3% year on year in June, and fell by 30.9% and 4.9%, respectively in May. In terms of consumption, retail sales of units above designated size in Jilin increased by 5.5% in June and fell by 1.5% in May. In terms of employment, the surveyed urban unemployment rates in Shanghai and Jilin fell by 9.7 and 0.8 percentage points respectively in June compared with those in May, indicating that the economic recovery in these regions is steadily accelerated.

Generally speaking, the economy in most regions of China is stable. The growth rate of central and western regions is faster than that of the eastern region, while the trend of regional coordinated development has not changed. Some regions have encountered temporary difficulties due to the epidemic; however, as various policies and measures have been implemented to stabilize the economy, their economy has accelerated the recovery. Of course, we should also see that the problem of unbalanced economic development in China is still prominent, and the development gap between regions is large. Going forward, we will continue to implement major regional development strategies and coordinated regional development strategies, narrow the regional gap, and promote coordinated and sustainable economic development. Thank you. 

Bloomberg: 

My question is about the industrial output. Looking at the headline numbers, the rise is 3.9%. But if you look at the breakdown, according to my calculations, the electricity output only rose 0.1%, rolled steel output fell 3.7%, cement output fell over 17%, flat glass only rose 0.2%, semi-conductors fell, ores fell, smart production fell, what rose to drive total industrial output up 3.9% when so many industrial goods output fell over the same period? Thank you.

Fu Linghui:

This year, affected by the epidemic, industrial production declined in April, increased from the decline in May, and the growth rate accelerated notably in June. From the output and added value of industrial products, we can see the production of the auto industry rebounded remarkably in June. The industrial chain of the auto industry in the Yangtze River Delta was affected to a certain extent earlier this year due to the epidemic. However, as the economy in Shanghai and other regions has begun to recover recently, the production growth of the auto industry is accelerating both in its output and its added value compared with those in May, contributing to the rise of industrial production in June. You just talked about the decline of some products. However, in general, we see growth according to statistics for over 500 products, so we can tell that industrial production rebounded in June. From the perspective of structure, the equipment manufacturing industry rebounded remarkably. In particular, the rise of the auto industry has contributed greatly to the growth of the whole industry. As the economy gradually recovers, other industries have also played their supporting roles in the overall industrial growth. Thank you. 

Cover News:

The surveyed unemployment rate of young people aged 16-24 hit a new high this year. Can you give a detailed introduction to the current employment situation of young people? What is your prediction of the employment situation in the next stage? Will it be possible to achieve the annual target of adding more than 11 million jobs?

Fu Linghui:

Thank you for your questions. Employment is a matter of concern because it is the foundation of people's livelihoods. Since the beginning of this year, factors such as the complex and severe international environment and the impact of the domestic epidemic have had a certain impact on employment. In general, with the joint efforts of all parties, the economy has been recovering and various employment stabilization policies have been implemented, reversing the rising trend of surveyed urban unemployment. Due to various factors, the surveyed urban unemployment rate rose to 6.1% in April. But as the epidemic prevention and control situation improves, the rate has dropped for two consecutive months since May. In May, the rate was 5.9%, down 0.2 percentage points from the previous month, and it further fell to 5.5% in June. Looking at the situation in the second quarter, the employment situation mainly has the following characteristics:

First, the employment of the main working population is generally stable. Although the unemployment rate of the main working population aged 25-59 increased in April, the increase was significantly lower than the overall unemployment rate. In June, the unemployment rate among those aged 25-59 was 4.5%, a decrease of a 0.6 percentage point from the previous month and close to the average level in 2021.

Second, the employment situation of rural migrant workers has improved. Migrant workers are mostly engaged in labor-intensive manufacturing and service industries, are mostly self-employed, and have flexible employment, so their employment stability is relatively poor. Affected by the impact of the epidemic, the unemployment rate of the migrant population with rural household registration rose to 6.6% in April. As the epidemic is gradually brought under control and measures to help enterprises stabilize jobs begin to deliver, the employment of migrant workers has improved significantly. The unemployment rate of the migrant population with rural household registration dropped to 6.2% in May and 5.3% in June, lower than the overall unemployment rate.

Third, the employment pressure on young people is still relatively high. When young people enter the labor market for the first time, they face a frictional unemployment dilemma. At the same time, affected by the epidemic, the ability of enterprises to absorb employment has declined, and young people's job-seeking channels have also been hindered amid the epidemic. In addition, the total number of college graduates this year has reached a record high, intensifying the employment pressure on young people. In June, the youth unemployment rate for the16-24 age group in urban areas was 19.3%, the highest level for this year.

In general, with the economy's recovery and effective employment stabilization policies, China's employment situation showed an overall improvement trend in the second quarter. However, the problem of youth employment pressure is still prominent. We must continue stabilizing employment, especially the employment of key groups. We must further implement the employment stabilization policies and offer employment assistance to promote the continuous improvement of the employment situation. Thank you.

Financial Times:

You mentioned that fixed asset investment continued to improve in the second quarter. Meanwhile, cement production dropped by 12.9% in June. The asphalt production rate also showed a relatively historical low. So how to understand such a contrast? What are your expectations for future infrastructure investment? Thank you.

Fu Linghui:

Thanks for your questions. Since the beginning of this year, people have paid high attention to investment and related investment products. In recent years, in terms of China's investment in three major sectors, investment in manufacturing has seen the fastest growth, with a growth rate of more than 10% in the first half of this year. Among the manufacturing industry, high-tech manufacturing grew by more than 20%. From the structure perspective, China's economic and industrial development is gradually upgrading, and the drive for industrial-upgrading-related products is relatively obvious. In contrast, investment growth in some traditional industries has gradually slowed down. With the continuous advancement of high-quality development of China's industrial upgrading and development and continuously innovative development in the future, the driving force for equipment manufacturing and high-tech-related products is increasing. Therefore, in general, although China's economy has been hit by the epidemic this year, the trend of industrial development and upgrading and high-quality development has not changed. Employment and prices are generally stable. Judging from these circumstances, the trend of China's economy to maintain a steady growth and move towards high-quality development will not change in the future. Thank you. 

Asahi Shimbun: 

If there were no COVID-19 impact, what would the potential growth rate of China's economy have been? How do you see the possibility of economic recovery in the second half of the year for achieving the full-year GDP growth target of 5.5%? Thank you.

Fu Linghui:

Thank you for your questions. Many institutions and scholars have made calculations regarding the potential growth rate of China's economy, and the calculation results are somewhat different. Generally speaking, most conclusions agree that the potential growth rate of China's economy at this stage is about 5%-6%. As China's economy grows larger and the constraints on labor, resources, and the environment become stronger, the potential growth rate will gradually decrease. However, from a global perspective, the potential growth rate of 5%-6% is still at a medium and high level. Especially under the conditions of such a large economy as China, it is very difficult to maintain medium- and high-level growth, which also shows that China's economic growth potential is still relatively large.

China is still the largest developing country in the world. Although China's per capita GDP has exceeded $10,000, there is still a big gap compared with the per capita level of more than $40,000 in developed countries. This gap means a huge space and potential for the future development of China's economy. It should be pointed out that due to the complex and severe international environment, compounded by the COVID-19 pandemic unseen in a century, the adverse currents encountered by globalization, and the critical period for China's economic restructuring, it is increasingly difficult for China's economic growth to reach its potential level. To maintain steady economic growth, we still have to work hard. In the first half of this year, China's economy overcame unexpected factors and maintained growth, which was an uphill battle. The risk of stagflation in the world economy is on the rise, external instability and uncertainties are increasing, and the triple pressures of shrinking domestic demand, supply shocks, and weakening expectations still exist. Achieving the expected economic growth target for the whole year is challenging. However, it should also be noted that the fundamentals that sustain China's long-term economic growth have not changed, the economy still shows strong resilience, the macro policy adjustment tools are abundant, and there are many favorable conditions for promoting sustained economic recovery. In the second half of this year, with the efficient coordination of COVID-19 response and socioeconomic development, and various economic recovery policies and measures yielding tangible results, China's economy is expected to continue to rebound and perform within a reasonable range. Next, we must seize the favorable opportunity for economic recovery, coordinate COVID-19 response and economic and social development following the overall requirements of preventing the epidemic, stabilizing the economy, and developing safely, and ensure policies and measures to stabilize the economy continue to yield results, so that we can consolidate the foundation for economic recovery, and maintain sustainable and healthy economic development. Thank you.

Cover News:

The CPI in June hit a two-year high. As the "hog cycle" has entered the upward trajectory, will inflationary pressures intensify in the second half of the year? What measures will the government take to keep prices within a reasonable range? Thank you.

Fu Linghui:

Thank you for your question. Since the beginning of this year, global inflationary pressures have risen, and domestic concerns about prices have also increased. As the domestic market demand has gradually recovered, coupled with imported factors from abroad, the year-on-year growth of the CPI continues to increase but remains moderate. In the first half of the year, the CPI went up by 1.7% year on year, with food prices down 0.4% and non-food prices up 2.2%. In the second quarter, CPI growth was generally stable, up 2.3% year on year. On a monthly basis, the CPI went up by 2.1% year on year both in April and May, up 2.5% in June. In the second quarter, CPI changes have the following features:

First, food prices rose after a fall. Food prices rose 2.3% in the second quarter after a 3.1% drop in the first quarter. This can be explained by an intensified price increase in fresh fruit, fresh vegetables, eggs, and grain and a rally in pork prices. Pork prices decreased by 21.3% in the second quarter, 20.5 percentage points lower than the previous quarter.

Second, industrial consumer prices have increased at a quicker pace. In the second quarter, industrial consumer prices went up by 4.1% year on year, 1.1 percentage points higher than that of the first quarter. This was mainly affected by international import factors; prices of some energy products have continued to rise, with gasoline and diesel prices rising 30% and 32.8%, respectively, year on year in the second quarter.

Third, the rise in service prices has moderated. Affected by factors such as the epidemic, the demand for services has been weak, which dragged down the increase in service prices. Service prices went up by 0.8% year on year in the second quarter, 0.5 percentage points lower than that in the first. The price increases of airline tickets and tourism have all declined. June's CPI went up by 2.5% year on year, mainly due to the lower base in the previous year. Among the 2.5% year-on-year increase in June, the carryover effect accounted for 1.2 percentage points, 0.4 percentage points higher than the previous month, while the influence of new factors was about 1.3 percentage points, the same as the previous month. In terms of industry, food prices went up 2.9% year on year, 0.6 percentage points higher than last month, mainly due to the narrowed drop in pork prices. Energy prices went up 17.4%, an increase of 2.7 percentage points, mainly due to the impact of rising gasoline and diesel prices. Core CPI, excluding the prices of food and energy, went up by 1%, 0.1 percentage points higher than last month, indicating that supply and demand have stabilized.

From the international perspective, China's inflation has been significantly lower than that of European and American countries, mainly because China has not implemented massive stimulus policies. Facing imported inflation, we stepped up efforts to ensure supply and stabilize prices at home. In addition, grain production has been strengthened, and China has reaped a summer grain harvest this year. Summer grain production increased by 1% over the previous year, which meant that the CPI was generally stable. Price stability is not only conducive to the smooth operation of the economy but also to the improvement of people's livelihoods.

As for whether rising pork prices will affect the overall increase of the CPI, generally speaking, the impact has been limited. At present, hog production capacity has returned to normal, and their prices are not expected to rise sharply. More supply is expected as pigs that were previously put on hold will be brought into the market. In addition, relevant departments will strengthen market regulation and stabilize supply and the demand, which will help ensure stable prices.

Next, as we enter the flood season, the supply of fresh products from certain areas might be affected, and the influence of imported factors may also continue, but the capacity of supplying products and services has been sufficient, and prices are expected to maintain a moderate upward trend. Thank you. 

ThePaper.cn:

You mentioned that the growth rate of industrial value-added above designated size turned from negative to positive in May and continued to increase in June. The spread of COVID-19 in many parts of China has brought uncertainties to economic and social development. What do you think of the current resumption of work and production in China? What is the prediction for the recovery of the industrial economy in the second half and for the whole year? Thank you.

Fu Linghui:

In the first half of the year, due to unexpected factors both at home and abroad, the monthly year-on-year growth rate of industrial production decreased in April. However, since May, industrial production has continued to rebound as the measures to coordinate epidemic prevention and control and economic and social development have taken effect, and the measures to stabilize industrial economic operations have also delivered their desired effect. In the first half of the year, the value added of industrial enterprises above designated size increased by 3.4% year on year. In the second quarter, industrial production stopped its decline and turned positive. In the second quarter, the value added of industrial enterprises above designated size increased by 0.7% year on year, specifically a 2.9% decrease in April and a 0.7% increase in May, before a strong rally of 3.9% in June, hinting at a recovery. This recovery mainly showed in the following aspects:

First, the mining industry has maintained rapid growth. Energy supplies and price stability continued to be promoted, and relevant industries continued to grow fast, driving the value-added growth of the mining industry. In the second quarter, the value added growth of the mining industry grew by 8.4% year on year, with double-digit growth in the coal mining and washing industries, which were both significantly faster than the growth of all industries above designated size.

Second, value-added figures in high-tech manufacturing enterprises have demonstrated stable growth. Despite adverse effects such as the impact of the epidemic, the trend for industrial upgrading and development has not changed, and high-tech manufacturing has grown rapidly. In the second quarter, the value added of high-tech manufacturing above designated size increased by 5.7% year on year, higher than that of other industries above designated size, which has shown remarkable resilience.

Third, the export of industrial products played an active role in driving economic growth. China has a robust industrial production capacity and international competitiveness, and the export of industrial products maintained rapid growth. In the second quarter, the export delivery value of industrial enterprises above the designated size achieved a year-on-year increase of 8.2%, with a rise of 15.1% in June, which was 4 percentage points higher than that of the previous month.

Fourth, industrial production in the central and western regions was generally stable. In the second quarter, although parts of the eastern and northeastern areas were significantly affected by COVID-19, the industrial production in the central and western regions was generally stable, supporting the industrial production. In the second quarter, the added value of industrial enterprises above the designated size in the central and western regions rose by 5.9% and 6%, respectively. The growth rate was higher than the added value of industrial enterprises above the designated size nationwide.

According to the statistics in June, with a series of policies to ensure stable growth taking effect, industrial production rebounded markedly. First, the growth rate rebounded in most sectors and regions. In June, the growth rate of 27 of the 41 major industries rebounded from the previous month, accounting for 65.9%. The growth rate of industrial enterprises above the designated size in 21 regions of 31 provinces (autonomous regions, municipalities) rebounded, accounting for 67.7%. Second, the growth rate of the equipment manufacturing industry accelerated. As barriers in the industrial and supply chains have been gradually removed, the production in the automobile manufacturing sector rebounded significantly, driving rapid growth in the equipment manufacturing industry. In June, the added value of the equipment manufacturing industry rose by 9.2% year on year, 8.1 percentage points higher than the previous month, with the automobile manufacturing sector increasing by 16.2%, which had decreased by 7% during the last month. Third, the industrial production in the areas hit hard by COVID-19 in the early stage recovered significantly. In June, the added value of industrial enterprises above the designated size in Shanghai and Jilin province grew by 13.9% and 6.3%, respectively, dropping by 30.9% and 4.9% in the previous month.

All these statistics show that industrial production is steadily recovering; the impact of external shocks such as COVID-19 is gradually subsiding; production operations are improving at a faster pace. Industrial production plays a more vital role in supporting the economy, and industrial upgrading continues its good momentum, enhancing the quality of industrial development. However, it should be noted that currently, barriers still exist between industrial production and sales, enterprises in some industries face many difficulties, and it still requires continuous efforts to stabilize the industrial economy. In the next stage, measures will be taken to implement policies to ease the challenges of businesses fully. These include strengthening open and smooth logistics services, removing barriers in industrial and supply chains, and supporting enterprises in pursuing innovative development. These measures will ensure the stable performance of industrial production. Thank you.

Shou Xiaoli:

The last question, please.

National Business Daily:

In April, the year-on-year growth rate of total retail sales in China reached the lowest point in the year's first half. Since then, May and June have witnessed a rebound in the growth rate. Does that mean that the turning point of this year's V-shaped consumption recovery has passed? Is the rapid rebound in consumption related to a short-term stimulus caused by distributing consumption coupons in many places? How does the National Bureau of Statistics predict the consumption trend in the second half of this year? Thank you.

Fu Linghui:

Thank you for your questions. The issue of consumption is of great concern to the people. Since the beginning of this year, various factors have affected consumption growth. In the first half of this year, affected by multiple and sporadic local resurgences of COVID-19, market sales declined, especially with a marked decline in service consumption. In the first half of this year, the total retail sales of consumer goods dropped by 0.7% year on year. However, since May, as COVID-19 has been effectively contained and the policy to boost consumption has taken effect, market sales have grown steadily. The total retail sales in May fell by 6.7% year on year, 4.4 percentage points less than the previous year's decrease. In June, the growth rate shifted from a decline to an increase of 3.1% year on year.

Based on the situation in the first half of this year, the market sales mainly showed the following characteristics:

First, the consumption of goods for basic living registered rapid growth. In the first half of this year, the retail sales of grain, oil, food, and beverage grew by 9.9% and 8.2%, respectively, ensuring people's consumption for basic living.

Second, online retail sales grew steadily. In the first half of this year, the online retail sales of physical goods increased by 5.6%, accounting for 25.9% of the total retail sales of consumer goods.

Third, service consumption dropped. Under the impact of the pandemic, service consumption fell markedly. In the first half of this year, the catering revenue decreased by 7.7% year on year. Service consumption such as traveling also declined.

According to the situation in June, positive changes have occurred in domestic market sales.

First, most of the goods saw an increase in retail sales growth rates. In June, nearly 90% of the 18 categories of goods of enterprises above designated size witnessed rebounds in retail sales compared with the previous month. Among them, the growth rates of the retail sale value of clothing and daily necessities rebounded significantly. Furthermore, retail sales of cosmetics and communication appliances increased by 8.1% and 6.6%, respectively.

Second, the consumption of major commodities played a significant role in driving growth. The introduction and implementation of policies to promote consumption in critical areas such as halving the purchase tax for eligible passenger vehicles, boosted the sales of major commodities like automobiles and home appliances. In June, the retail sales of automobiles, home appliances and audio-visual equipment of enterprises above the designated size rose by 13.9% and 3.2%, respectively, a marked increase from the previous month, driving the growth rate of the retail sales of consumer goods in June by over 1.5 percentage points.

Third, service consumption such as catering was significantly improved. As people gradually increased their out-of-home consumption, service consumption improved as a result. In June, the catering revenue fell 4% year on year, compared with a 21.1% decline in the previous month. The number of domestic tourism trips and income during the Dragon Boat Festival holiday was much better than during the May Day holiday.

Fourth, the consumption in areas struck by COVID-19 rebounded rapidly. In June, the retail sales of goods of enterprises above the designated size in Shanghai decreased by 2.1% year on year, shrinking from the 44.1% decline registered in the previous month. Meanwhile, the retail sales of goods of enterprises above the designated size in Jilin province grew by 5.5%, compared with a decrease of 1.5% in the previous month.

In general, since May, domestic consumption has withstood the impact of COVID-19 and showed recovery momentum, with significantly more positive changes taking place. Although recovery in consumption is still facing constraints such as the slowdown in the growth of personal income and the limited consumption scenarios, the trend of expansion in the consumption scale, upgrading within the consumption structure, and innovation in the consumption model will not change. With improved social security and support of policies to stabilize employment and promote consumption, China's consumption is expected to sustain a sustained recovery. Thank you.

Shou Xiaoli:

Thank you to Mr. Fu Linghui and friends from the media. Today's briefing is at this moment concluded. Goodbye.

Translated and edited by Yuan Fang, Zhang Rui, Zhou Jing, Huang Shan, Liu Qiang, Xu Kailin, He Shan, Yan Xiaoqing, Wang Qian, Zhang Liying, Yang Xi, 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:

Ruan Jianhong, spokesperson of the People's Bank of China (PBC) and director general of the Statistics and Analysis Department at the PBC

Zou Lan, director general of the Monetary Policy Department at the PBC

Sun Tianqi, director general of the Financial Stability Bureau at the PBC

Chairperson:

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

Date:

July 13, 2022 

Xing Huina:

Friends from the media, good afternoon. Welcome to this press conference held by the SCIO. Today, we will introduce China's financial statistics from the first half of 2022 and answer your questions. Joining us are Ms. Ruan Jianhong, spokesperson of the PBC and director general of the Statistics and Analysis Department at the PBC; Mr. Zou Lan, director general of the Monetary Policy Department at the PBC; and Mr. Sun Tianqi, director general of the Financial Stability Bureau at the PBC.

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

Ruan Jianhong:

Friends from the media, good afternoon. Since the beginning of this year, the PBC has conscientiously implemented the plans of the Central Committee of the Communist Party of China (CPC) and the State Council, strengthened the prudent monetary policy, used monetary policy tools to adjust both the monetary aggregate and structure, risen to the challenges, and worked to serve the real economy and maintain stable macroeconomic performance. Financial statistics show that the first half of this year has witnessed reasonably adequate liquidity, stronger financial support for the real economy, improved credit structure, and a steady decrease in the overall financing costs of businesses. The financial sector has offered higher quality services for the real economy more efficiently.

First, liquidity has remained reasonably adequate and the financial sector has offered stronger support for the real economy. In the first half of the year, the PBC reduced its required reserve ratios by 0.25 percentage point and contributed surplus profits of 900 billion yuan to reasonably increase liquidity supply and enable financial institutions to offer stronger credit support for the real economy. At the end of June, broad money supply (M2) increased by 11.4% year on year, up 2.8 percentage points from a year earlier. In the first half of the year, the aggregate financing to the real economy (AFRE) (flow) was 21 trillion yuan accumulatively, up 3.2 trillion yuan from the same period in 2021; new RMB loans reached 13.68 trillion yuan, increasing by 919.2 billion yuan year on year.

Second, the credit structure has been continuously improved. The PBC has given full play to the guiding roles of structural monetary policy, introduced multiple structural monetary policy tools, supported inclusive loans to micro and small businesses, helped stabilize employment within micro, small, and medium enterprises (MSMEs), and strengthened support for key fields and weak links in the national economy. At the end of June, medium- and long-term loans for manufacturing increased by 29.7% year on year, 18.5 percentage points faster than the growth of loans overall; inclusive loans to micro and small businesses increased by 23.8% year on year, 12.6 percentage points faster than the growth of loans overall; and 52.39 million micro and small businesses received inclusive loans, up 36.8% year on year.

Third, the overall financing costs of businesses dropped steadily. In the first half of the year, the PBC improved the central bank's policy interest rate system, enhanced regulation of deposit rates, and worked to keep the costs of bank liabilities stable. In June, the interest rate on new term deposits was 2.5%, 16 basis points lower than the same period of the previous year. The PBC leveraged the potential of the reform of the loan prime rate (LPR) mechanism, lowering the one-year and five-year LPR by 10 and 20 basis points respectively to reduce the overall financing costs of businesses. In June, the interest rate on new business loans was 4.16%, 34 basis points lower than a year earlier.

Going forward, the PBC will conscientiously implement the CPC Central Committee's instructions to "continue effective COVID-19 control, achieve steady economic performance, and ensure development security," stay committed to the general principle of pursuing progress while ensuring stability, flexibly employ multiple monetary policy tools as needed, use monetary policy tools to adjust both the monetary aggregate and structure, and strengthen support for the real economy to keep major economic indicators within an appropriate range, drive high-quality economic development, and pave the way for a successful 20th National Party Congress. Thank you.

Xing Huina:

Thank you, Ms. Ruan. Next, I would like to invite Mr. Zou to give his introduction. 

Zou Lan:

I would like to start by briefing you on policy-based and developmental financial instruments, a topic which is of interest to you all.

Since the beginning of this year, due to COVID-19 and unexpected factors such as the Russia-Ukraine conflict, the Chinese economy has been facing some downward pressure and investment in infrastructure has become an important means to maintain stable macroeconomic performance. In accordance with plans made at an executive meeting of the State Council, last month, the PBC increased the credit line of developmental and policy-based banks and strengthened loan support for infrastructure projects that are useful in the long term and feasible in the short term. However, at present, the difficulty in obtaining project capital is one of the main factors hindering infrastructure construction and loan issuance.

At the executive meeting of the State Council on June 29, it was decided that China would adopt policy-based and developmental financial instruments to support the development of major projects. In accordance with the decisions and plans of the CPC Central Committee and the State Council as well as the requirements of the Financial Stability and Development Committee under the State Council, the PBC supported the China Development Bank (CDB) and Agricultural Development Bank of China (ADBC) to respectively set up financial instruments totaling 300 billion yuan. The specific purposes of the financial instruments are: first, shoring up the capital bases of major projects, with the amount not exceeding 50% of the total capital; and second, acting as transit capital for special bonds that cannot be put in place in the short term. For the projects that are to be implemented, financial instruments will quickly and precisely remove impediments caused by lack of capital so that the projects can start as soon as possible. In this way, financial instruments will help maintain stable macroeconomic performance.

Policy-backed and developmental financial instruments invest in line with market principles and make decisions independently in accordance with the law and regulations. They are responsible for their own profits and losses at their own risk, breaking even and earning a meager profit. These instruments focus only on financial investments and exercise the corresponding rights as stockholders instead of involving actual construction and operation of the projects. Meanwhile, they provide exit channels in line with market principles. The projects they invest in should produce good social benefits and be economically feasible. Their investments are guided toward three types of projects, including those in five key areas in the infrastructure sector determined by the 11th meeting of the Central Commission for Financial and Economic Affairs, those in areas such as major scientific and technological innovations, and those can be funded by local government special-purpose bonds.

With well-designed policies, policy-backed and developmental financial instruments, often adopted as temporary measures, can help ensure the availability of capital for major projects instead of resorting to a deluge of strong stimulus policies or over-issuing currency. The instruments can guide financial institutions to provide medium- and long-term, low-cost loan packages, improve the monetary policy's transmission mechanism, ensure stable credit growth, and help produce a combined effect of expanded investment, increased employment, and boosted consumption so as to achieve stable macroeconomic performance. That concludes my introduction.

Xing Huina:

Thank you, Mr. Zou. Now, we welcome questions. Please name the news organization you work for before asking your questions. 

ThePaper.cn:

How was China's macro leverage ratio in the first half of this year? What does the central bank predict the ratio will be in the second half? Thank you.

Ruan Jianhong:

Thank you. I will answer your questions. The PBC has always paid attention to changes in the macro leverage ratio. Since the fourth quarter of 2020, significant advances have been made in stabilizing the leverage and promoting growth. The macro leverage ratio has been in net decline for five consecutive quarters, leaving valuable policy space for coping with various complex issues in the future. In the global context, after the outbreak of the pandemic, the increase in China's macro leverage ratio was significantly lower than in other major economies. We were able to support the rapid economic recovery with relatively few new debts. At the end of 2021, the leverage ratios of America, Japan, and the Eurozone were 25.7, 39.5, and 21.4 percentage points higher than at the end of 2019, respectively. During the same period, the increase in China's macro leverage ratio was 16.5 percentage points, significantly lower than in other major economies. Meanwhile, China's economic performance continued to lead, and inflation was generally under control. From the perspective of policy effect, the moderate growth of China's macro leverage ratio has supported an optimal combination of "higher growth and lower inflation." All this demonstrates that our macro policies are strong, sound, and effective.

In the first quarter of 2022, China's macro leverage ratio stood at 277.1%, 4.6 percentage points higher than at the end of last year. Since the start of this year, downward pressure on the economy has continued growing because of the unexpected changing international situation and the latest COVID resurgence. The macro leverage ratio, a ratio of a country's total debt to gross domestic product, always increases when economic growth slows. Meanwhile, to respond to the downward pressure and achieve stable macroeconomic performance, we have further planned a package of measures to stabilize the economy. These counter-cyclical macro-regulation policies can affect debt growth in the current period, but their impact on output will not show up until later. As a result, the macro leverage ratio will witness a temporary increase. It is a fair reflection of external shocks, as well as a result of counter-cyclical macro-regulation policies, helping maintain stable macroeconomic performance.

It is clear that despite increasing risks and challenges confronted by China's economy this year, the fundamentals that sustain economic growth remain unchanged. As the country's epidemic situation continues to improve and a package of policies and measures to stabilize the economy begin to deliver, China's economic recovery is gaining steam, creating conditions for maintaining a reasonable macro leverage ratio. Thanks. 

China News Service:

How are the policy-backed and developmental financial instruments faring? How many funds are expected to be leveraged? What's the next plan? Thanks.

Zou Lan:

Thanks for your questions. Policy-backed and developmental financial instruments are temporary steps to replenish project capital and help stabilize the macro economy. With the concerted efforts of various central departments, local governments, and enterprises, some projects have been incorporated into China's key project pool or are undergoing inclusion. Some projects are improving the provision of land, energy, and other factors of production. Some projects are accelerating their preliminary work, such as investment consultation and feasibility research. All these have provided favorable conditions for financial instrument investment. The CDB and the ADBC have been actively engaged in a batch of mature projects. They will speed up investment according to laws and regulations, thus delivering solid results in capital investment and infrastructure construction.

The timely availability of capital funds is a prerequisite for starting a project. As we have learned, several projects have secured the sources of capital funds. Still, they fall short of the requirement of project capital accounting for 20% of the total investment in the infrastructure sector. The insufficiency or untimely availability of capital funds has hindered the construction of some projects. Financial instruments can be tapped in a short time to meet the project capital demands and start a project as soon as possible. As the proportion of financial instruments that can be used as project capital cannot exceed 50%, the share of financial instruments in each project is estimated to be no more than 10%. Once capital is available in full, the initial policy-backed and developmental medium to long-term credit quota of 800 billion yuan will be dispensed promptly, and non-governmental capital such as commercial bank loans will be leveraged. As a result, efforts will be pooled to deliver solid results in project implementation and stabilize the macroeconomy.

The steady operation of policy-backed and developmental financial instruments needs to be underpinned by a raft of supporting policies on the project, capital, and regulation. The PBC will, per the decisions and arrangements of the CPC Central Committee and the State Council, work together with relevant departments to implement those instruments in an orderly manner. There are mainly three aspects of work.

First, we will accelerate the creation and operation of financial instruments. Supported by various departments, the CDB and the ADBC create financial instruments according to procedures. At the same time, we will formulate regulations and strengthen business process management and risk prevention and control to deliver daily operations, post-investment management, and risk control.

Second, we will establish a list of candidate projects. The NDRC is working with various departments, enterprises managed by the central government, and local governments to sort out a list of sufficient candidates who not only have the potential to yield significant social benefits but also are economically viable. In the meantime, we will see faster work, including project approval, preparatory work before launching a project, and putting in place essential factors of production to create more favorable conditions for the two policy banks to accelerate investment.

Third, we will step up project participation. The two banks will strengthen engagement with candidate projects. For investable projects, we will make independent investment decisions in accordance with laws and regulations and market rules. We will see that capital availability is timely and project demands are duly met. As for those projects that are only investable after some policy coordination, the two banks will provide proper feedback and follow through to see that those projects receive investment as soon as possible after certain requirements are met. Thank you. 

CNBC: 

I have three questions. The first one is about China's economic performance. Some economists are worried about whether or not there will be economic stagnation. Has the PBC heeded this concern? Have any countermeasures been planned? The second is a recent PBC survey showing that Chinese people's propensity to save is at its highest in 20 years. What measures will the central bank take to boost consumption? The last question: what's the latest development in digital currency? Thanks.

Zou Lan:

Let me answer the first and third questions, and then Ms. Ruan will answer the second one.

In March and April this year, affected by unexpected factors at home and abroad, China's economy faced increasing downward pressure. As a result, some enterprises and citizens lost their income and balance sheets. Against this background, the government increased its support for the real economy. In the first five months, China's infrastructure investment increased by 6.7%, a 0.5 percentage point higher than the growth rate of the total investment. As part of the macro regulation, these are essential measures to help the economy tide over difficulties. 

It should be noted that the impact of the pandemic is temporary. Since May, the COVID-19 pandemic has gradually eased off in China, and a package of policies and measures launched by the State Council to stabilize the economy have taken effect at a faster pace, with the implementation of fiscal policy, monetary policy, and industrial policy having been stepped up. Major economic indicators have improved significantly, and the national economy has seen a notable rebound. According to financial statistics, credit supply has increased significantly. From January to June, loans to corporations rose by 3 trillion yuan compared to the same period of the previous year, and corporate financing was generally good; due to the impact of COVID-19, household loans increased slower than the same period of the previous year, but have also recovered since June. In the future, with COVID-19 being generally under control, it is expected that the macro-economy will maintain a steady recovery, and the corporate and household balance sheets are expected to be gradually repaired and improved, with credit support remaining strong.

In the next stage, we will continue to encourage enterprises and individuals to expand reasonably. What is the most important is to ensure the steady and efficient operation of production and life, maintain the momentum of economic recovery; stabilize revenues, expectations, and confidence of the real sector of the economy; and further enhance the internal momentum for growth and economic vitality. Acting in accordance with the decisions and arrangements made by the CPC Central Committee and the State Council, the PBC will continue to implement its package of policies and measures to stabilize the economy. The PBC will step up efforts to implement a prudent monetary policy to create a favorable monetary and financial environment and ensure that policies will work together to create synergy and keep economic indicators within a reasonable range. To be specific: 

The PBC will maintain reasonably ample liquidity. The PBC will ramp up credit support for the real economy, see that increases in money supply and aggregate financing are generally in step with nominal economic growth and turn over surplus profits to the central budget ahead of schedule. The PBC will guide policy banks and development banks to increase 800 billion yuan of credit loans and set up 300 billion yuan of financial instruments to support infrastructure construction.

In terms of price, the PBC will give full play to the effectiveness and guiding role of LPR reforms and the role of the market-based adjustment mechanism of deposit rates, guiding financial institutions to transmit the effect of the drop in deposit rates to the loan side and further promote financial institutions to reduce real loan rates.

In terms of structure, the PBC will continue to make good use of structural monetary policy instruments and give priority to providing financial support to key areas. Since the second quarter of this year, the proportion of incentive funds provided by the PBC through inclusive loans to micro and small businesses has risen from 1% to 2%. The PBC will fully utilize the instruments for supporting the reduction of carbon emission and targeted re-lending for the clean and efficient utilization of coals, scientific and technological innovation, public accessible elderly care, and transport and logistics, and will continue to support the development of agricultural businesses and micro and small businesses to create new areas of economic growth.

I would like to make a brief introduction about the latest progress in research and development of the digital yuan. In the first half of this year, in line with China's 14th Five-Year Plan, the PBC, together with participating institutions, with the support of the party committees and governments of the pilot areas, has been steadily and prudently advancing trials of the digital yuan. 

First, the PBC successfully completed pilots of its digital yuan in scenarios, making it the highlight of China's science and technology achievements during the Beijing 2022 Winter Olympics and Paralympics.

Second, the PBC has prudently expanded the pilot areas. Approved by the State Council, the pilot areas have been expanded from the original "10+1" areas to 23 areas in 15 provinces and municipalities. Shenzhen, Suzhou, Xiong'an New Area, and Chengdu have canceled whitelist restrictions and absorbed the Industrial Bank as a new designated operator. 

Third, the PBC has been working on making innovations in application scenarios, extending the reach of digital yuan services. Focusing on maintaining stable macroeconomic performance, the digital yuan has played an active role in ensuring people's wellbeing, stimulating consumption, expanding domestic demand, and ensuring stable growth by means of its distinctive functions, such as smart contracts.

Fourth, the PBC has actively engaged in international exchanges and cooperation, expanding its circle of friends in the use of digital yuan. As of May 31 this year, the transaction volume of the digital yuan in the pilot areas of 15 provinces and municipalities had totaled about 264 million, with transaction value approximating 83 billion yuan. The number of merchant stores supporting digital yuan payments has reached 4.57 million.

Next, the PBC will expand the pilot programs to more cities in a prudent and orderly manner, strengthen the scenario construction and application innovation, carry out research on major issues, and deepen international exchanges and cooperation.

That's all from me for your first and third questions. 

Ruan Jianhong: 

I will answer the second question. According to the depositor survey conducted by the PBC in the second quarter, 58.3% of people surveyed preferred more savings deposits, up 3.6 percentage points from the previous quarter. Meanwhile, 17.9% were inclined to make more investment, down 3.7 percentage points from the previous quarter. The marginal rise in people's willingness to save and the decrease in their willingness to invest was mainly due to the resurgent COVID-19 cases in some parts of China and the increase in people's preference for liquidity. In the meantime, greater volatility in the capital market has lowered people's risk appetite. It is expected that as the pandemic's impact further eases, people's willingness to invest will gradually recover, and their willingness to consume will steadily pick up.

Since the start of this year, household deposits in China, actually not only household deposits but also including enterprise deposits, have seen a significant increase, with deposit interest rates dropping slightly. At the end of June, household deposits stood at 112.8 trillion yuan, up 10.3 trillion yuan from the beginning of this year, which was an increase of 2.9 trillion yuan over the same period of the previous year. Enterprises deposits were 74.9 trillion yuan, rising by 5.3 trillion yuan from the beginning of this year, which was an increase of 3.1 trillion yuan compared to the figure of the same period of the previous year. Financial institutions have increased support for the real economy through loans, bond investments, and other forms, and the corresponding derivative deposits have increased. In addition, in the first half of the year, China issued VAT credit refunds on a large scale, increasing the deposits in the real sector of the economy. 

In June, the interest rates on newly absorbed time deposits dropped significantly to 2.5%, down 16 basis points year on year. The drop in deposit rates is conducive to enhancing financial support for the real economy, including the sustainability of consumption growth.

In the future, both household and enterprise deposits are expected to grow steadily. At the same time, the PBC will continue to deepen reforms to strengthen the market's role in setting interest rates, improve the market-based interest rate mechanism and the transmission mechanism, as well as the central bank's policy interest rate system to promote a reduction in overall financing costs of enterprises. Thank you. 

People's Daily:

We noticed that the PBC introduced a series of structural monetary policy instruments and increased financial support for key areas this year. What effect have these instruments delivered? What's the plan in the future? Thank you.

Zou Lan:

I'll answer your questions. Structural monetary policy instruments have attracted a lot of attention. Just now, Ms. Ruan and I mentioned this topic briefly, and here I would like to give you a more detailed introduction.

Since the beginning of this year, the PBC has introduced three new structural monetary policy instruments. The first is a science and technology innovation re-lending program, which aims to support high-tech enterprises, specialized and sophisticated small and medium-sized enterprises that produce new and unique products, national technology innovation demonstration enterprises, and single-product champion enterprises. The second is a re-lending arrangement for elderly care services, which focuses on supporting eligible institutions to provide publicly-accessible elderly care services and increase their supply. The third is a re-lending program for transport and logistics, which mainly helps highway cargo transport enterprises, truck drivers, and other businesses and individuals greatly affected by the epidemic. In Q4 of last year, the PBC introduced carbon-reduction supporting tool funds and special re-lending to support the clean and efficient use of coal, which are both phased tools. For long-term ones, we issued re-lending and rediscount policies to support agricultural and small enterprises. At present, the toolbox of structural monetary policy has been enriched and improved.

Generally speaking, structural monetary policy instruments focus on key sectors, adopt reasonable and moderate approaches, and build up ample room for maneuver. Meanwhile, a new working mechanism was set up, under which financial institutions are allowed to independently lend money and manage ledgers, the PBC should conduct reimbursement based on an ex-post basis and place a cap on total lending, and relevant departments should specify the purpose of lending and conduct random checks. By doing so, financial institutions are encouraged to optimize their credit structure, and so that their lending can tilt toward key areas, including inclusive finance, green development, and scientific and technological innovation.

So far, the PBC had already allocated 182.7 billion yuan in carbon-reduction supporting tool funds and helped banks to offer 304.5 billion yuan of loans on carbon reduction, which led to over 60 million metric tons of carbon emission reductions. A clean-coal financing program has lent 43.9 billion yuan to businesses. The three new structural monetary policy instruments will be issued on a quarterly basis and will open for application for the first time in July. Currently, the PBC is fast-tracking related procedures.

Next, in accordance with the strategic deployments of the CPC Central Committee and the State Council and the arrangements of a State Council executive meeting, the PBC will continue to make full use of the dual functions of all structural monetary policy instruments so as to better bolster key areas and weak links in the economy. Thank you. 

Bloomberg: 

I have two questions. My first question is, do you see any need or room for the LPR to be lowered in the second half of this year? My second question is, considering the outbreak of civil unrest in Henan due to people being unable to access their savings and the increasingly bad financial position of local government financing vehicles, are you worried about financial risks in the banking system? Do you expect more problems like Henan, and are you worried about the reports that more and more people aren't paying their mortgages? Thank you.

Zou Lan:

In regard to your first question, I will give an introduction about the recent work and effects of the market-based interest rates reform.

In April this year, the PBC guided the establishment of a market-based mechanism to adjust deposit rates in order to promote the further marketization of deposit rates. Members of interest rates self-regulatory mechanism can independently determine their deposit rates reasonably by referring to bond market interest rates represented by yields on China's 10-year government bonds and loan market interest rates represented by one-year LPR. Since the mechanism was established, banks have adjusted their deposit rates based on changes in market-based interest rates. According to our preliminary statistics, in June, the weighted average interest rate of new deposits in banks was about 2.32%, 0.12 percentage points lower than that in April before the adjustment. The establishment of market-based deposit rates adjustment mechanism has significantly improved the pricing capability of market-based deposit rates, maintained a good and competitive deposit market order, stabilized the cost of bank debt, and prompted the reduction of real loan rates so as to better support the development of the real economy.

At the same time, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, the PBC has established and improved the formation and transmission mechanisms for market-oriented interest rates in recent years. We have formed a transmission mechanism where the market interest rates and central bank's guidance affect LPR and then influence loan and deposit interest rates, thus significantly improving the transmission efficiency of monetary policy. Next, the PBC will continue to deepen market-based interest rates reform, consistently unleash the potential of LPR reform, give play to the mechanism of market-based adjustment of deposit interest rates, fully leverage the role of the interest rate self-discipline mechanism, maintain orderly market competition, and promote a further reduction in the actual interest rates of loans to make the market entities benefit from the actual decline in overall financing costs. That's all for my answer, and I think a perspective from the overall developments in market-oriented interest rates may help explain it more clearly. 

Sun Tianqi:

I will answer your second question. Since some rural banks in Henan province were found to be a part of a suspected financial scam, the PBC has actively cooperated with local governments and regulatory authorities to deal with the problem correctly. It has guided its branches to fulfill their duties of maintaining regional financial stability and worked hard to deliver liquidity risk monitoring and emergency support. Overall, China's financial risks have been mitigated and controllable, with 99% of banking assets within the safe boundary. By the end of 2021, the total assets of China's banking institutions reached 345 trillion yuan, accounting for 90% of the total assets of the entire financial industry. It is said that "banking stability means financial stability." The PBC's credit rating results in the fourth quarter of 2021 showed that among the 4,398 participating banking institutions, 4,082, or 93%, were rated at levels of 1-7 and within the safe boundary, making up 99% of total assets of the participants. Among them, 24 large banks have always kept their ratings within the excellent and good levels of 1-5, with their assets accounting for 70% of the total and serving as the ballast of the entire financial industry. There were 316 high-risk institutions rated at 8-D, accounting for 7% of the participating banks but only 1% of the total assets. That is to say, the vast majority of small and medium-sized banks are within the safe boundary in the central bank's credit ratings. Given the data, I hope friends from the media can also report the 4,000-plus banking institutions with favorable ratings while covering the high-risk ones to jointly give all parties an objective, comprehensive and accurate judgment of the overall financial risks. Thank you. 

China Media Group: 

My question is about the newly added credit and social financing. What have been the changes in the general trends in financial data starting from this year? What are the structural features of the newly added credit and social financing increment? What are the expected changes in the field in the second half of this year? Thank you.

Ruan Jianhong:

I will answer your question. The data in the first half of this year showed that the current financial operations are stable on the whole, the financial aggregate grows steadily, the liquidity is reasonably ample, and the support for the real economy is further strengthened. In the first half of this year, new RMB loans registered 13.68 trillion yuan, 919.2 billion yuan more than the same period last year. An additional 21 trillion yuan of social financing was achieved, 3.2 trillion yuan more than the same period last year. 

Regarding the structure of social financing, there are three notable features. First, financial institutions are increasing their credit support for the real economy. In the first half of this year, RMB loans issued by financial institutions to the real economy increased by 13.58 trillion yuan, 632.9 billion yuan more than the same period last year. Second, the direct financing of enterprises grew steadily. Net enterprise bond financing and stock financing amounted to 1.95 trillion yuan and 502.8 billion yuan, respectively, 391.3 billion yuan and 7.3 billion yuan more than in the same period last year. Third, the financial system actively complied with fiscal policies, and the special-purpose bond financing of local governments increased remarkably. Net government bond financing stood at 4.65 trillion yuan, 2.2 trillion yuan more than the same period last year, with special-purpose bonds financing of local governments reaching 3.39 trillion yuan, 2.23 trillion yuan more than the same period last year. 

In terms of the loan structure, first, enterprises and public institutions are getting more support. In the first half of this year, RMB loans to enterprises and public institutions went up by 11.4 trillion yuan, 3.03 trillion yuan more than the same period of last year. Second, the growth of loans slowed in the household sector, indicating that the repeated resurgence of the epidemic in the first half of the year had impacted household consumption to some degree. Household loans increased by 2.18 trillion yuan, 2.39 trillion yuan less than the same period last year. Among these, the consumer and business loans grew by 646.8 billion yuan and 1.54 trillion yuan, respectively, 2.13 trillion yuan and 264.4 billion yuan less than the same period last year. 

Next, the PBC will employ various monetary policy tools in a timely and flexible manner to better play their dual roles of adjusting both the monetary aggregate and structure. It is expected that the credit supply and social financing scale will both maintain steady growth. Thank you. 

Yicai:

How will the PBC judge the economic trend in the year's second half? How will monetary policy support and stabilize the economy in the year's second half? Are there enough tools to deal with unexpected changes? Are there any plans for the interest rate or RRR cuts? Thank you.

Zou Lan:

Let me answer your questions. Since May, under the leadership of the CPC Central Committee and the State Council, with the overall improvement of the domestic epidemic situation, the State Council has accelerated the implementation of a package of measures to stabilize the economy. Fiscal policy, monetary policy, and industrial policy have all stepped up implementation, the national economy has tended to improve, and major economic indicators have marginal improvement. However, the foundation for recovery is not yet solid, and the economic operation in the year's second half still faces great uncertainty and instability. Hard efforts are still needed to stabilize the economy, and at the same time, attention must be paid to changes in the inflation situation.

In recent years, we have adhered to a normal monetary policy, leaving sufficient policy space and tool reserves to deal with new challenges and changes beyond expectations. In the second half of the year, the PBC will continue to implement a sound and prudent monetary policy and accelerate the implementation of the established policy measures, including implementing various structural monetary policy tools introduced earlier and guiding financial institutions to enhance the ability of providing financial services to serve the real economy following the market-based and rule-of-law principles. We will guide policy-oriented development banks to implement an additional 800 billion yuan in the scale of credit loans and set up financial tools of 300 billion yuan to support infrastructure construction. We will complete the annual turn-in of surplus profits to the central government ahead of schedule to help stabilize the overall economy, stabilize employment and ensure people's living standards.

Regarding the RRR cut and interest rate cut you asked about, at present, the weighted average interest rate on 7-day repos between depository institutions in the interbank market, which is what we often call DR007, is currently around 1.6%, which is lower than the rate in the open market operation. Liquidity is maintained at a level that is reasonably sufficient but slightly excessive. From January to June, the corporate loan interest rate was 4.32%, a year-on-year decrease of a 0.31 percentage point, which continues to stabilize with some declines, hitting a new low since statistics. In the future, in accordance with the deployment of the CPC Central Committee and the State Council, the PBC will comprehensively consider economic growth, price conditions, and other fundamentals, rationally match monetary policy tools, maintain reasonably ample liquidity, further promote financial institutions to reduce corporate financing costs, and create a suitable monetary and financial environment for consolidating economic recovery.

We paid great attention to the accelerated tightening of the monetary policy in major economies. We have taken forward-looking measures such as adjusting the foreign exchange deposit reserve ratio and strengthening macro-prudential regulation of cross-border capital flows in the early stage, reducing the negative spillover impact caused by changes in the external environment to a certain extent. The RMB exchange rate fluctuated in two ways and remained at a reasonable level, and cross-border capital flows were generally stable. At the same time, as a super-large economy, China's domestic monetary and financial conditions are mainly determined by domestic factors. The monetary policy will continue to adhere to the orientation of self-centeredness, considering internal and external balance. Thank you. 

China Daily:

In the first half of the year, in which areas did the PBC increase risk prevention and management? What results have been achieved? What is the risk management situation of high-risk financial institutions? What is the focus of work in the second half of the year? Thank you.

Sun Tianqi:

Thank you for your questions. Under the strong leadership of the CPC Central Committee and the State Council, the PBC, together with relevant departments and local governments, followed the basic principles of maintaining overall stability, ensuring coordination, implementing category-based policies, and defusing risks through targeted efforts, fought a tough battle to prevent and defuse major financial risks, and achieved important phased results. The rapid rise in the macro leverage ratio has been effectively curbed. We resolutely disposed of high-risk enterprise groups and high-risk financial institutions, comprehensively cleaned up and rectified the financial order, and effectively reduced the risks of "shadow banking." Financial anti-corruption efforts have been significantly intensified. We strengthened our financial services to serve the real economy and effectively responded to many challenges, such as the COVID-19 pandemic. On the whole, financial risks are restrained and generally controllable, while 99% of banking assets are within the security boundary, and the central bank ratings of most small and medium-sized banks are within the security boundary.

Facing the current complex international and domestic economic and financial situation, financial administration departments must maintain a high degree of vigilance against various financial risks, further lay a solid foundation for preventing and defusing financial risks, and firmly hold the bottom line that systemic financial risks do not occur. The first is to further improve the effectiveness of micro-prudential supervision, continue strengthening the conduct supervision of the financial industry, and strengthen protections for consumers and investors. The second is implementing different classified policies and continuously resolving key financial institutions' risks. The third is to discover early all kinds of illegal business activities that the people detest deeply, identify them accurately, and act resolutely. The fourth is to continue to replenish the capital to small and medium-sized banks through various channels such as local government special bonds, improve corporate governance, and reduce the number of high-risk financial institutions. We will strive to reduce the number of high-risk financial institutions nationwide to fewer than 200 by the end of the 14th Five-Year Plan period. Thank you. 

21st Century Business Herald:

Why can M2 growth rate maintain a high level? How should we view it? Thank you.

Ruan Jianhong:

I will answer it. At the end of June, the M2 money supply reached 258.15 trillion yuan, an increase of 11.4% year on year, and the growth rate was 0.3 and 2.8 percentage points higher than that at the end of last month and the same period of the previous year, respectively. In terms of deposits, in the first half of this year, RMB deposits increased by 18.82 trillion yuan, a year-on-year increase of 4.77 trillion yuan.

At present, RMB deposits have increased more, and the growth rate of M2 is relatively high, mainly due to the efforts of the financial system to serve the real economy, which leads to an increase in derived currencies.

First, financial institutions support the earlier issuance of government bonds. In the first half of the year, the bond investment of financial institutions increased by 4.68 trillion yuan, a year-on-year increase of 2.82 trillion yuan, of which investment in government bonds increased by 2.72 trillion yuan.

Second, various loans increased steadily. In the year's first half, various loans increased by 13.68 trillion yuan, a year-on-year increase of 919.2 billion yuan.

Third, the central bank turned over 900 billion yuan of profits to increase the financial resources available to the government. After fiscal expenditure, the M2 increased by about 0.4 percentage point.

In addition, this year's monetary and fiscal policy was coordinated well, and the pace of fiscal expenditure accelerated, promoting the increase in the M2 growth rate. In the first half of the year, fiscal deposits increased by 506.1 billion yuan, a decrease of 433.8 billion yuan year on year. Thank you. 

Red Star News:

In the first half of the year, what measures have been introduced to help enterprises overcome difficulties and support the development of small, medium, and micro enterprises? How well do they work in stabilizing the economy? Will there be other policies in the next stage? Thank you.

Zou Lan:

I will take your question. Since the beginning of this year, in accordance with the decisions and plans of the CPC Central Committee and the State Council, the PBC has taken the initiative to use monetary policy tools to adjust both the monetary aggregate and the monetary structure early on, increase liquidity provision, strengthen the use of structural monetary policy tools, and enhance the capacity of financial institutions serving the real economy. In addition, we have introduced several policy measures to fully support steady economic growth, keep the operations of market entities stable, and promote employment stability.

First, we have strengthened policy support for enterprises in industries affected by the epidemic. Cooperating with relevant departments, we have issued 23 measures to provide financial services for epidemic prevention and control and to promote economic and social development. We have issued other policies and measures to help businesses in difficulty recover in the service sector, including the restaurant industry. We have also scaled up support for small, medium, and micro enterprises. By implementing measures such as deferred repayment of principal and interest, we have supported businesses facing difficulties in offsetting the impact of COVID-19.

Second, we have strengthened the multi-level coordination between government, banks, and enterprises. We have strengthened coordination with the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT) to promote the sharing and application of credit information and smooth the connection between banks and enterprises through in-person visits and news feed on online service platforms. A national list of 648,000 companies in industries and core supply chain companies affected by the epidemic has been drawn up, with a total of 9.6 trillion yuan of loans offered.

Third, we have deeply carried out projects to improve the financial service capabilities of small, medium, and micro enterprises. We have promulgated a notice on promoting the establishment of a long-term mechanism for financial services for small and micro enterprises to see that they are confident, willing, and able to grant loans, further optimized resource allocation, and improve policy arrangements such as ensuring that those who have fulfilled their duties are not held accountable, increasing the tolerance for non-performing loans, internal fund transfer pricing, and differentiated evaluation of the performance. We have strengthened technological empowerment and product innovation and enhanced financial institutions' willingness, ability, and sustainability to serve SMEs. 

Fourth, we have expanded diversified financing channels. We have supported the issuance of special financial bonds for small and micro enterprises. In the first half of the year, a total of 215.5 billion yuan was issued, which effectively broadened the sources of credit funds for small and medium-sized banks. The Credit Reference Centre of the PBC promoted the Account Receivables Financing Service Platform and gave play to the role of the supply chain bill platform. At the end of June, a total of 365,000 account receivables financings were facilitated, with an amount of 16.7 trillion yuan.

In general, the quality and efficiency of financial services for the real economy have been further improved, and inclusive loans to small and micro enterprises continued to "increase in volume, expand in coverage, and decrease in price." Ms. Ruan also introduced relevant data just now. In May, the weighted average interest rate of newly issued inclusive loans to small and micro enterprises was 5.19%, a decrease of 5 basis points from the previous month.

Next, the PBC will strengthen cooperation with the NDRC, MIIT, and the Ministry of Finance, continue to thoroughly implement policies that have been issued and increase support for the development of industries and enterprises affected by the epidemic, especially small and micro enterprises. These measures will boost the confidence of market players and help maintain stable macroeconomic performance. Thank you.

Xing Huina:

If there are no more questions, today's press conference will be concluded here. Thank you to the three speakers and friends from the media. Goodbye.

Translated and edited by Liu Qiang, Zhou Jing, Xu Kailin, Huang Shan, Xu Xiaoxuan, Zhang Rui, Wang Yiming, He Shan, Lin Liyao, Wang Qian, Zhang Liying, Yang Xi, Li Xiao, 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:

Li Kuiwen, spokesperson of the General Administration of Customs of the People's Republic of China (GACC) and director general of the GACC's Department of Statistics & Analysis

Chairperson:

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

Date:

July 13, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the SCIO. This is a routine press conference on China's annual economic standing. Today, we are delighted to be joined by Mr. Li Kuiwen, spokesperson of the GACC and director of the GACC's Department of Statistics & Analysis, who will introduce China's import and export performance in the first half of 2022 and answer your questions.

We will first invite Mr. Li Kuiwen to give a brief introduction.

Li Kuiwen:

Ladies and gentlemen, friends from the media, good morning. It's a great pleasure to meet with you at today's press conference. I'll begin by introducing China's import and export performance in the first half of 2022, and then answer your questions.

In the first half of 2022, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China has efficiently contained the pandemic while ensuring socioeconomic development. China has strived to maintain stable macroeconomic performance and achieved steady growth in foreign trade. According to statistics from the GACC, China's foreign trade volume in goods in the first half of 2022 jumped 9.4% year on year to 19.8 trillion yuan. Exports grew by 13.2% to 11.14 trillion yuan, and imports increased by 4.8% to 8.66 trillion yuan. Specifically, there were five main features which I will now outline.

First, foreign trade growth in May and June picked up significantly. As the epidemic prevention and control situation improves and pro-growth policies are taking effect, foreign trade enterprises have resumed work and production in an orderly manner since May. In particular, the rapid recovery of imports and exports in the Yangtze River Delta region led to a marked rebound in the overall growth of China's foreign trade. China's foreign trade volume in goods in May was up by 9.5% year on year, 9.4 percentage points higher than in April, and further increased by 14.3% in June.

Second, the proportion of general trade continued to increase. In the first half of 2022, China's general trade rose by 13.1% to 12.71 trillion yuan, accounting for 64.2% of China's total foreign trade volume, 2.1 percentage points higher than the same period last year. Exports increased by 19% to 7.16 trillion yuan, and imports grew by 6.5% to 5.55 trillion yuan. During the same period, processing trade rose by 3.2% to 4.02 trillion yuan.

Third, imports and exports with major trading partners kept growing. In the first half of 2022, China's trade with ASEAN, the EU and the United States reached 2.95 trillion yuan, 2.71 trillion yuan and 2.47 trillion yuan, up by 10.6%, 7.5% and 11.7%, respectively. During the same period, trade with countries along the Belt and Road and RCEP trading partners grew by 17.8% and 5.6%. 

Fourth, foreign trade entities have been further thriving. In the first half of 2022, there were 506,000 foreign trade enterprises in China involved in exports and imports, an increase of 5.5% year on year. The number of private enterprises in China rose by 6.9% to 425,000 with imports and exports increasing by 13.6% to 9.82 trillion yuan, accounting for 49.6% of the country's total, 1.9 percentage points higher than the same period last year. In the same period, imports and exports of foreign-invested enterprises reached 6.75 trillion yuan, up by 2.1%. State-owned enterprises achieved 3.2 trillion yuan in imports and exports, up by 15.2%. 

Fifth, imports and exports of major products enjoyed steady growth. In the first half of 2022, China's imports and exports of mechanical and electrical products grew by 4.2% to 9.72 trillion yuan, making up 49.1% of China's total foreign trade. Imports and exports of agricultural products grew by 9.3% to 1.04 trillion yuan, accounting for 5.2% of China's total. Exports of labor-intensive products grew by 13.5% to 1.99 trillion yuan, making up 17.8% of China's total exports. Imports of energy products including crude oil, natural gas and coal were up by 53.1% to 1.48 trillion yuan, accounting for 17.1% of China's total imports.

In general, China's foreign trade showed strong resilience in the first half of the year. The first quarter got off to a relatively good start. In May and June, the downward trend of growth in April was quickly reversed, laying a solid foundation for the stability and improvement of foreign trade throughout the year. At present, as the COVID-19 situation and international environment have become more severe and complex, China's foreign trade is still facing some instability and uncertainty and a lot of pressure to maintain stability and improve quality. However, it should also be noted that the fundamentals of China's economy — its strong resilience, huge potential and long-term sustainability — remain unchanged. With the implementation of a package of policies and measures to stabilize the economy, and the orderly resumption of work, China's foreign trade is expected to continue maintaining steady growth.

Next, we will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 19th CPC National Congress and the plenary sessions of the 19th CPC Central Committee, and conscientiously implement the important guidelines made by General Secretary Xi Jinping that, "we must contain the epidemic, stabilize the economy and keep development secure." We will efficiently coordinate epidemic prevention and control measures with socioeconomic development, resolutely implement the various deployments of the national video and telephone conference on stabilizing the economy, focus on "guarding the country's borders and promoting development," strengthen supervision and optimize services, and strive to promote the stability and improvement of foreign trade. These efforts will enable us to pave the way for a successful 20th CPC National Congress. 

Now, I would be happy to answer your questions.

Shou Xiaoli:

Now the floor is open for questions. Please identify the media outlet you represent before raising questions.

Zhonghongwang.com:

Since the beginning of this year, the country has adopted a package of policies and measures to stabilize economic growth. Could you share with us the specific actions the GACC has taken to ensure steady, quality, and efficient growth in foreign trade? What results have been achieved so far? Thank you.

Li Kuiwen:

Thank you for your questions. This year, following the guiding principles of the Central Conference on Economic Work, the National Teleconference on Ensuring Stable Economic Performance, and the arrangements of the State Council to promote stable and quality growth in foreign trade, the GACC has rolled out ten measures to stabilize foreign trade and improve its quality, as well as efforts to help enterprises further ease difficulties and lower costs. Local customs branches adopted 854 detailed support measures in light of their specific conditions and the needs of the enterprises. The major measures are as follows:

We are, first, improving logistics efficiency. We have expanded nationwide the pilot practices of enterprises picking up imported goods directly from the ships upon the ships' arrival at the ports and directly loading exported goods onto vessels at the ports by going through the required procedures in advance. We also promoted in Nanjing, Hangzhou, and Ningbo the practice of enterprises confirming certain required information at a time more efficient for transiting imported goods to a new port after testing the practice in Shanghai and Chongqing on a pilot basis. In addition, we have carried out whole-process supervision for the customs clearance of vaccines. We now check the declaration information from enterprises early so that COVID-19 vaccines will not have to be unpackaged for examination or to wait for departure at the ports. Moreover, we set up "green channels" across the nation to import and export fresh and perishable agricultural products and food items. 

Second, we are stabilizing industrial and supply chains. We have guaranteed customs clearance for whitelisted enterprises of key industrial and supply chains. Measures have been taken to facilitate food import and diversify the import sources. We signed quarantine requirement protocols for importing corn from Myanmar, soybean from Malawi, and corn and peanut from Brazil. We have also promoted exporting quality agricultural products from RCEP members to China. In addition, efforts have been made to help ensure the import of major commodities such as iron ore and cotton to guarantee domestic demand. 

Third, we are stabilizing market entities. In the first half of this year, we completed the registration of 73,700 overseas manufacturing enterprises of imported goods in China. We shortened the record filing time of manufacturing enterprises of exported food and completed record filing for 23,500 such enterprises. We accelerated the review of applications for record filing of customs protection of IP rights, and 10,700 records were filed, a year-on-year increase of 58%. Furthermore, we suspended the interest for tax delay for goods of processing trade to be sold in the domestic market, and 14,600 enterprises have benefited from the suspension. 

Fourth, we are improving the business environment of ports. We carried out a five-month special campaign to facilitate cross-border trade in 10 cities of eight provincial-level regions by launching ten trade facilitation measures with relevant departments. We further improved the single-window document processing for international trade to consolidate our achievements in shortening customs clearance time. Following China's reform to streamline the government, delegate power, and improve government services, we have guided over 90,000 enterprises to file records with the customs authority with one unified business license. We have also promoted the reform of integrating all types of customs services, further facilitating foreign trade.

CCTV:

Mr. Li, you just said that China's foreign trade had achieved steady growth in H1. What do you think are the drivers behind it? Do you think the growth momentum can be maintained in the second half of this year? How do you forecast China's foreign trade in H2? Thank you.

Li Kuiwen:

Thanks for your questions. In H1, China's foreign trade grew steadily, maintaining positive growth for eight consecutive quarters. The foreign trade volume has grown steadily to 19.8 trillion yuan (US$2.95 trillion), which has contributed to a stable macroeconomic performance. The growth of China's foreign trade, in my opinion, is attributed to the following aspects:

First, the international market demand is relatively stable. Since this year, despite the rising external risks caused by the COVID-19 pandemic and the Ukraine crisis, the global economy is generally picking up, and the international market demand is stabilized. In H1, China's export of electrical equipment and products, integrated circuits, and automobiles have increased by 24.8%, 16.4%, and 51.1%, respectively. The export of labor-intensive products like textiles and garments, plastic products, and footwear rose by 10.8%, 14.9%, and 31.4%, respectively.

Second, the demand for domestic production is high. This year, faced with a complex external environment and economic downside pressure brought by the COVID-19 pandemic, the CPC Central Committee has effectively coordinated epidemic control and socioeconomic development, which has helped stabilize the macroeconomic performance. The demand for domestic production gradually recovered, providing strong support for import growth. In H1, China's import in copper products, basic organic chemical products, and integrated circuits grew by 16.2%, 7.9% and 5.5%, respectively.

Third, the rapid recovery of import and export in some regions have firmly stabilized the overall state of China's foreign trade. This year, the Yangtze River Delta region, the Pearl River Delta region, and China's northeast had seen cluster cases of COVID-19, which has resulted in the slump of their foreign trade. But after the epidemic has been quickly taken under control, these regions have seen a rapid recovery in foreign trade with growth rates turning negative to positive. Their strong resilience in foreign trade have also helped stabilize China's overall foreign trade performance. In May, these three regions have seen their imports and exports grow by 4.8%, 2.8%, and 12.2% year-on-year, respectively, and their growth rate further picked up to 14.9%, 6.4%, and 12.8% year-on-year in June, respectively.

Fourth, the vitality of market entities has been effectively stimulated. As the country's policy measures to stabilize the economy have taken effect, the work related to increasing both the volume and quality of imports and exports is rapidly progressing, and the vitality of market entities in China's foreign trade market have been effectively stimulated. In H1, the number of companies with visible progress in foreign trade grew by 5.5% year on year. Various businesses in foreign trade maintained growth in both imports and exports. The import and export of private enterprises grew by 13.6%, 4.2 percentage points higher than the average growth, and these private businesses have contributed 6.5 percentage points to the growth of China's foreign trade.

Moreover, the high international commodity prices, to some extent, have also driven the growth of import value. In H1, the Thomson Reuters/CoreCommodity CRB Index, which reflects the fluctuations of international commodity prices, has grown by more than 25%. Against this background, the average import prices for crude oil, natural gas, and coal visibly picked up and have driven the growth rate of the overall import value.

I won't repeat my forecast on future foreign trade because my earlier remarks have already covered this part. It is fairly to say that China's foreign trade is faced with some instabilities and uncertainties, as well as some positive factors. I think we are still on a solid foundation to steadily increase both the volume and quality of imports and exports. Thank you.

Phoenix TV:

You mentioned that imports and exports in the Yangtze River Delta region have rebounded rapidly. Could you explain the situation in more detail? And what work has the GACC done to promote the local recovery of foreign trade? Thank you.

Li Kuiwen:

Thank you for your questions. According to statistics of the GACC, in the first half of 2022, the imports and exports in the Yangtze River Delta region, including Jiangsu, Anhui and Zhejiang provinces, as well as Shanghai, reached 7.14 trillion yuan, an increase of 9.3% year on year. In June, the region's imports and exports rose 14.9% year on year to 1.39 trillion yuan, 0.6 percentage point higher than the overall growth rate of the country in the same period, contributing nearly 40% to the growth of foreign trade. Specifically, in June, imports and exports of Anhui province, Jiangsu province and Zhejiang province increased 19.7%, 17.5% and 16% respectively, which were 5.4 percentage points, 3.2 percentage points and 1.7 percentage points higher than the overall growth rate of the country in the same period. Shanghai has been severely affected by the epidemic. In June, its imports and exports regained positive growth, up 9.6% year on year and 35.6% month on month.

During this period, we have thoroughly implemented the decisions and arrangements of the CPC Central Committee and the State Council, set up special task groups to strengthen coordination and promotion, and introduced special supporting measures to ensure smooth customs clearance and promote the development of foreign trade in the Yangtze River Delta region. We have adopted four main approaches:

First, we have prioritized ensuring front-line human resources. Shanghai Customs promptly arranged working groups to enter key ports such as those in harbors and airports at the earliest opportunity during the regional lockdown in Shanghai. Over 1,300 officers and staff at customs operation sites stayed at their posts to ensure normal operation and improve the operation efficiency of Shanghai's ports.

Second, we have helped enterprises engage in rapid customs clearance. We have prioritized the approval and inspection of imported goods necessary for people's everyday lives, such as grain, meat and natural gas. For emergency supplies, such as medical supplies, first-aid equipment and spare parts, we worked closely with enterprises throughout the whole process. We provided guidelines for them to make inspection appointments online and implemented unaccompanied inspections for rapid customs clearance. We also established a coordination work mechanism to ensure smooth customs clearance in the Yangtze River Delta region. Targeted measures have been implemented to speed up the circulation of goods for import and export in the region. We set up a customs clearance green channel for key supplies from key enterprises, created information sharing platforms, and ensured the rapid customs clearance of goods for import and export in Shanghai ports during the epidemic outbreak.

Third, we have actively helped to smooth foreign trade logistics. We promoted expansion of the supervision model of directly transferring goods between maritime transport vessels and Yangtze River transport vessels, and sped up customs clearance for urgently needed goods. At eligible ports, we have advanced trials of direct unloading for imported goods and direct loading for export goods. Going forward, we will further advance the customs supervision model of waterway logistics in key areas of the Yangtze River Delta region, support expansion of the pilot of departing confirmation model, and continuously improve the efficiency of waterway logistics. We will support enterprises to open rapid customs clearance rail services and improve the facilitation of railway logistics in China.

Fourth, we have coordinated and solved problems reported by enterprises. We have improved the long-term mechanism for serving enterprises, actively coordinated and promoted solving problems and demands of enterprises, effectively guaranteed customs clearance of goods for import and export for white list enterprises, helped enterprises solve difficulties, and ensured the safety, stability and smooth running of industrial and supply chains. 

Next, we will continue to implement the deployment requirements of the State Council to ensure logistics run smoothly and maintain the stability of industrial and supply chains, and fully support enterprises to resume work and production. Thank you.

Bloomberg:

You have just talked about the measures that the GACC has taken to boost imports and exports. My question is mainly about overseas demand. As we have seen, the United States, European, and many other countries are facing the risk of recession, with their global demand declining. What do you think of the growth in international demand in the coming year? My second question is: How do you view the future export growth without regarding the price factor? Thank you.

Thank you for your questions. As I have just said, the international market demand maintained relatively stable, which has opened up broad space for China's export. As for the trend of the second half of the year, as I have said, China's economy is strong and has great potential, and the long-term economic growth remains unchanged. Although there are still some unstable and uncertain factors, our domestic production demand is gradually recovering and improving. Besides, enterprises have resumed production at a fast pace. Therefore, imports and exports will maintain steady growth in the second half of the year. Thank you.

Beijing Youth Daily:

How did China's imports and exports with other BRICS countries go in the first half of the year? What efforts have been made by the customs in promoting the economic and trade development between China and other BRICS countries? And how do you evaluate the prospect? Thanks.

Li Kuiwen:

Thank you for your questions. As the BRICS chair this year, China held the 14th BRICS Summit recently. Here I would like to make an introduction about our trade with other BRICS countries. Since the BRICS Summit started in 2009, China has seen increasing trade with other BRICS countries, and the imports and exports registered 3.17 trillion yuan in 2021 from 960.21 billion yuan in 2009, with an average annual growth of 10.5%. In the first half of the year, China's imports and exports with other BRICS countries totaled 1.64 trillion yuan, up 14.1% year on year, 4.7 percentage points higher than China's total foreign trade growth. Among them, exports leaped by 20.6% to 817.18 billion yuan; imports jumped by 8.3% to 825.82 billion yuan. Specifically, it shows the following features:

First, China's trade with other BRICS countries has registered a steadily increasing proportion in its total foreign trade. In the first half of the year, China's imports and exports with other BRICS countries accounted for 8.3% of its total foreign trade, up 0.2 percentage point from 2021 and 1.9 percentage points from 2009.

Second, imports of energy and agricultural products grew rapidly. In the first half of the year, China imported 298.98 billion yuan of crude oil, natural gas, coal, and other energy products from other BRICS countries, up 53.3%, accounting for 36.2% of its total imports with other BRICS countries; China's imports of agricultural products expanded 15.6% to 185.46 billion yuan, accounting for 22.5% of its total imports with other BRICS countries.

Third, exports of mechanical and electrical products accounted for more than half, and exports of new energy products increased significantly. In the first half of the year, China's exports of mechanical and electrical products to other BRICS countries reached 455.5 billion yuan, up 16.2%, accounting for 55.7% of the total exports to these countries. Exports of solar and lithium-ion batteries increased by 99.7% and 67.3%, respectively. In the same period, exports of labor-intensive products reached 106.65 billion yuan, up 7.3%. 

I would like to take this opportunity to introduce the recent work of customs authorities in promoting the economic and trade development of China and other BRICS countries.

The GACC successfully organized a series of events this year, including a meeting of BRICS heads of customs administrations, customs working group arrangements, and customs enforcement cooperation seminars to promote pragmatic cooperation among BRICS countries in various fields. Relevant achievements have been brought into the 14th BRICS Summit Beijing Declaration. We have made our efforts in the following four aspects:

First, the legal basis for customs cooperation has been enhanced. We actively facilitated the Agreement Between the Governments of BRICS Countries on Cooperation and Mutual Administrative Assistance in Customs Matters. This will provide a solid legal basis for BRICS countries to carry out mutual administrative assistance, capacity building, law enforcement cooperation, and jointly safeguard trade security and facilitation. 

Second, an intelligent cooperation consensus has been reached. Upholding the philosophy of cooperation of smart customs, smart borders, and smart connectivity, we promoted the construction of smart infrastructure for customs exchanges of BRICS countries and the smart practice of supervision and administration, carried out coordinated cross-border governance of border administration departments step by step, promoted smart connectivity and alignment of standards among customs authorities and other stakeholders along supply chains to boost connectivity of industrial and supply chains. 

Third, customs law enforcement cooperation has been deepened. Guided by the principle of collaboration, co-governance, and common gains, we built a customs enforcement contact platform and capacity-building platform for BRICS countries. We promoted cooperation in areas of information exchanges and joint actions. We enabled smart collaboration to empower customs law enforcement, discussed the application of bid data analysis and artificial intelligence in law enforcement, and enhanced the law enforcement capacity to deal with new forms of smuggling to jointly build a defense line of customs with other BRICS countries. 

Fourth, cooperation on customs capacity building has been strengthened. Making full use of the customs training center of BRICS countries in Xiamen, we carried out training exchanges and prepared for a strategic seminar on customs capacity building of BRICS countries. We promoted capacity-building cooperation in customs technologies, joint law enforcement, and talent training. 

Next, customs authorities will conscientiously implement the guiding principles of General Secretary Xi Jinping's speech at the 14th BRICS Summit. We will comprehensively deepen international customs cooperation among BRICS countries and further promote the economic and trade development of our country and other BRICS countries. We are full of confidence in the future economic and trade development of the BRICS countries. 

Thank you!

TV Tokyo:

China's customs have not released the quantity of pipeline gas imported from Russia since January this year, and we would like to know this data. Also, what is the reason for not releasing the data? What do you think of the recent China-Russia trade? Thank you.

Li Kuiwen:

Thank you for your questions. Regarding your first question, since the release of statistical data for 2022, customs have continued to release the amount of gaseous natural gas online, and no longer published the data for multi-dimensional statistical groups other than the total import volume. This is mainly to protect the legitimate commercial rights and interests of relevant import and export consignees and consignors and to meet the needs of various data users for analyzing and using customs statistics. This practice is also in line with the international standards. Internationally, there are many countries that do not publish the amount and value of gaseous natural gas grouped by statistical items such as trading partners. Next, customs will continue to ensure data release and statistical services in accordance with the law.

Regarding your second question, let me brief you on relevant trade data. According to customs statistics, in the first half of this year, China's trade with Russia totaled 519.08 billion yuan, and that with Ukraine 35.3 billion yuan. Thank you.

Tianmu News:

The ninth edition of COVID-19 prevention and control guidelines has shortened the quarantine time for inbound arrivals, which actually puts forward higher requirements for epidemic prevention and control at points of entry. We want to know how customs are doing in science-based and targeted epidemic prevention? Thank you.

Li Kuiwen:

Thanks for your question. Customs resolutely implement the decisions and plans of the CPC Central Committee and the State Council, adhere to the general strategy of preventing imported cases and domestic resurgences and the general policy of dynamic zero-COVID, and strictly and unremittingly take various measures to prevent and control the epidemic at ports. After the ninth edition of COVID-19 prevention and control guidelines was issued, customs have followed the principles of "ensuring epidemic prevention and control in compliance with the law, enhancing coordination, and taking science-based and targeted measures covering different levels and categories," and focused on optimizing the work processes involving sampling and testing of inbound personnel, the proportion of inbound cargo aircraft randomly boarded for quarantine inspection, the epidemic prevention and control for imported goods, and the closed-loop management system for staff in high-risk positions of customs. Customs organized the revision and release of the ninth edition of the technical plan for COVID-19 prevention and control at ports to guide customs at all levels to continue to do well in the pandemic prevention and control at ports, prevent the cross-border spread of the pandemic, ensure the health and safety of people entering and leaving the country, and avoid unnecessary disruption to international traffic and trade.

Regarding more information, my colleague Li Zhengliang, deputy director general of the department of health quarantine at the GACC, made a detailed introduction at a press conference held by the State Council's inter-agency task force on July 8.

It is worth mentioning that since the outbreak of COVID-19, customs staff across the country have devoted themselves a total of 2.47 million times to epidemic prevention and control on the front line, among which they carried out 86,000 missions entering the closed-loop management area. Every day, more than 3,500 officials wear protective suits to fight the virus directly, and more than 20,000 officials perform their duties on the front line against the epidemic. Having worked for more than 900 days, they practice the great spirit of combating COVID-19 with actions.

Next, the GACC will continue to dynamically improve port quarantine measures in accordance with the unified deployment of the State Council's inter-agency task force, strengthen joint prevention and control, and effectively guard the country's ports.

Thank you!

CCTV Agricultural Rural Channel:

My questions are to Mr. Li. How was China's export of agricultural products in the first half of this year? What are the highlights? Thank you.

Li Kuiwen:

Thank you for your questions. In the first half of this year, China's export of agricultural products grew by 21.7% year on year to 303.1 billion yuan. Among them, exports of aquatic products rose by 14.9% to 72.52 billion yuan, vegetables and, edible mushrooms rose by 5.5% to 37.79 billion yuan, and canned food rose by 55% to 13.75 billion yuan, respectively. It is fair to say that exports of major agricultural products have maintained a steady growth. In the first half of this year, China's import of agricultural products reached 736.07 billion yuan, a year-on-year increase of 5%. Among them, imports of grain increased by 16.6% to 272.48 billion yuan, accounting for 37% of China's total import of agricultural products during the same period. Import of meat dropped by 16.4% to 89.79 billion yuan, and import of aquatic products rose by 34.1% to 54.08 billion yuan. This is the introduction of China's import and export of agricultural products. Thank you.

Shou Xiaoli:

Last question, please.

ThePaper.cn:

Private enterprises witnessed an outstanding export performance in the first half of this year, accounting for nearly half of the total. Would you like to elaborate on the features of their import and export performances? Thank you.

Li Kuiwen:

Thank you for your question. Starting this year, China has introduced a series of policies and measures to maintain steady increases in both the volume and quality of imports and exports and help companies to tide over difficulties, which energized the market entities 'dealing in foreign trade. In the first half of this year, the number of foreign trade firms registering import and export business rose by 5.5% year on year. Among them, the number of private enterprises grew by 6.9% to 425,000, posing a better performance than overall growth figures. The major features are as follows:

First, in terms of growth rate, import and export of private enterprises grew by 13.6% to 9.82 trillion yuan in the first half of this year, up 4.2 percentage points compared to overall growth, and its share in China's total imports and exports increased by 1.9 percentage points from the previous year to 49.6%, thus further reinforcing the principal position of private enterprises in China's imports and exports.

Second, in terms of product mix, in the first half of this year, export volume of machinery and electronics products produced by private enterprises grew by 15.3%, 6.7 percentage points higher than overall export growth rate. Import volume of agricultural products, basic organic chemicals, pharmaceutical materials, and medicines increased by 6.4%, 14%, and 33.1%, respectively, all outperformed the overall import growth rate.

Third, in terms of market share, in the first half of 2022, while maintaining the growth of imports and exports with traditional markets such as the U.S., Europe, the ROK, and Japan, private enterprises ratcheted up in expanding emerging markets, with their imports and exports with ASEAN, Latin America, and five Central Asian countries up by 20.5%, 16.4%, and 53.3% respectively, all higher than the overall growth.

It is fair to say that the steady growth of China's imports and exports in the first half of 2022 was largely attributable to the strong vitality of various market entities dealing in foreign trade. We focused on ensuring security in the operations of market entities and introduced 10 measures to maintain steady increases in both the volume and quality of imports and exports. Recently, we introduced another seven measures to further help companies to ease their difficulties and lower their costs. For example, for companies affected by COVID-19 and having difficulties in running businesses, if they couldn't pay their taxes in timely but could pay their overdue payments within a set period of time, these companies can be exempted from overdue fines. The request for third-party examination was removed for companies applying for exemption of tariffs and import-related tax on returned products. The requirement to provide proof of warehouse was canceled for companies applying for a quarantine license on imported fruits. The inspection process of imported coatings was streamlined and the Recordation Form for Imported Coatings was no longer checked. Efforts were also made to adjust and improve the inspection requirements for imported crude oil and coal. 

Next, we will implement in earnest the policies and measures to help companies to tide over difficulties and work to maintain the steady increases in both the volume and quality of China's foreign trade. Thank you!

Shou Xiaoli:

Thank you, Mr. Li and friends from the media. Today's press conference is hereby concluded. See you next time. 

Translated and edited by Wang Yiming, Wang Qian, Yuan Fang, Liu Qiang, Guo Yiming, Liu Sitong, Yan Xiaoqing, Yang Xi, Zhang Tingting, Wang Wei, Ma Yujia, Zhang Rui, Zhang Liying, Cui Can, 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:

Guo Lanfeng, member of the Communist Party of China (CPC) Leadership Group of the National Development and Reform Commission (NDRC)

Wang Jianfan, director general of the Budget Department of the Ministry of Finance

Wang Xin, director general of the Research Bureau of the People's Bank of China (PBC)

Zhang Hu, member of the Standing Committee of the CPC Guangdong Provincial Committee and executive vice governor of the People's Government of Guangdong Province

Guo Yonghang, deputy secretary of the CPC Guangzhou Municipal Committee and mayor of the Guangzhou Municipal People's Government

Chairperson:

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

Date:

June 24, 2022

Xing Huina:

Friends from the media, good afternoon. Welcome to this press conference held by the SCIO. Recently, the State Council issued the Master Plan of Guangzhou Nansha on Deepening Comprehensive Cooperation between Guangdong, Hong Kong and Macao with Global Perspective. This press conference will brief you on the document and take your questions. In addition to the main venue here in Beijing, today's press conference is also being held live in Guangzhou, Guangdong province. Joining us today in Beijing are Mr. Guo Lanfeng, member of the CPC Leadership Group of the NDRC; Mr. Wang Jianfan, director general of the Budget Department of the Ministry of Finance; and Mr. Wang Xin, director general of the Research Bureau of the PBC. We are also being joined live by local officials in Guangzhou, including Mr. Zhang Hu, member of the Standing Committee of the CPC Guangdong Provincial Committee and executive vice governor of the People's Government of Guangdong Province; and Mr. Guo Yonghang, deputy secretary of the CPC Guangzhou Municipal Committee and mayor of the Guangzhou Municipal People's Government.

Now, I'll give the floor to Mr. Guo Lanfeng for his brief introduction.

Guo Lanfeng:

Ladies and gentlemen, friends, good afternoon. Thank you for your interest in and support for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and especially the major cooperation platform in Guangzhou's Nansha district. I would like to take this opportunity to express my sincere thanks to friends from all walks of life for their interest and support in the construction of the GBA.

Nansha district enjoys great geographic advantages, enormous development potential and a strong industrial foundation. As Guangzhou, Hong Kong and Macao have strong willingness for cooperation, Nansha bears unique advantages in promoting their comprehensive cooperation. In September 2012, the State Council approved the Development Plan for the Nansha New District of Guangzhou, requiring Nanshan to roll out construction and deepen comprehensive cooperation with Hong Kong and Macao. In February 2019, the Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area further specified Nansha's role in promoting cooperation between Guangdong, Hong Kong and Macao, joining hands with Hong Kong and Macao to build a portal for high-level opening-up, jointly building a demonstration zone for innovative development, establishing a major platform for financial services, and creating a high-quality living environment. In recent years, in accordance with the decisions made by the CPC Central Committee and the State Council and the arrangements of the central leading group for the construction of the GBA, we have worked with Guangdong, Hong Kong, Macao and relevant government bodies to draw up the Master Plan of Guangzhou Nansha on Deepening Comprehensive Cooperation between Guangdong, Hong Kong and Macao with Global Perspective, and submitted it to the State Council for publication and implementation. The Nansha plan was published a few days ago.

The Nansha plan, consisting of seven sections and 26 articles, is a fundamental document to promote Nansha's development. It involves the following aspects:

It has phased objectives for 2025 and 2035, respectively. The plan proposes main targets in the fields of sci-tech innovation systems and institutional arrangements, public service capacity and business environment, to name a few.

It also stipulates five major tasks. First, industrial cooperation bases for sci-tech innovation will be built in Nansha. The master plan stresses strengthening collaboration in sci-tech innovation between Guangdong, Hong Kong and Macao, building major sci-tech innovation platforms, developing high-tech industries and pooling high-level international talents. Second, cooperation platforms for startups and youth employment will be established in Nansha. The master plan requires coordinated measures in promoting youth innovation and entrepreneurship, and calls for efforts to improve support for internships and employment and strengthen people-to-people exchanges among the youth. Third, joint efforts will be made to build Nansha into a portal for high-level opening-up. The master plan stipulates that a comprehensive service base for Chinese enterprises going global will be built in Nansha. Measures will also be taken to enhance Nansha's role as an international shipping and logistics hub, strengthen global economic cooperation and build Nansha into a new platform for international communication. Fourth, a mechanism for aligning rules and regulations will be established in Nansha. The master plan notes that a world-class business environment will be built in Nansha, with efforts promoting connectivity in its financial markets in an orderly manner and improving the coordination between public services and social management. Fifth, Nansha will also be built into a model for high-quality urban development. The master plan stresses increasing cooperation in urban planning and development, steadily promoting smart cities, steadily advancing educational cooperation between Guangdong, Hong Kong and Macao, facilitating medical treatment and elderly care for Hong Kong and Macao residents and intensifying joint efforts in ecological protection and treatment.

The plan also stresses boosting support from four aspects: strengthening Party leadership in a comprehensive manner, increasing policy support such as for funding and other factors, creating new models for cooperation, and intensifying organization and implementation efforts.

The Nansha plan will help inject new vitality into an old city like Guangzhou, make new progress in the city's comprehensive urban functions, cultural capacity, modern service industry and its modern and global business environment, and enhance the city's role as the core and engine for the development of the GBA. The master plan will help improve Nansha's urban services in the areas of shipping, trade, finance and international communication, helping Nansha join hands with Hong Kong and Macao to build a high-level opening-up portal, and allowing it to play a bigger part in promoting and building the new development paradigm. The plan also helps create a major strategic platform for the comprehensive cooperation between Guangdong, Hong Kong and Macao, enriches the practice of "one country, two systems," and supports Hong Kong and Macao's engagement in the country's overall development.

Going forward, we will earnestly implement the decisions made by the CPC Central Committee and the State Council and follow the arrangements of the central leading group for the construction of the GBA. We will work with relevant government bodies to increase communication and coordination, keep track of the progress and spare no efforts to support Guangdong province and Guangzhou city in carrying out the Nansha plan, in a bid to put Nansha's high-quality development on a steady and sustained course.

Thank you.

Xing Huina:

Thank you. Next, I will invite Mr. Zhang from the Guangzhou branch to give an introduction.

Zhang Hu:

Ladies and gentlemen, friends from the media, good afternoon. Thank you for your care and support for Guangdong's development. On June 14, the State Council officially issued the Master Plan of Guangzhou Nansha on Deepening Comprehensive Cooperation between Guangdong, Hong Kong and Macao with Global Perspective. The plan was also introduced to support turning Nansha into a major strategic platform based on the GBA, coordinate the development between Hong Kong and Macao, and work with a global outlook. Following last year's introduction of plans for cooperation zones in Hengqin and Qianhai, this plan is another major decision and deployment for the building of the Guangdong-Hong Kong-Macao GBA made by the CPC Central Committee with Comrade Xi Jinping at its core, offering Guangdong new major opportunities and missions and injecting new and strong impetus into Nansha's development. We are inspired, encouraged, and motivated. We are more aware of the far-reaching layout of the Party and our country's undertakings made by the general secretary and the Party Central Committee. We also have a deeper understanding of their care for Guangdong and the great historical responsibility Guangdong shoulders. Yesterday, Li Xi, secretary of the Guangdong Provincial Committee of the CPC, presided over the meeting of the standing committee of the CPC Guangdong Provincial Committee, conveyed and studied the master plan, and discussed the opinions on implementing the plan in our province. He stressed that in accordance with the deployment and requirements of the CPC Central Committee, we must fully support further deepening opening up in Nansha to boost the comprehensive cooperation between Guangdong, Hong Kong, and Macao with a global outlook. He also emphasized that we must fully support 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 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. Today, Wang Weizhong, governor of Guangdong province, presided over the executive meeting of the provincial government and discussed and deployed relevant work. Going forward, we will continue to follow the requirements of the CPC Central Committee, stick to the development direction of the GBA, coordinate the needs of Hong Kong and Macao, and give full play to the role of Guangdong. We will also fully enforce the arrangements of the Party Central Committee and the State Council and work jointly with Hong Kong and Macao to achieve the great goals of the master plan step by step.

First, we will keenly organize people to study, publicize and implement the master plan. We will deeply study and implement the important speeches and guiding principles of the general secretary on the building of the Guangdong-Hong Kong-Macao GBA and for the development of Guangdong and Guangzhou. We will have an in-depth understanding of the significance of the introduction and implementation of the master plan in big-picture terms and from a strategic perspective and accurately grasp the principles and requirements of further deepening opening up in Nansha to boost comprehensive cooperation between Guangdong and Hong Kong, and Macao with a global outlook. We will study and fully promote the implementation of the master plan together with cooperation zone schemes for Hengqin and Qianhai, and effectively align our thoughts and actions with the decisions and deployment of the general secretary and the CPC Central Committee, setting off a massive wave of studying, publicizing and implementing the master plan across the whole province.

Second, we will try to promote the implementation of key tasks. We will establish and improve the mechanisms for organizing, leading, coordinating, and pushing forward our work. The chief officials of the provincial Party committee and the provincial government will take the lead and be in charge of the overall work, the other relevant officials will be responsible for the specific work, and joint working groups at the city- and province-level will be set up. Focusing on the major tasks in five aspects proposed in the master plan, we will specify the key points of the reform, policy, and work, make a list and set up account books, conduct research and analysis, and launch specific platforms, projects, policies, and measures, to accelerate the implementation of the master plan with the joint efforts of the province and its cities.

Third, we will improve the policy planning and supporting system. We will accelerate the introduction of the acting scheme for the implementation of the master plan, formulate provincial-level policies and measures to support Nansha's development, be quick to put forward specific rules for implementing key policies, kick off a new round of the compilation of development plans for Nansha, and strengthen support for Nansha by delegating more power to the district.

Fourth, we will strengthen communication and coordination with Hong Kong and Macao in all respects. We will focus on the goal of turning Nansha into an important carrier to provide strong support for better integrating Hong Kong and Macao into the country's overall development. Nansha will be supported to deepen the connection of rules and mechanisms with Hong Kong and Macao in key areas such as scientific and technological innovation, industrial development, people's livelihood integration, cultural exchange, and urban development, among others. Professionals and talent with a global vision from Hong Kong and Macao will be actively invited to participate in the construction and management of Nansha district.

Thank you.

Xing Huina:

Thank you. Now the floor is open for questions. Please identify the media outlet you represent before raising questions.

CCTV: 

The Nansha plan clearly states that accelerated efforts will be made to build a scientific and technological innovation industry cooperation base, a youth entrepreneurship and employment cooperation platform, a high-level opening-up portal, a high ground for convergence of rules and mechanisms, and a model of high-quality urban development in Nansha. Please tell us what are the considerations for determining these five tasks? What specific measures are there? Thank you.

Guo Lanfeng:

Thank you for your questions. The Nansha plan clearly intends to deepen the comprehensive cooperation between Guangdong, Hong Kong and Macao in Nansha. When we say "comprehensive cooperation," it not only means that we cover Hong Kong and Macao, but also that this kind of cooperation is not limited to some specific aspects, but will cover all key areas of economic and social development. To this end, the plan focuses on such key tasks as scientific and technological innovation, innovative employment, opening up to the outside world, rule convergence, and urban development, and therefore deploys the five tasks. The main considerations and specific measures are:

First, constructing a scientific and technological innovation industry cooperation base. Guangdong, Hong Kong, and Macao are rich in scientific and technological innovation resources. The Nansha plan has put forward many powerful measures to strengthen cooperation in scientific and technological innovation among Guangdong, Hong Kong, and Macao. Among the measures, corporate income tax will be levied at a reduced rate of 15% for enterprises in industries that are being encouraged in the pioneering zones; Hong Kong and Macao residents working in Nansha will be exempted from the portion of their personal income tax that exceeds the tax burden of Hong Kong and Macao. All these measures are expected to greatly boost the gathering of high-tech enterprises and talents in Nansha.

Second, creating a youth entrepreneurship and employment cooperation platform. The Nansha plan clearly includes eligible Hong Kong and Macao residents into the scope of local entrepreneurship subsidies, strengthens the guarantee of supporting services for employment, and provides convenient conditions for accommodation, commuting, and children's enrollment in kindergartens and schools so as to promote the establishment of a hot spot for Hong Kong and Macao youths to innovate and start businesses here.

Third, jointly building a high-level opening-up portal. Nansha is one of the important intersections of the domestic and international circulations and has the unique advantage of connecting the two markets and utilizing the resources of the two. The Nansha plan proposes that Nansha will play an important role in strengthening international economic cooperation and other aspects. According to it, Nansha will study how to further reduce the access threshold for Hong Kong's professional service industry to provide services in the mainland, and rely on Guangzhou, especially Nansha's industrial and market foundation, to join hands with Hong Kong and Macao to continuously deepen international economic and trade cooperation and promote the construction of a new high ground for opening up to the outside world.

Fourth, creating a high ground for convergence of rules and mechanisms. Convergence of rules and mechanisms is one of the key points and difficulties in developing the Guangdong-Hong Kong-Macao GBA. When the rules are connected and converged, the flow of factors will be smooth. The Nansha plan requires Nansha to actively explore and promote the "soft connection" of the rules and mechanisms in the aspects such as improving the level of connection with Hong Kong's and Macao's financial markets, public services, and social management. The plan clearly supports Nansha's pilot projects in cross-border motor vehicle insurance, cross-border commercial medical insurance, etc., and promotes the convergence of the rules of the GBA in depth.

Fifth, establishing a model of high-quality urban development. Accelerating the development and construction of Nansha is an important measure for old city Guangzhou to gain new vitality and make new and outstanding achievements in comprehensive urban functions, comprehensive urban cultural strength, modern service industry, and modern international business environment. The Nansha plan explicitly states that Nansha should deepen cooperation with Hong Kong and Macao in the fields of urban planning and construction, smart city management, and eco-environmental protection so as to promote the modernization of the urban governance system and governance capacity and create a high-quality living circle that is suitable for living, working and traveling.

The five tasks set in the Nansha plan points out the main direction for the construction of a major cooperation platform for Guangdong, Hong Kong, and Macao in Nansha. Next, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, we will work with relevant departments and the governments of Guangdong province and Guangzhou city to continuously deepen our understanding and promote the implementation of these tasks with substantial results. Thank you! 

Southern Metropolis Daily:

The Nansha plan put forward supportive policies in taxation and funding, among others. What are the main considerations here? Thank you.

Wang Jianfan:

The building of the Guangdong-Hong Kong-Macao GBA is a major strategy made by the CPC Central Committee, and Nansha is one of the major cooperation platforms for that. To promote the development of Nansha in deepening the comprehensive cooperation between Guangdong, Hong Kong and Macao, the State Council released the Nansha plan — an overall plan for the development of Nansha — and made related fiscal and tax policy arrangements. Our considerations are in the following aspects:

First, to attract factors of innovation to gather in Nansha and boost the building of a sci-tech innovation hub in the area. Preferential tax policies will be in place. We will extend the loss carryforward period for high-tech enterprises in key industries. The enterprise income tax rate will be reduced to 15% for enterprises in encouraged industries in Nansha's pioneering zones. We will support eligible one-stop business start-up platforms to enjoy tax-preferential policies for incubators of sci-tech companies in accordance with the rules. We will work to implement the import tariff policies that support sci-tech innovations and encourage Nansha to further gather innovation resources and boost the vitality for innovation.

Second, to better take advantage of Nansha's location and create favorable conditions for residents from Hong Kong and Macao to work and live in Nansha. For residents from Hong Kong and Macao who work in Nansha, we will exempt the portion of income tax exceeding that in Hong Kong or Macao, helping our compatriots from Hong Kong and Macao to enjoy more convenience in starting businesses, getting jobs, and living in Nansha. Efforts will be made to support Hong Kong and Macao in integrating their own development into overall national development. 

Third, given the expenditures arising from Nansha's rapid development, we will guarantee financial support for the high-quality building of the district. To support the accelerated development of Nansha, from 2022 to 2024, the Ministry of Finance will set the ceiling for newly-incurred local government debt at 10 billion yuan on an annual basis, which will be dedicated to five major building tasks of Nansha. Support will be given to major projects that are expected to enjoy better benefits and growth prospects and will take a demonstrative and leading role. At the same time, based on the fiscal strength of local governments, debt risks, and the financing needs of projects, Guangdong province will weigh its supporting policies toward Nansha while allocating relevant fiscal budgets and new quotas of local government bonds. The funds will be devoted to developing infrastructure and public service facilities in Nansha.

Next, the Ministry of Finance, together with other departments, will work out detailed policies clearly outlined in the Nansha plan, ensure them to be well implemented, and give play to the role of policies in helping build Nansha into a major global-oriented strategic platform in the GBA that brings together Hong Kong and Macao. Thank you.

GRT:

According to the Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, Nansha district will fully leverage its strength as the state-level new area and the pilot free trade zone (FTZ), enhance comprehensive cooperation with Hong Kong and Macao, and accelerate its development to carry the functions of international shipping and scientific and technological innovation for the GBA and become a gateway of high-standard opening-up. Since Nansha plan has made clear requirements in terms of the strategies of "going global", how will Nansha district cooperate with Hong Kong and Macao to further advance its institutional opening-up? Thank you.

Zhang Hu:

Thanks for your questions. The master plan takes global perspective as one of the important strategic positioning of Nansha district's development, requiring Nansha district to play a leading role in the Guangdong-Hong Kong-Macao GBA's participation in international cooperation and competition, and work together with Hong Kong and Macao to build a gateway to high-standard opening-up. Going forward, we should have an accurate understanding of the opening-up orientation for Nansha district, focus on international and domestic markets and resources, giving full play to the role of the GBA as the pacesetter for institutional innovation, the gateway of opening-up, and the hub of comprehensive services. We should work with Hong Kong and Macao to build an institutional system and regulatory model that are consistent with the international rules to achieve high-quality "bringing in" and high-standard "going global" and continuously improve global resource allocation capabilities, making positive contributions to accelerating the construction of a new pattern of development. The priority of our work will be given to the following four aspects:

First, we will improve comprehensive services for the strategies of "going global." We will align with the development needs of countries and regions along the Belt and Road routes and fully leverage both the strengths of Hong Kong and Macao, such as intensive international connections and developed professional services. This will also include the strengths of the GBA, such as vast mainland market, complete industrial system, and strong scientific and technological strength to fully support the development of modern service industry clusters in Nansha district. We will jointly advance the international economic and trade cooperation, develop an integrated online and offline system of one-stop comprehensive services for international investment and financing, and build a comprehensive service base for Chinese companies to "go global."

Second, we will further develop it into an international shipping and logistics hub. We will work with Hong Kong and Macao to enhance the role of the GBA as the international shipping hub, deepen cooperation in key areas such as shipping logistics, shipping finance, maritime services, and cruises and yachts. We will also promote the cross-border and cross-region integration of maritime service resources, and accelerate the construction of major projects such as Phase IV of the Guangzhou Nansha Automated Deepwater Port. We will support Guangzhou Shipping Exchange to expand shipping exchange and other services and work with Hong Kong and Macao to build a Joint Shipping Exchange Center in the GBA. We will accelerate the development of maritime services such as ship management, inspection and testing, and maritime dispute resolution and create an international maritime service industry cluster district.

Third, we will strengthen its role as an engine for international economic cooperation. We will support Nansha district in pursuing the high-quality implementation of the Regional Comprehensive Economic Partnership (RCEP) agreement and actively align with the rules in high-standard international free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA). We will conduct more stress tests to accumulate experiences in advance. We will actively foster stronger synergy and cooperation with developed economies in the fields of the digital economy, technology finance, and green development. We will support enterprises to participate in the making of international rules and standards, contributing to China's participation in the reform of the global economic governance system.

Fourth, we will further build it into a new platform for international exchanges. We will jointly advance practical exchanges and cooperation with the Belt and Road Initiative countries and regions, global major FTZs, international ports, business associations, and international organizations. We will hold international-themed events such as the annual meeting of the International Financial Forum (IFF) and the Greater-bay Science Forum and create an international economic cooperation platform for the GBA to synergize with the Belt and Road Initiative. We will encourage and guide major business associations of Hong Kong and Macao to set up representative offices in Nansha district and actively introduce Hong Kong and Macao professionals and talents with global vision to participate in the construction and management of Nansha district to accelerate the modernization and internationalization of Nansha district's development.

Thank you.

21st Century Business Herald:

The Nansha plan is another major strategic deployment of the Chinese government to further promote the development of the Guangdong-Hong Kong-Macao GBA. How has Nansha's development been up to now, and what kind of foundation has it laid for the Nansha plan in the future? How will you build Nansha into a strategic platform in the GBA that coordinates with Hong Kong and Macao and connects with the world? Thank you.

Guo Yonghang:

Thanks for your questions. Since the 18th CPC National Congress, General Secretary Xi Jinping and the Party Central Committee have paid close attention to Nansha's development. In 2014, Nansha district became a pilot FTZ. During his inspection tour in Guangdong in 2018, General Secretary Xi Jinping stressed the need to plan, develop, and construct Nansha district well. In 2019, the Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area proposed building Nansha district into a demonstration zone of comprehensive cooperation between Guangdong, Hong Kong, and Macao. Thanks to these multiple benefits, Nansha ushered in a new stage, and its development accelerated significantly. Last year, the Nansha district's GDP exceeded 200 billion yuan, and the world's top 500 companies invested in 223 projects there. Its R&D investment intensity reached 3.67%, and a "1+1+3+N" system for S&T innovation was initially formed. A total of 749 institutional innovation results were achieved, 43 of which have been promoted nationwide. More than 2,700 Hong Kong and Macao enterprises have settled in the district with an investment volume of US$117 billion. The Guangzhou Futures Exchange, the Greater Bay Science Forum, and International Financial Forum were also set up and held in Nansha.

Located at GBA's geographical heart, Nansha district is in the center of the bay area, covering an area of 803 square kilometers and with a development intensity of 23%. Renowned universities, institutions, and research centers are therefore attracted to Nansha: The Hong Kong University of Science and Technology (Guangzhou) will open in autumn of this year, the middle school affiliated with the South China Normal University and Zhixin High School will open campuses in Nansha, and two national medical centers of Guangdong will also settle in Nansha. With outstanding advantages and beneficial policies, Nansha's future development enjoys favorable timing, geographical convenience, and the people's support. 

The plan, which makes Nansha a major strategic platform,puts forward five objectives and requirements. We will strengthen the Party's leadership in all respects, bear in mind the country's most fundamental interests, and seize the opportunity and grasp this historic opportunity so as to follow the principles of innovation, practicality, and precision and live up to the mission of our times.

In terms of innovation, we will carry forward Guangzhou's spirit of reform and innovation, stay enterprising and innovative, and set new standards in order to accelerate alignment with the rules and mechanisms of Hong Kong and Macao. A world-class business environment that can attract both domestic and international enterprises will be established. We will work together with Hong Kong and Macao to build Nansha into a comprehensive service base for Chinese enterprises going abroad, a new model for global resources allocation, and a new platform for international exchange. Nansha strives to become a strategic node in fostering a new development paradigm.

In terms of practicality, we will take a pragmatic approach, make concrete efforts and aim to deliver when cooperating with Hong Kong and Macao. The Guangzhou laboratory is encouraged to strengthen research cooperation with Hong Kong and Macao, and other laboratories in Guangdong province are urged to set up branches or bases in Hong Kong. We will facilitate cross-border use of fiscal research funds and boost research institutions to jointly carry out S&T innovation projects. Tapping into Hong Kong's "super-connector" role and Macao as a bridge connecting with Portuguese-speaking countries, Nansha will drive the commercialization and application of international S&T achievements. Efforts will be made to introduce investment, deepen cooperation in industrial and supply chains, construct a demonstration zone for young Hong Kong and Macao entrepreneurs, improve relevant policy and service systems, and strengthen the supply of education, medical care, elderly care, and other services for Hong Kong and Macao residents.

In terms of precision, we will pursue elaborate planning, targeted construction, and sound growth so as to promote high-quality development. The development plan of Nansha district will be revised, and regulations of Nansha on deepening comprehensive cooperation between Guangdong, Hong Kong, and Macao with a global perspective will be formulated. Protection and inheritance of history and culture will be strengthened, and a national demonstration zone for ecological friendliness will be created. We will build the smartest urban district and fine-tune our efforts in urban management. Smart manufacturing, digital industries, high-end service industries, and industries related to reinforcing the marine industry through technology will be developed. We will also build a modern industrial system featuring green and low-carbon technologies. Thank you.

Hong Kong Commercial Daily:

Financial support for the real economy is a highlight of Nansha's development and a focus of the Nansha plan. What measures has the PBC taken to promote Nansha's development through financial support? What are your plans for the future? Thank you.

Wang Xin:

Thank you for the questions. The PBC attaches great importance to developing the GBA and Nansha, a critical platform for cooperation between Guangdong, Hong Kong, and Macao. Under the leadership of the CPC Central Committee and the State Council, we have strengthened financial support to boost Nansha's high-quality development, aid with Nansha's role in deepening comprehensive cooperation between Guangdong, Hong Kong, and Macao, and build a major strategic GBA-based platform with a global outlook. In terms of top-level design, we have introduced 15 financial reform measures for Nansha, the Guidelines on Financial Support for the Development of China (Guangdong) Pilot Free Trade Zone, the Opinions on Financial Support for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area, and other targeted documents. Regarding the connectivity of financial markets, we officially launched the Cross-boundary Wealth Management Connect Scheme in the GBA last October, expanding cross-boundary wealth management channels for residents in the GBA, including those in Nansha. To facilitate cross-border investment and financing, the State Administration of Foreign Exchange launched a pilot program for high-standard opening-up of cross-border trade and investment in Nansha last November and introduced 13 specific measures. Free trade accounts and cross-border capital pool business have also been launched in Nansha. In terms of financial leasing, we have vigorously boosted the concentration and innovative development of the sector, and several new transactions, such as cross-border aircraft subleases, have been launched in Nansha. In terms of green finance, the Guangzhou Futures Exchange was unveiled in Nansha, developing products that can serve low-carbon and green development, such as carbon emission rights, electricity, and new energy metals. In terms of risk prevention, we have supported Nansha in building a local financial risk monitoring and prevention platform for Guangdong province and continuously enhanced risk monitoring and prevention abilities. Overall, finance has become a pillar industry in Nansha. Just seven or eight years ago, Nansha started to develop its financial sector from scratch. In 2015, the value-added of the financial sector was almost negligible. In 2021, the value reached 17.15 billion yuan and accounted for 8.05% of Nansha's GDP. A total of 6,650 financial enterprises have settled in Nansha, an increase of 54 times within seven years. The tax contributions paid by the financial sector increased at an average annual growth rate of nearly 60% from 2016 to 2021.

Going forward, the PBC will continue to implement the decisions and plans of the CPC Central Committee and the State Council, support the development of Nansha's modern financial sector in collaboration with relevant departments, and promote the implementation of various innovative measures such as high-standard opening-up of cross-border trade and investment, push forward financial market connectivity in an orderly manner, improve risk prevention and control abilities while pursuing opening-up, and provide strong financial support for Nansha to build a critical platform for cooperation between Guangdong, Hong Kong, and Macao, and to better play a leading role in the development of the GBA.

Thank you.

Phoenix TV:

Currently, Nansha also attaches great importance to scientific and technological innovation. Voices from Hong Kong ask if this will be a challenge to Hong Kong and other places? How to better leverage their complementary advantages for cooperative development? Thank you.

Guo Yonghang:

Thank you for your question. General Secretary Xi Jinping has stressed that the core position of innovation in the overall modernization drive must be upheld and innovation must be actively encouraged and supported as a national policy. Any innovator, regardless of where they come from, will be supported by us as long as they contribute to national development. The plan's release marks that the development and construction of Nansha has gained national significance, thus giving Nansha great responsibility. Nansha should not and will not be absent in China's efforts to enhance its independent scientific and technological capabilities and foster a new development paradigm.

In recent years, under the strategic guidance of the Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, the development of both Guangzhou and the Nansha district has become more integrated with that of Hong Kong and Macao, showing sound momentum of integration and mutual promotion. For example, in terms of sci-tech infrastructure, a team of professors from the Hong Kong University of Science and Technology (HKUST) studied cycling aerodynamics with the "Tianhe-2" supercomputer installed in the Nansha branch of the National Supercomputer Center in Guangzhou, thus helping Hong Kong athlete Lee Wai-sze win a precious medal in track cycling at the Tokyo Olympic Games. Data showed that over the past five years, more than 200 HKUST teachers used the National Supercomputer Center in Guangzhou, which is as convenient as using a local area network. For another example, in terms of implementing major sci-tech special projects, the Southern Marine Science and Engineering Guangdong Laboratory (Guangzhou), which is located in Nansha, has set up a branch in Hong Kong, and the laboratory allocated 38 million yuan in cross-border scientific research funds to the branch in 2019, the first of its kind by a mainland city. Over the past two years, Guangzhou, Hong Kong, and Macao have also made vigorous research cooperation against the pandemic.

The plan emphasizes coordination with Hong Kong and Macao, thus pointing out the path for Nansha's development. It also emphasizes a global perspective, which is a shared goal for the development of Guangdong, Hong Kong, and Macao. In fact, the needs and aspirations of Nansha are just the strengths of Hong Kong and Macao. For example, in terms of facilitating the transfer and application of international advances in science and technology, the strength of Hong Kong as a "super contact person" and the strength of Macao as a bridge connecting to Portuguese-speaking countries are incomparable. At the same time, Nansha has an outstanding advantage in industrialization. Therefore, cooperation is far greater than competition for Nansha, Hong Kong, and Macao.

A Chinese saying says, " When brothers are of the same mind, they have the power to cut through metal." We will follow the top-level design from the central government and commit to complementarity of advantages and coordination to strengthen joint innovation among Guangdong, Hong Kong, and Macao. Efforts will be made to accelerate the progress of a number of major projects, including the big science facilities for cold-seep ecosystem observation and simulation, the Southern Marine Science and Engineering Guangdong Laboratory (Guangzhou), the Mingzhu Science Park of the Chinese Academy of Sciences, and the Headquarters Base for the Transfer and Application of HKUST's Scientific and Technological Innovation Achievements. We will actively support Nansha as a destination of transfer and application of Hong Kong's innovation achievements in electronic engineering, computer science, marine science, artificial intelligence, smart city, and other fields. We will strive to make the pie of cooperation bigger and better so we can all enjoy more pie. Thanks!

Macao Daily:

The central government has rolled out a series of supporting policies and measures in recent years to bolster the development of the GBA, such as the plans for Hengqin and Qianhai. And now comes the Nansha plan. How are they different from one another regarding functions and positions? What's unique about the Nansha plan? Thank you.

Guo Lanfeng:

Thank you for your question. The three platforms- Hengqin in Zhuhai, Qianhai in Shenzhen, and Nansha in Guangzhou, are major cooperation platforms announced in the Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. Last September, the CPC Central Committee and the State Council issued the General Plan for Building the Guangdong-Macao In-depth Cooperation Zone in Hengqin and the Plan for Comprehensively Deepening Reform and Opening-up for the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. This June, the State Council introduced the Master Plan of Guangzhou Nansha on Deepening Comprehensive Cooperation between Guangdong, Hong Kong, and Macao with a Global Perspective. The Hengqin plan focuses on the original aspiration of promoting Macao's moderate economic diversification and aims to serve Macao's development and advance its integration with Hengqin. The plan defines the strategic position of the zone as a new platform to boost Macao's moderate economic diversification, a new space that provides convenience to Macao residents' life and employment, and a new model to enrich the practice of "one country, two systems," as well as a new high ground for building the GBA. The Qianhai plan is mainly about expanding the existing zone and further opening up. Centering on promoting the modern service industry - one of Hong Kong's competitive industries, it aims to deepen cooperation between Shenzhen and Hong Kong and jointly build a test platform for comprehensively deepening reform and innovation as well as a high-level gateway for opening up. It is set to provide more space for Hong Kong's economic development and accumulate experience for the reform and opening-up of Shenzhen and the mainland beyond. The plans for Hengqin and Qianhai emphasize serving Macao and supporting Hong Kong, respectively, to further advance the Guangdong-Hong Kong-Macao cooperation.

Highlighting two key components -- "comprehensive cooperation in the GBA" and "a global perspective," the Nansha plan stresses synergetic development between Nansha and Hong Kong and Macao for a wider opening-up of the GBA. The project is attributed to the domestic and global landscape and the foundations of Nansha's development. The two components were our focus during the Nansha plan's compilation. 

On the one hand, we consistently pursue synergetic development between Nansha, Hong Kong, and Macao. We firmly bear in mind the critical mission of supporting Hong Kong and Macao's integration into overall national development, improving Hong Kong and Macao compatriots' well-being, and maintaining longstanding prosperity and stability in the two special administrative regions. In the strategic context of developing the GBA, we are giving full play to Nansha's advantages. We are using exchange mechanisms like the Guangdong-Hong Kong Cooperation Advisory Committee and major cooperation platforms like the Hong Kong University of Science and Technology. We coordinate the "hard connectivity" of infrastructure with the "soft connectivity" of rules and mechanisms. We attach more importance to industrial cooperation on science and technology innovation as well as youth's employment and business start-up and accelerate factors' efficient and convenient flow in the GBA to promote extensive consultation, joint contribution, and shared benefits in the region.

On the other hand, we consistently open up to the world. To build a new development paradigm, we explore resources in both domestic and global markets and synergize with Hong Kong and Macao in establishing an institutional system and regulation mode conforming to international rules and norms. Leveraging the rules of international high-level free trade agreements, we actively integrate into the global market to realize high-quality "bringing in" and "going global" and increase the GBA's edge in terms of international cooperation and competition. 

Despite their unique strategic positions, the three cooperation platforms of Hengqin, Qianhai, and Nansha mutually reinforce each other, with a view to piloting critical links in key areas and accumulating experience. They are expected to power extensive cooperation in the GBA, expand development space for Hong Kong and Macao, support their socio-economic development, and sustain their longstanding prosperity and stability. Thank you.

CRNTT:

The Nansha plan proposed to build Nansha into a new home for Hong Kong and Macao youths by creating a cooperation platform for youth entrepreneurship and employment. In particular, it aims to raise the number of residents from Hong Kong and Macao in Nansha significantly by 2035. Could you share with us what measures Guangdong has made in this regard? What key policies and measures will Guangdong take next in attracting Hong Kong and Macao youths? Thank you. 

Zhang Hu:

Thank you for your questions. General Secretary Xi Jinping stressed that efforts must be made to create more opportunities for young people in Hong Kong and Macao and help them solve practical difficulties and problems in their study, employment and starting up of businesses and create a social environment favorable for them to realize their dreams. In recent years, Guangdong has actively supported and facilitated innovation, entrepreneurship, and employment among Hong Kong and Macao youths in the province. We have initially established a "1+12+N" system of innovation and entrepreneurship incubators for Hong Kong and Macao youths, under which "1" refers to the Guangdong-Hong Kong-Macao Greater Bay Area (Guangdong) Innovation and Entrepreneurship Incubator, "12" refers to the twelve key incubators in the Pearl River Delta, and "N" refers to the various distinctive incubators spread across Guangdong. With this system, we have incubated 2,394 projects for Hong Kong and Macao youths and attracted 3,455 Hong Kong and Macao youths to work in Guangdong. We have also organized job fairs for college students of the Guangdong-Hong Kong-Macao GBA and offered nearly 100,000 job and internship vacancies to Hong Kong and Macao youths. The master plan has listed cooperation in youth entrepreneurship and employment as one of its five priorities, with unprecedented expectations, support, favorable policies, and rare opportunities.

Next, Guangdong will actively seize the major opportunities presented by the master plan and let more Hong Kong and Macao youths share the development opportunities of the GBA, better integrate into national development and actively participate in national construction with good resources, conditions, and platforms. The following three areas will be our key priorities.

First, we must create opportunities and coordinate youth innovation and entrepreneurship efforts. We will improve the construction of key innovation and entrepreneurship projects such as the GD, HK & Macao (International) Youth Entrepreneur Hub and the Cultural Innovation Community for Guangdong, Hong Kong, and Macao Youths. We will introduce innovative management modes for these projects and expand their services to foster a quality ecosystem for innovation and entrepreneurship. We will push ahead with efforts for qualified one-stop innovation and entrepreneurship platforms to enjoy the preferential tax policies offered to tech enterprise incubators in accordance with rules. We will also include qualified business starters from Hong Kong and Macao under the coverage of entrepreneurship subsidies of Nansha and let them equally enjoy such support policies as guaranteed loans and interest subsidies.

Second, we must improve the environment and provide a better guarantee for jobs and internships. We will accelerate efforts to build a public platform for comprehensive employment services. Nansha's program for Hong Kong and Macao youths to work in local enterprises will be further implemented to align with the Greater Bay Area Youth Employment Scheme and the Thematic Youth Internship Programs on the Mainland of the government of the Hong Kong Special Administrative Region. We will also explore ways for public institutes, statutory institutes, and state-owned enterprises in Nansha to recruit youth talents from Hong Kong and Macao. Besides, we will make it more convenient for Hong Kong and Macao professionals to work and practice in Nansha with improved policies and services for them in various aspects from entry and exit, housing, transport, and education to healthcare and social security and medical insurance. We will work wholeheartedly to see that Hong Kong and Macao youths can work in Nansha worry-free. 

Third, we must build bridges to strengthen cultural exchanges among youths. We will work to do a good job in building the headquarters for exchanges among youths of Guangdong, Hong Kong, and Macao, actively carry out cooperation on study tourism of teenagers, and build up several distinctive brands of exchange programs. We will tap Guangzhou's advantages as the place of origin of the Maritime Silk Road, the center for Lingnan culture, and its forward position for reform and opening up. We will work with Hong Kong and Macao to hold various forms of cultural and art activities to guide teenagers of Guangdong, Hong Kong, and Macao to actively participate in the protection and utilization of major cultural heritages and constantly boost their sense of belonging to the motherland and sense of identity to the "one country, two systems" principle. Thank you.

Xing Huina:

Thank you to all speakers and friends from the media. Today's press conference is now concluded. 

Translated and edited by Cui Can, Wang Wei, Xu Kailin, Ma Yujia, Lin Liyao, Liu Qiang, Zhang Liying, Zhang Junmian, He Shan, Zhou Jing, Wang Qian, Zhu Bochen, Yuan Fang, Zhang Tingting, 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:

Li Bin, vice minister of the National Health Commission (NHC)

Lei Zhenglong, deputy head of the disease control and prevention division of the NHC

Liang Wannian, head of the Expert Group of the Epidemic Response and Disposal Leading Group of the NHC

Chairperson:

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

Date:

April 29, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Informational Office (SCIO). Today's press conference is about upholding the dynamic zero-COVID policy to prevent and control the pandemic. Today, we are joined by Mr. Li Bin, vice minister of the National Health Commission (NHC); Mr. Lei Zhenglong, deputy head of the disease control and prevention division of the NHC; and Mr. Liang Wannian, head of the Expert Group of the Epidemic Response and Disposal Leading Group of the NHC. They will brief you on relevant information and then take your questions.

Now, I'll give the floor to Mr. Li Bin.

Li Bin:

Friends from the media, good morning. Since the outbreak of the COVID-19 pandemic, the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core has always put protecting the people and human life above everything else. By bearing in mind the big picture, taking science-based actions, and following objective laws, the CPC Central Committee has consistently adhered to the overall strategy of "preventing inbound cases and domestic resurgence" and carrying out the general policy of dynamic zero-COVID. Our practices on pandemic prevention and control over the past two years and more have proven that the dynamic zero-COVID approach, namely controlling and treating every confirmed case once detected, protected the health and safety of the people to the greatest extent possible and minimized the pandemic's impact on the national economic and social development. This is a correct approach with effective results and the best means to secure victory in China's anti-pandemic fight.

Since the end of February this year, given the spread of highly contagious and stealthy Omicron sub-variant, China has seen frequent flare-ups of COVID-19 cases in multiple places, with a large swathe of areas affected. Pandemic prevention and control efforts have faced the most daunting challenge since the pandemic broke out in Wuhan. In response, we have been unswervingly carrying out the dynamic zero-COVID policy. We have immediately coordinated resources concerning nucleic acid tests, epidemiological investigation, case transfer, quarantine, and treatment and worked to contain the spread of the pandemic to the greatest extent possible. Cluster infections in Jilin province and many other places have been effectively contained, and the dynamic zero-COVID approach has achieved initial success in Shanghai. The number of confirmed COVID-19 cases in China has seen a fluctuating downward trend.

We are facing a pandemic of a scale unseen in a century. The baseline level of COVID-19 cases worldwide is still very high, and new COVID variants continue to develop. We are still trying to understand the coronavirus and the pandemic, and the risks and threats posed by COVID-19 still exist. China is a highly populous country with considerable regional differences and inadequate medical resources. Relaxing prevention and control measures will create surging COVID-19 infections in a short period of time, which can soon lead to a significant number of severe and death cases. This will put an overwhelming strain on our medical resources and pose a severe threat to the life and health of the vulnerable group, such as patients with underlying medical conditions, senior citizens, children, and pregnant women. The stable development of China's economy and society will also be severely affected.

Since the pandemic broke out, China was one of the first countries to successfully contain the spread of COVID-19, resume work and production, and realize positive economic growth among major economies worldwide. A stable epidemic situation has offered China the most favorable environment to secure its world-leading economic growth and pandemic prevention position. Ensuring a coordinated national response and carrying out localized and stringent anti-pandemic measures is the most cost-efficient way. This makes sure that people in most regions in China can enjoy everyday life and work.

From the anti-pandemic fight in Wuhan and the nationwide routine COVID-19 control to the targeted and whole-process prevention and control of Delta and Omicron variants, China has always been upholding the general policy of dynamic zero-COVID approach and controlling and treating every confirmed case once detected. Our practices have proven that the dynamic zero-COVID approach is the best choice currently to coordinate pandemic prevention and control with social and economic development. This approach is a bottom line that China must safeguard for pandemic prevention and control.

The dynamic zero-COVID policy does not indicate absolute "zero infection." Facing the challenges posed by COVID-19 variants such as Omicron, we cannot eliminate domestic resurgence. However, China has summarized a set of effective prevention and control measures from our practices. We optimize these measures according to the emerging coronavirus variants and new pandemic conditions. We will firmly achieve unity in thinking and action to carry out anti-pandemic measures further, consolidate preventive efforts and enhance our implementation capacity. We will also ensure that local authorities, administrative bodies, employers, and individuals have taken their respective responsibilities in pandemic prevention and control. When domestic resurgence happens, we can confidently take swift actions and precise and comprehensive measures to clear all COVID-19 cases in the shortest period of time and realize the most effective containment with the most negligible costs.

That is all the essential information I have for you. Now my colleagues and I are ready to take questions. Thank you. 

Shou Xiaoli:

Thank you, Mr. Li Bin. Now the floor is open. Please identify your media outlet before raising your questions. 

CGTN:

Some people think that China is a large country with different situations in different places. Thus the dynamic zero-COVID policy should be flexible and adjusted to reflect local conditions. I wonder what your take on that is? Also, is it possible to co-exist with the coronavirus in some places and adopt the dynamic zero-COVID policy in other areas? Thank you. 

Li Bin:

Thank you for your questions. This has drawn the attention of both the press and the general public. COVID-19 prevention and control is an all-out war, and therefore we need to think of the big picture and ensure a coordinated national response. Only when the pandemic is brought under control can we safeguard people's life and health and create favorable conditions for people's everyday life and work. Only when every city in China sticks to a dynamic zero-COVID policy and contains its local outbreak can the entire country win the fight against the pandemic. If certain areas do not resolutely uphold the dynamic zero-COVID policy, while trying to make an exception, the virus could spread and rapidly cause an outbreak. These places could even become an transmitter and amplifier of the outbreak, leading to spillover to other cities and regions, causing heavy loss of people's life and property, and severely affecting social and economic development. 

But under the general dynamic zero-COVID policy, we encourage local areas to explore good experiences and measures according to their particular situations in order to be more scientific and precise in COVID prevention and control and achieve maximum results with minimum costs. Thank you. 

Beijing Youth Daily:

Some people argue that though Omicron spreads quickly, many of the infected show mild or no symptoms, and thus China could choose to "lie flat" when responding to COVID. I wonder what your take on this is? Thank you. 

Li Bin:

This argument has also drawn the attention of many people. I'll ask Mr. Liang Wannian to take it. 

Liang Wannian:

Thank you. From a global perspective, countries choose their COVID prevention and control strategies and measures based on their prevention and control principle. China's principle has always been putting people first and putting life first. In other words, it is people-centered and health-centered. Under this principle, we adopted the general dynamic zero-COVID policy and have continuously optimized and improved our measures according to the changes in the pandemic. Through our efforts, we managed to protect our people from the harm brought by so-called herd immunity and natural immunity, protect the health and life of the overwhelming majority of our people, and protect the everyday life, work, and economic development of the largest areas of China. 

Some countries have two kinds of immunity. On is natural herd immunity, which, means that people get infected naturally by COVID-19, and then a large percentage of the population gets infected. The other is vaccination-induced immunity. China achieves its immunity through vaccination and build a safety net. Currently, more than 3.3 billion doses of COVID-19 vaccines have been administered on the Chinese mainland, covering 90% of its population. However, disparities remain. In particular, the gaps in vaccination rates in different ages and regions still exist. If we work harder to raise the vaccination rate for vulnerable groups like the elderly and children, we can set up proactive immunity barriers. Compared with uncontrollable passive immunity, we prefer proactive immunity.

As a country with a large population, China faces imbalanced development among regions, shortages of medical resources, and inequality in resource distribution. As I have mentioned earlier, the vaccination rates for the elderly and the children are not high enough generally. In the face of repeated outbreaks, if we choose the so-called policy of coexisting with the virus, medical resources would be very likely to be overwhelmed, thus threatening the health of patients with background diseases, elderly people, children, and the pregnant. Meanwhile, that would deal a heavy blow to economic and social development. Under such circumstances, we must stick to the general principle of dynamic zero-COVID. Indeed, we must improve and optimize prevention and control measures during the time window. If we step up efforts in vaccination and accelerate R&D of medicines and vaccines, I think we can seize the chance. We will defeat the virus if we have a high vaccination coverage, especially for those older people and other vulnerable groups, all localities are well equipped with medical resources, quarantine beds, effective medicines applicable in a large scale, material supplies, and emergency mechanisms, the virus becomes milder without worse or new variations and an acceptable death rate, and we make use of the time saved by the dynamic zero-COVID policy.

Thank you.

Bloomberg:

What is the biggest lesson you've learned from the mistakes that were made in Shanghai in containing the outbreak? And separately on vaccination, why doesn't China compel elderly people to get vaccinated like you have for students and other population groups? What is an acceptable vaccination rate for those over 80 that China would be comfortable opening up under? Thank you.

Li Bin:

Thank you for your two questions. We invite Mr. Lei to answer the question about the vaccination of the elderly and Mr. Liang to answer the question about what lessons Beijing should draw in epidemic prevention and control.

Lei Zhenglong:

Thank you for your question. In accordance with the arrangements of State Council's inter-agency task force, the NHC has continued to guide local governments to push forward with vaccination in a proactive and well-considered way. As of April 28, 3.340711 billion COVID-19 vaccine doses had been administered across the Chinese mainland. A total of 1.284935 billion people had been vaccinated, and 1.249688 billion had been fully vaccinated, accounting for 91.14% and 88.64% of the total population, respectively. A total of 750.189 million people had got a booster shot, among whom 29.967 million had got sequential booster jabs. About 227.088 million people aged 60 and above had been vaccinated, and 215.155 million had been fully vaccinated, registering 86.01% and 81.49% of the age group, respectively. A total of 160.425 million people in the group had got a booster shot.

So far, the overall work of vaccination has been going smoothly. We are taking orderly steps to administer booster shots, and the vaccination coverage rate of senior citizens has been gradually increasing. Recently, the NHC has made further arrangements to mobilize senior citizens to get vaccination shots. 

First, we will see that local governments fulfill their responsibilities. Local governments must fully recognize the significance and urgency of the need for the elderly to get vaccinated. The actual situation of the senior population within their jurisdictions should be checked proactively so that further arrangements for their vaccination can be implemented and their safety can be ensured.

Second, we will give full play to the role of departments responsible for the welfare of the elderly people. To further increase the vaccination coverage rate of the elderly group, the office of the China National Committee on Aging has specifically issued a notice in advance on better promoting the vaccination among the elderly group. The notice has guided local governments to give full play to the role of social organizations related to the work for the elderly group and encouraged all localities to work together to ensure the safe and convenient conditions of the vaccination for the elderly. 

Third, we will intensify our efforts on publicity and mobilization. In combination with the China Prophylactic Vaccination Day activities on April 25 this year, we guided all localities to adjust measures in accordance with their specific local conditions to carry out further publicity on COVID-19 vaccination to encourage more people to get vaccinated. In addition, various other platforms, including radio, television, newspapers, open letters from the government and communities, and new media and We-media, were also used to promote vaccination in the communities, rural areas, and nursing homes.

Getting vaccinated and personal protection measures are effective means for COVID-19 prevention and control. Therefore, I also hope that our media friends will support and carry out more publicity activities about the popularization of vaccination. We will further increase the vaccination coverage rate of key groups and senior citizens with our joint efforts. In this way, we will offer more support to the epidemic prevention and control efforts. Thank you.

Liang Wannian:

Let me answer the second question. The epidemic strain of the outbreaks in Beijing and Shanghai is the Omicron variant. Both cities are super-large, each with a population of 20 million or more. The Omicron variant has the characteristics of rapid spread and strong concealment. For these megacities, this has increased a lot of difficulties in fighting COVID-19 outbreaks. And this has put forward higher demands in terms of organization and implementation and other aspects such as related nucleic acid testing capabilities and medical treatment capabilities. Therefore, it is a test of these megacities' governance systems and governance capacity to a certain extent.

Speaking from the perspective of the epidemic situation experienced in Shanghai and that Beijing is also fighting the sporadic COVID-19 epidemic, I think there are a few points that can be enlightening. First, Omicron spreads too fast and is too concealed, so we must improve the previous approaches to fight the original strain of the novel coronavirus and its Alpha, Beta, and Delta variants. The general rule is to move fast. The virus spreads quickly, so the speed of our moves, and the intensity and speed of our work, have to be faster and race against time to fight this virus. This is a significant change.

Second, we still have to build our confidence. Some cities in China, such as Shenzhen in Guangdong province, Changchun in Jilin province, Tianjin, etc., have all experienced the outbreak of the Omicron. The practice has proved that we can effectively control the spread of the epidemic by adopting effective strategies and tactics to achieve dynamic zero-COVID, so we must firmly establish this confidence. We have the ability, the foundation, and the conditions to defeat the epidemic and spread caused by the Omicron. As you can see, significant progress has been made in both Shanghai and Beijing.

Third, we must consider that the most vulnerable groups of this variant are the elderly and those with underlying diseases. The most effective means of protection is vaccination. The population of these two cities is also relatively old, and the proportion of the elderly population is higher than the national average. Therefore, strengthening the vaccination of the elderly and effectively increasing the rate of whole process vaccination and the vaccination rate for the booster shot is an effective means to protect their health, which must be strengthened. At the same time, it should be emphasized that in response to the outbreak of the Omicron, we must go all out to implement the policy of ensuring that all those in need are tested, isolated, hospitalized, or treated. We have formed this experience since the fight against the Wuhan epidemic in 2020. As long as the policy is fulfilled, the transmission chain of the epidemic can be quickly and effectively cut off, the people's health can be effectively protected, and medical treatment can be effectively executed.

Last but not least, the battle against the COVID-19 pandemic is an all-out people's war. It is also a systemic process that needs strong synergies among governments, departments, every individual, and the whole society. The efforts to fight the pandemic in Shanghai and Beijing need to mobilize the entire society under the guidance of a systemic philosophy to ensure that local authorities, relevant departments, employers, and individuals fulfill their responsibilities. I think we will win the anti-pandemic war, as we are waging a people's war against it in a swifter response and a more scientific and efficient manner. Thank you. 

Hong Kong Ta Kung Wen Wei Media Group:

The current pandemic prevention and control measures have caused some inconvenience in production and people's life. Some believe that the "dynamic zero-COVID" approach has slowed China's economic growth. What do you think will be the impact on the economy of this approach? Thank you. 

Liang Wannian:

Thank you for your question. First, we need to clarify that the ultimate purpose of the dynamic zero-COVID approach is to make the utmost efforts to ensure people's health and protect their lives while sustaining social and economic development and ensuring normal production and daily life. The approach can be coordinated with economic development, and normal production and life. They are not contradictory. We have been implementing the general principle of the dynamic zero-COVID policy with a series of measures, but that doesn't necessarily mean it will affect economic growth or normal production and life. The reason lies in that the pandemic containment and economic development can be coordinated. They are both the primary objectives of the dynamic zero-COVID approach. There are also three subgoals that the policy aims to achieve: First, it aims to safeguard people's health and lives. Second, it aims to ensure economic development to protect the economy from the impact of the virus. Third, it aims to ensure people's normal work and life. As such, they are not contradictory. 

We need to understand that it is the pandemic and the virus dragging down the economy. The pandemic impacts the economy of all countries in the world, which have been doing their best to minimize the impacts of the virus and pandemic with various policies and measures adopted in line with their own guiding principles. However, the differences in anti-epidemic philosophies, guiding principles, policies and measures, coupled with factors such as the response speed and implementation effectiveness, lead to different outcomes and efficiency of the pandemic containment efforts. It should be admitted that some of the measures adopted to fight the virus will cause temporary inconvenience in daily life and affect social and economic activities temporarily. But the targeted way is the priority in the general principle of the dynamic zero-COVID approach, which aims to synergize pandemic containment, economic development, and normal production and life in a targeted and balanced manner. In this regard, different areas need to consider their respective pandemic situation and local social and economic situation to make the approach work well and thereby effectively balance the relationship between pandemic containment and economic development, as well as people's normal work and life.

The last thing I want to say is how to understand the balance? The balancing process is a dynamic process guided by China's general concept and policy guidelines against the virus. So, we should understand the balance between COVID-19 prevention and control and economic and social development from a macro, collective and dynamic perspective. It is about dealing with the relationship between short-term and long-term considerations, between part and whole, and between individuals and groups. Specifically, while implementing specific strategies and measures, we may have inconvenienced parts of areas and people in the short term and made the economy of parts of areas suffer for a short time. Still, we have ensured the normal production and life of the broadest areas and people. I think it is cost-effective, also a balance. The Chinese government has been putting the goal of a well-balanced relationship between COVID-19 prevention and control and economic and social development as a priority. China has been striving to explore the approaches of balance and make efforts to do well in the balance, facing different epidemic situations and regions.

Thank you.

Red Star News:

The NHC recently said that China's anti-epidemic work has entered the fourth stage -- the stage of all-round comprehensive epidemic prevention and control in a scientific and targeted manner following the dynamic zero-COVID approach. When did China enter this stage? Why the need to adjust? Thank you.

Li Bin:

Thank you for your question and attention on China's epidemic prevention and control stages. During more than two years of China's anti-epidemic work, we have optimized and adjusted prevention and control measures and diagnosis and treatment schemes depending on the epidemic situation. We have always followed the people-centered development philosophy in fighting against the epidemic. China's epidemic prevention and control work has included four stages: first, the emergency containment stage of the epidemic outbreak. We achieved a decisive result in fighting the virus in Wuhan city and Hubei province in about three months, and successfully contained the spread of the virus in China. Second is the exploration stage of regular epidemic prevention and control. China has mainly used nucleic acid testing as a major way to strengthen prevention, and strived to control an epidemic situation within two or three incubation periods. The third is the stage of targeted prevention and control following the dynamic zero-COVID approach across the whole chain. We have focused on early detection and meticulous and fundamental measures, and grasped the "golden 24 hours" after detecting positive cases to contain the epidemic within the first incubation period. Currently, China's anti-epidemic work has entered the stage of all-round comprehensive epidemic prevention and control in a scientific and targeted manner following the dynamic zero-COVID approach.

The Omicron variant is highly infectious, highly transmissible, difficult to detect, and can cause a larger proportion of asymptomatic infections. We summarize experiences from different regions and continue to improve COVID-19 response measures. As for COVID-19 prevention and control measures, we make clear our main focuses, set priorities for these measures, and put community-level prevention and control in a prominent position. We control the population at risk within the particular region at the earliest time. Infected patients will all be treated, and close contacts will all be isolated. We also isolate people who are secondary close contacts of COVID-19 cases in designated places as possible as we can, striving to cut off the transmission routes in the shortest time. We work to advance antigen tests and nucleic acid tests in order to detect infected cases as early as possible. Public security, industry and information technology, and public health departments have worked in synergy to conduct epidemiological investigations, identify the scope of the population at risk, and take targeted prevention and control measures. As for the organization and management of disposal of COVID-19 cases, we work in a well-coordinated and efficient way and try to run faster than the virus. Based on the principle of centralized and overall planning, we work to ensure that all processes, including nucleic acid testing, epidemiological investigation, isolation, transferring, and community-level prevention and control can be operated in a well-coordinated manner, striving to shorten the possible time from positive screening test to final transfer. We focus on high-risk regions and mobilize our best efforts to secure victory in key regions so that the transmission of the virus can be curbed as quickly as possible. 

In general, no matter how the epidemic situation goes, we will always put people and their lives first and take prudent efforts to ensure the COVID-19 response measures are implemented. Thanks.

ITV News:

Mr. Liang Wannian, you mentioned some cities have already battled some Omicron outbreaks. In those cities, it has taken generally far less than it has taken in Shanghai, where they're entering their second month of lockdown. The numbers are still rising. Do you know why that is? Why has the situation become so bad in Shanghai? You did mention there is a high elderly population there. Can I also ask if China has any plans to roll out mRNA vaccines? Thank you. 

Li Bin:

Your questions cover two aspects. The first one will go to Mr. Liang, and the second one on mRNA vaccines will go to Mr. Lei.

Liang Wannian:

Thank you. Shanghai is now still at a critical stage to control the epidemic. Also, as we see, data from the reported cases show a downturn in the curve. It is gradually decreasing on a high base. All these demonstrate that our series of efforts and strategies to respond to COVID-19 are taking effect and effectively curbing the surge of cases. The situation shows signs of improvement. However, with about 10,000 new COVID-19 cases reported every day in Shanghai, the situation remains grim and complex.

Shanghai and Beijing are megacities with a large population base, high population density, and high population mobility, which pose significant difficulties for prevention and control. For such a large population, nearly 25 million people in Shanghai, we need systematic, considerate, and extensive allocation of resources, mobilization, and coordination to effectively organize a nucleic acid test and implement a specific anti-epidemic measure. It is a systematic project involving the municipal government, districts, and specific sub-districts and residents' committees. It is one of the difficulties. It cannot be done quickly and well like some other cities and areas do.

Second, it requires us to have a strong capacity against the virus. Like the frequently discussed time and space in academic fields, it requires different capacity levels against the virus in our system, nucleic acid testing capacity for example. For a city with 1 million people and one with 25 million, it will take longer in the case of insufficient capacity but may take merely 24 hours when there is sufficient capacity. So, that is another challenge.

Moreover, city operation must be ensured in the anti-epidemic fight. The supply of water, electricity, coal, and gas and public security needed in the running of the economy and people's everyday lives must be ensured. For example, couriers, transportation, medical staff and services, community organizers, and volunteers are necessary, so there has been a certain level of mobility. Given the extensive virus spread in communities in Shanghai, such population mobility is bound to bring greater risks to prevention and control.

When the virus is quickly spreading in such a big city, it requires adequate preparations and resources to ensure the policy of ensuring that all those in need are tested, quarantined, treated, or restricted was implemented. If no adequate preparations and resources like hospital beds, infected cases, confirmed cases, close contacts, and secondary close contacts would be stranded in communities, resulting in virus spread in families and communities. It is also a challenge for Shanghai to ensure the policy of ensuring that all those in need are tested, quarantined, treated, or restricted was implemented effectively. Still, we are pleased to see that Shanghai is heading in the right direction, with remarkable progress in medical treatment and sufficient beds in makeshift hospitals. It took some time to get there. Shanghai went through a difficult period some time ago, which has to do with many aspects, including the characteristics of the city, the rapid spread of the virus, the level of our overall resources, and the mobility of the people.

Finally, Shanghai has a high population density. Since the outbreak in the city, the epidemic has spread widely in the community. Compared with single or regional cluster cases, the prevention and control measures for widespread community transmission have more difficulties. Therefore, it might take longer, and measures such as nucleic acid testing, antigen testing, and screening strategies may be needed more frequently.

Thank you.

Lei Zhenglong:

Regarding mRNA vaccines, China has arranged several research and development tasks. Some with faster timelines are conducting phase III clinical trials abroad, and some are in the process of review and approval. For details, please consult the relevant departments. Thank you.

Beijing Daily:

Under the principle of dynamic zero-COVID, how to make epidemic prevention policies more conducive to the resumption of work and production and minimize the impact on ordinary people? How to ensure efficiency and humanization and better promote the smooth implementation of dynamic zero-COVID? Thank you.

Lei Zhenglong:

Thank you for your questions. Since the outbreak of COVID-19, we have firmly implemented the decisions and deployments of the CPC Central Committee and the State Council, actively guided local governments to strengthen scientific and targeted prevention and control measures, and unswervingly adhered to the overall strategy of preventing imported cases and domestic resurgences and the general policy of dynamic zero-COVID. As we deepen the understanding of COVID-19, our prevention and control policies and measures have been constantly adjusted and improved in accordance with the changing epidemic situation and the actual needs of the prevention and control work to coordinate better the epidemic prevention and control with social and economic development.  

First, we have continued to improve the scientific and precise epidemic prevention and control level. According to the epidemic prevention and control situation, we have kept improving the epidemic prevention and control plan. After the outbreak, we have strived to find close contacts and sub-close contacts as soon as possible, shorten the time for infected persons and close contacts to linger in communities, and reduce the spread of the epidemic. Medium- and high-risk areas have been demarcated in a scientific method, and a multi-level, category-specific, and targeted approach has been adopted in different areas. In community prevention and control, lockdown area, control area, and prevention area have been precisely classified.

Second, we have done our best to minimize the negative effects of the pandemic on the public. We not only fought the virus with strict and effective control measures but also provided considerate services, making every effort to meet people's demands for medical treatment. We gathered information on patients needing special treatment in lockdown and control areas. We precisely synergized communities with designated hospitals, ensuring that residents can leave the community to see a doctor. To guarantee necessary supplies, we coordinated our efforts to improve the all-level delivery system and enhanced the allocation of daily supplies. We pooled strength from communities' social organizations, committees of property owners, real property management, and service enterprises as well as volunteers to collect information on each household's needs, place joint purchase orders and deliver necessities, providing residents with sufficient supplies, considerate services, and warm care.

Third, we promoted the resumption of work and production in an orderly manner. To ensure smooth traffic and logistics, localities and relevant departments adopted closed-loop management, which requires drivers and conductors to regularly conduct health monitoring and take a nucleic acid test. We also improved our pandemic response measures for those on the road. A large number of checkpoints for the nucleic acid test have been installed to ensure drivers can conveniently take tests and go and could be traced at any time. Meanwhile, we coordinated pandemic response with the transportation of key materials and agricultural production. Precise pandemic response measures have been proposed for various agricultural scenarios so as to guarantee a smooth production and a stable supply of agricultural products. Thank you. 

Cover News:

Based on the fact that the Omicron variant is much harder to detect and more contagious than the original strain, some people argue that it is not easy to realize early quarantine, thus making dynamic zero-COVID approach almost equivalent to a citywide closed-off management and mass nucleic acid test. What's your view? How to contain the spread of the virus as early as possible without conducting mass nucleic acid tests or imposing a citywide lockdown? Thank you.

Liang Wannian:

Thanks for your question. First of all, I want to make it clear that even though the Omicron variant is highly contagious, hard to detect, and results in many asymptomatic cases, it doesn't mean that we can't realize early detection early reporting, early quarantine, and early treatment. If the "four earlies" principle is conscientiously observed, we don't have to launch a mass nucleic acid test or put a whole city under lockdown. So, my point is that fighting Omicron doesn't necessarily imply a citywide mass nucleic acid test or citywide closed-off management.

What kind of test strategy shall we adopt? At present, we advocate a joint test strategy featuring conducting nucleic acid tests and antigen self-test based on the development of the pandemic. Generally speaking, the earlier the transmission is detected, the easier it is to figure out its chains. That's to say, we can more precisely find out how the cases are infected, who their contacts are, and people in which areas might be affected, thus doing a better job in terms of the "four earlies." We can then conduct the nucleic acid test and antigen self-test within a targeted area instead of imposing an extensive lockdown. This is very important. 

Can we effectively control the pandemic without city-wide nucleic acid testing and lockdown? I would say it's possible as long as we can ensure "early detection, reporting, quarantine and treatment." While to guarantee the "four earlies," it requires a set of concepts, capacities, and mechanisms. Therefore, in response to the pandemic, I believe that all places across the country should make good preparations. The monitoring capacity, discovery and reporting capacity, quick reaction capacity, the participation of multiple departments and individuals, the alerts, and degree of emphasis on diseases are highly relevant to achieving the "four earlies."

On the other hand, if we fail to achieve the "four earlies" and discover the cases late, in particular, for some infected patients, if we can't figure out where they are from, how many people have been exposed to, and the spread range. The basic reproduction number of Omicron variant will hit 9.5 with its fast transmission speed. In addition, the median incubation period is three days, compared with the original strain of 5.4 days and the Delta variant of four days. Its time interval of intergenerational transmission is 2.83 days. Under the circumstance of without knowing its source of infection, the spread range, and close contacts of infected patients, given the variant's fast transmission speed, we must expand the range of control, enhance nucleic acid testing, strengthen relevant prevention and control measures, to keep the pandemic under control. I believe it is also the need for pandemic prevention and control.

Generally speaking, China has already been equipped with the technologies and approaches to achieve the "four earlies." For example, our nucleic acid testing technology and the extensively used COVID-19 antigen self-testing kits. The effective combination of nucleic acid testing and antigen self-testing could help to discover the potentially infected people as soon as possible across the places where there are COVID-19 outbreaks and resurgences. Moreover, we have made a series of regulations and requirements in the law. In addition, we have established a set of the comprehensive monitoring system, which has further enhanced our monitoring capacity. More importantly, we have accumulated abundant experience battling the coronavirus over the past two years. In terms of the emergency system, treatment system, people's participation in prevention and control, collaboration among departments, and the joint prevention and control mechanism, we have formed basic experience to curb the fast-spreading virus with fast response-ability, especially regarding the Omicron variant. As long as we can use those resources, we will achieve the "four earlies" and win the battle against COVID-19 at a minimum cost. Thank you.

China Daily: 

The difficulties of getting medical services in some lockdown areas have become a problem recently. I would like to know how to ensure the smooth operation of both pandemic control and medical services at the same time? Thank you.

Li Bin:

Thank you for your question. Coordinating relations between the pandemic prevention and control and regular medical services and ensuring people's needs for services are crucial to protect people's health and well-being. During the pandemic prevention and control process, it has always been our most concerning issue to maintain medical treatment in good order to deliver consistent medical services for the public. 

Currently, the COVID-19 epidemic features a combination of sporadic cases in a few places and cluster outbreaks in some parts across the country. The prevention and control situation remains grim. Some areas were put under closed-off management, affecting people's medical treatment. Given this problem, the NHC has put forward precise requirements, made comprehensive arrangements, and provided guidelines for specific local situations. Local authorities have also taken adequate measures to do everything possible to ensure the public's medical needs. To solve this problem, we have mainly focused on the four points:

First, we must ensure the timely treatment of acute and critical patients. According to the deployment of the NHC, all localities are required to designate hospitals for those whose health codes turn "yellow" and open "cloud clinics." For the critically ill, buffer zones for emergency treatment, first-aid centers, operating rooms, and wards should be put into use in a timely manner when their nucleic acid test results are yet unknown. Medics should strictly implement the first consultation responsibility system and ensure the treatment of acute and critical patients, offer timely and effective treatment while protecting themselves, and should not refuse patients at any excuse to delay the treatment.

Second, we must meet the medical needs of special groups. Local epidemic prevention and control departments should conduct survey and develop a clear picture of the situation of patients with demand for hemodialysis, tumor radiotherapy or chemotherapy, as well as pregnant women and newborns in areas under closed-off management, so as to better provide continuous medical services. Community-level health care institutions should provide medical services for patients with chronic diseases by issuing long-term prescriptions and other means.

Third, we must guarantee access to essential medical services in areas with the resurgence of COVID-19. During the epidemic prevention and control period, we have raised the level of coordination, strengthened the inter-department coordination, and set up emergency helplines such as 120 and convenient service channels to ensure that the public can "connect to the emergency center and receive timely treatment." The closed-off management areas and restrictive control areas should constantly improve the operation mechanism of medical service management under the emergency state. Expert teams providing consultation and evaluation to needy people should be arranged. For those who need to go out for medical treatment, point-to-point transportation, and closed-loop management should be arranged to ensure residents in medical demand can leave the community and get into the hospital.

Fourth, we have coordinated epidemic prevention and control and medical services within medical institutions. The pandemic monitoring and early warning efforts in medical institutions have been further strengthened, and the procedures for handling public health emergencies have been improved. The emergency plan is immediately activated once confirmed cases are identified. While responding to emergencies timely and effectively, it is necessary to report to the local disease prevention and control departments to coordinate pandemic prevention and control in hospitals and society. The medical institutions where cases are identified cannot be shut down due to dealing with the pandemic. After taking closed-off management and restrictive control measures, the emergency response mechanism should be initiated swiftly to make sure that the key departments, including emergency, dialysis, operation, intensive care unit, and delivery, can continue to function. We must ensure critical patients can get timely treatment to minimize the impact of epidemic response on normal medical services in medical institutions. Thank you.

The Straits Times: 

I have two questions. First, China emphasizes that the costs and benefits of the dynamic zero-COVID approach should be calculated at the macro level. What is the tipping point where the costs exceed the benefits? What exactly are the costs? Second, China has taken the lead in recovering from the pandemic and has been looking for new ways to cope with the constantly mutating novel coronavirus. What has China done in recent years to intensify the capacity building of its medical system? Thank you. 

Liang Wannian:  

Thank you for your question. When calculating the costs and benefits of fighting against COVID-19, we should first make clear the local-overall relationship and short-term and long-term relationship and take a long, comprehensive, holistic and systematic perspective. Second, evaluating the costs and benefits of COVID-19 response involves more than economic or monetary factors. Life is priceless and cannot be measured with money. Therefore, to analyze the costs and benefits, we need to take a systematic, big-picture, holistic, and dynamic view to consider both the economy and people's livelihoods.

Theoretically, the strategies and measures adopted to fight the epidemic will definitely generate direct costs — such as significant labor, material and financial resources invested in vaccination, temporary treatment centers construction, and nucleic acid testing. At the same time, there will also be some indirect costs. For example, the pandemic response will restrict the mobility of some people in some local areas, which may impact the economy. In addition, there will be intangible costs, such as anxiety and other psychological problems incurred in people quarantined at home in the closed-off management areas and restrictive control areas.

In terms of benefits, we should also follow a dynamic and multi-layered approach and consider both direct and indirect benefits and even invisible benefits. China's policy of preventing imported cases and domestic resurgences and the dynamic zero-COVID approach have effectively prevented the pandemic's large-scale spread and outbreaks, thus protecting the health and safety of the people to the maximum. China has effectively avoided a loss in the per capita life expectancy and managed to ensure order in the life and work of the people and the economy of as many regions as possible. These are all direct benefits. Just as Mr. Li mentioned a moment ago, in 2020, China was the world's only major economy to achieve growth. In 2021, China's GDP grew 8.1% year-on-year, with a two-year average of 5.1%, ranking among the highest compared with the world's other major economies. In the first quarter of this year, our GDP expanded by 4.8% year-on-year. These statistics show that the dynamic zero-COVID approach suits China's conditions and effectively coordinates pandemic control with social and economic development.

Given the uncertainties brought about by the pandemic, the dynamic zero-COVID approach and the concrete anti-pandemic measures served as insurance for the 1.4 billion Chinese people against pandemic fluctuations and virus variants. The cost of the insurance is to sacrifice economic gains of a small number of people to ensure the welfare of the whole society at its most. The dynamic zero-COVID approach has also promoted the development of China's digital economy. For example, the telemedicine and big data technologies used in pandemic control have boosted the digital economy, firmly ensured the people's wellbeing, and protected the vulnerable. Meanwhile, through carrying out joint prevention and control and improving the governance capacities of communities, we have promoted the effective connection and coordination among departments of public services, between government and non-government entities, and between government administrations and the community governance services in their direct charge. I think these are all indirect or invisible benefits of the dynamic zero-COVID approach.

Medical treatment has always been a priority in China's pandemic control efforts. Attaching great importance to the work, the Chinese government has adopted a series of measures to ensure that all suspected and confirmed cases could be hospitalized and treated. Efforts mainly focused on the following aspects, especially after the appearance of Omicron.

First, we have improved the establishment and management of designated hospitals. We guided local authorities to set hospitals with strongly integrated capacities, high-quality medical treatment, and outstanding epidemic prevention and control techniques as designated hospitals to hospitalize patients. At the same time, clear requirements have been put forward for the number of beds in designated hospitals in cities with different populations. For example, in principle, in each of the cities above the prefectural level with 1 to 5 million permanent urban residents, the total number of beds in designated hospitals should not be less than 500. In megacities with 5 to 10 million permanent urban residents, the total number should not be less than 1,000. And in megacities with more than 10 million permanent urban residents, the total number should not be less than 1,500. Among them, the number of beds for severe cases shall not be less than 10% of the total number of designated beds. Besides, local authorities must set up a certain number of back-up designated hospitals to ensure that they can be vacated and put into use within 24 hours when needed.

Second, we have improved the establishment and management of makeshift hospitals. A hierarchical approach to diagnosis and treatment has been adopted. And a number of makeshift hospitals have been built and remodeled to ensure that they can be put into use within two days when necessary so that all those in need are hospitalized or treated. As of April 25, nearly 400 makeshift hospitals have been built or are under construction in China, with a total of more than 560,000 beds. In addition, there are clear requirements for the ratio of doctors to nurses and doctors to beds in makeshift hospitals.

Third, we have taken practical measures to promote the utilization of medical resources. We have guided local authorities to transfer COVID-19 patients whose symptoms meet specific conditions to makeshift and designated hospitals, maximizing the use of hospital beds. At the same time, local authorities are also required to strengthen epidemic prevention and control while ensuring daily medical service.

In addition, during this period of time, we have been raising the capacity for ICU treatment by providing necessary treatment facilities and equipment, strengthening the training of medical staff, revising and improving diagnosis and treatment standards in a timely manner, widely adopting traditional Chinese medicine, strengthening emergency treatment plans, training and exercise, and strengthening the reserve of emergency medical treatment supplies.

Thank you.

Shou Xiaoli:

The last question, please.

Zhinews of Shenzhen Satellite TV:

We have noticed that according to the World Health Organization (WHO) recently, the COVID-19 pandemic remains a Public Health Emergency of International Concern (PHEIC). It suggests countries take response measures at any time against a possible new round of COVID-19 breakout in autumn. What targeted epidemic prevention measures will China take accordingly? Thank you.

Lei Zhenglong:

Thank you for your question. We have noticed that in the WHO statement issued on April 13 on the eleventh meeting of the International Health Regulations Emergency Committee, it has determined that the COVID-19 pandemic continues to constitute a PHEIC. China has been paying close attention to the global pandemic situation and adjustment and changes in response strategies and measures of the WHO and various countries to further improve its prevention and control policies and measures. Autumn and winter are the seasons with a high incidence of respiratory infectious diseases. Since 2020, based on the national situation in COVID-19 prevention and control and the mutation of the virus, we have guided local authorities to improve the monitoring and early warning mechanism, strengthen epidemic risk assessment, and further implement the measures of early detection, reporting, quarantine and treatment. We have strengthened epidemic prevention and control at key links and carried out prevention and control of the coronavirus epidemic and other respiratory infectious diseases in a coordinated way, to effectively respond to the epidemic in autumn and winter. 

This year, we will closely keep track of the COVID-19 pandemic situation and the mutation of the virus across the world. Considering that and based on the changes in the epidemic prevention and control situation in China, we will further increase the guidance for local authorities to prepare for the epidemic response in autumn and winter. Thank you.

Shou Xiaoli:

Thank you to all speakers and friends from the media. Today's briefing is now concluded. Goodbye.

Translated and edited by Zhou Jing, Huang Shan, Gong Yingchun, Zhang Junmian, Cui Can, Wang Wei, Yan Xiaoqing, Li Xiao, Li Huiru, Qin Qi, Wang Yiming, Zhang Tingting, Xu Xiaoxuan, Yuan Fang, Wang Yanfang, Xu Kailin, Liu Sitong, Chen Xia, Zhang Rui, He Shan, Liu Jianing, Wang Qian, Zhu Bochen, Dong Qingpei, Yang Xi, Zhang Jiaqi, Zhang Lulu, 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:

He Junke, convener of the ministerial-level joint meeting for implementation of the Medium- and Long-Term Youth Development Plan and first secretary of the Secretariat of the Central Committee of the Communist Youth League of China (CYLC)

Fu Zhenbang, director of the executive office of the ministerial-level joint meeting for implementation of the Medium- and Long-Term Youth Development Plan and secretary of the Secretariat of the Central Committee of the CYLC

Chairperson:

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

Date:

April 21, 2022

Xing Huina:

Friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, the SCIO published a white paper titled "Youth of China in the New Era," and organized this press conference to introduce and interpret its main content.

The white paper fully implements Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, reviews Chinese youth's continuous struggle for national rejuvenation over the past 100 years under the leadership of the Communist Party of China (CPC), and presents the efforts being made by the CPC Central Committee with Comrade Xi Jinping at its core for the development of young people since the 18th CPC National Congress. It introduces China's policies and measures to promote youth development and showcases the achievements in this regard and young people's spirit in the new era. The document also calls for young people around the world to join hands and build a community with a shared future for mankind, and contribute their wisdom and strength to create a better world.

At around 18,000 Chinese characters, the white paper consists of foreword, main body and conclusion. The main body is divided into four parts: "The New Era: Great Times with Ample Opportunities," "All-Round Development in the New Era," "Shouldering Heavy Tasks and Responsibilities" and "Having a Global Vision and a Strong Sense of Responsibility."

The white paper is published in eight languages — Chinese, English, French, Russian, German, Spanish, Arabic and Japanese — by the People's Publishing House and the Foreign Languages Press. It is available at Xinhua Bookstore outlets across the country.

To help you better understand the white paper, we have invited Mr. He Junke, convener of the ministerial-level joint meeting for implementation of the Medium- and Long-Term Youth Development Plan and first secretary of the Secretariat of the Central Committee of the Communist Youth League of China (CYLC), and Mr. Fu Zhenbang, director of the executive office of the ministerial-level joint meeting for implementation of the Medium- and Long-Term Youth Development Plan and secretary of the Secretariat of the Central Committee of the CYLC. They will brief you on relevant information and then take your questions.

Now, I'll give the floor to Mr. He Junke

He Junke:

Ladies and gentlemen, friends from the media, good morning.

It's my pleasure to be here and introduce to you the development of China's youth in the new era. First, on behalf of the ministerial-level joint meeting for implementation of the Medium- and Long-Term Youth Development Plan and the CYLC Central Committee, I would like to express my heartfelt gratitude to friends from all sectors for your long-term interest in and support for the development of China's youth.

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has been attaching great importance to young people, caring deeply about them, fully trusting them, and making tremendous efforts for their development. This has enabled China to make all-round progress and secure historic achievements in its youth development. In general, the overall development of Chinese youth has outperformed the country's economic and social growth, with multiple core indicators reaching the average level of middle- and high-income countries. In order to showcase the vigorous image of young Chinese people in the new era and comprehensively present China's policy position on youth, the ministerial-level joint meeting compiled and completed this white paper under the support of the meeting's member institutions such as the Publicity Department of the CPC Central Committee, the Ministry of Education, and the Ministry of Human Resources and Social Security.

The white paper is the first of its kind since the founding of the People's Republic of China in 1949 focusing on youth development. Based on a statistical and monitoring system for youth development initiated by the National Bureau of Statistics, we have given full play to experts and think tanks involved in the Medium- and Long-Term Youth Development Plan. We also pooled research resources on youth development from statistical reports, yearbooks and blue papers as well as agencies affiliated with the CYLC. As a result, the white paper objectively presents China's remarkable achievements in youth development since the 18th CPC National Congress and provides a group portrait of China's youth in the new era.

In terms of the environment for their growth, China's youth in the new era, living in the best times in Chinese history, enjoys better conditions for development, more opportunities to fulfill potential, more all-around protection and support, and a broader space to grow. They are embracing wonderful opportunities to secure a good career. As for their development and achievements, they are firmer in ideals and convictions with better physical and mental health, stronger intellectual foundations, and active participation in social activities. They sharpen skills through hard work and temper their abilities in adversity, displaying their ability to shoulder the responsibility of national rejuvenation. As for their sense of responsibility and accomplishments, they work hard and are dedicated in their work posts, lead the charge in difficult situations and emergencies, temper themselves through community service, take the lead in innovation and entrepreneurship, or spearhead cultural and ethical progress, showing their vibrancy with no fear of difficulties and hardships. Regarding their concern for the rest of humanity, they have more ways for external cooperation, and their "circle of friends" with whom they can communicate and cooperate continues to grow. They build consensus among youth through heart-to-heart communication and dialogue, work hand in hand on the journey towards a brighter future, embrace the world with greater openness and confidence, and show their broad vision to build a global community of shared future. The Chinese youth's spirit of vigor, confidence, and progress fully proves that it is completely correct for the Chinese government to uphold the Marxist view on youth, the principle that the Party exercises leadership over youth, and the concept of giving priority to youth development. The leadership of the Communist Party of China and the socialist system are the fundamental reasons for China's historic achievements in youth development and also the fundamental basis for its further development.

As the principal challenge facing Chinese society in the new era has changed profoundly, and the world is witnessing profound changes unseen in a century, we are also aware that many new situations and challenges are emerging in the country's youth development. People from all walks of life and groups are faced with many pressing difficulties and problems that need to be resolved, demanding care, understanding and collaborative support from all sectors of society. We will bear in mind the current realities of China's development and the fundamental dimension of the country's national context as well as the overall and long-term interests of the Chinese nation, fully recognize the crucial strategic role of youth, and continue to increase policy support in all fields so that young people can unleash more talents and contribute more to the great cause of national rejuvenation.

In just over 10 days, we will celebrate the 100th anniversary of the founding of the Communist Youth League. As an advanced youth organization under the leadership of the Communist Party of China, the league has always taken serving youth development as one of its important duties. We will fully implement Xi Jinping's important thinking on youth work, respond to the voices and demands of the youth in a timely manner, step up efforts to strengthen policy and social advocacy, give full play to our role as a bridge and bond connecting young people and serving them, coordinate the implementation of the Middle- and Long-term Youth Development Plan to realize greater achievements, and take concrete actions to set the stage for the Party's 20th National Congress.

That's all for my introduction. Thank you!

Xing Huina:

Thank you for your introduction, Mr. He. Now the floor is open for questions. Please identify the media outlet you represent before asking questions. 

China Media Group:

We note that the Middle- and Long-term Youth Development Plan (2016-2025), the first plan directed toward young people in the history of China, is repeatedly mentioned in the white paper. Mr. He, over the past five years since it was introduced, what have we done to serve youth development and promote the implementation of this plan? Thank you.

He Junke:

Thank you. I will take the question. The Middle- and Long-term Youth Development Plan (2016-2025) was enacted under General Secretary Xi Jinping's personal direction, commitment, and concern. The plan is new for us. In China, policies related to youth development were scattered among various ministries and departments in the past. It is the first time for us to integrate them together and consider their coordination and cohesion. It has been five years since the plan was enacted. We have made great progress in the past five years under the concern of various sectors. The progress mainly includes the following aspects:

First, institutional systems to support youth development have been continuously improved. These systems include seventeen or eighteen laws directly related to youth development guided by the spirit of the Constitution. Some of them have been revised over the years, which have fully considered the current situation of the development of times and the youth and built a basic legal support system. In addition, the planning system framework involving youth development has been fully established. The State Council issued the Middle- and Long-term Youth Development Plan (2016-2025), and all provinces issued their provincial youth development plans. Some prefecture-level cities, counties, and districts also revealed their youth development plans. In terms of institutional and policy systems, some requirements of youth development have been included in the 13th and 14th Five-Year Plans for National Economic and Social Development, in which special chapters and sections have contributed to the requirements, with the needs of youth development addressed. In addition, various ministries and commissions have formulated many specific policies in their work field and within the scope of their specialties. According to our rough statistics, various central government departments have issued more than 80 specific policies to support youth development in recent five years. Thus, a complete institutional system has been established within the scope of institutional systems. 

Second, a coordination mechanism for promoting youth development has been established. I am the convener of the inter-departmental joint meeting mechanism for implementing the middle- and long-term youth development plan at the national level. There are 51 ministries and commissions participating in the mechanism, one of our country's most extensive coordination mechanisms. Seventeen departments are regularly involved in the work of the mechanism, and the other 30 odd departments often take concerted actions. Such coordination mechanisms have also been established at the provincial, city, and county levels. In addition, Party and government leaders in the region serve as conveners, and relevant departments participate.

Third, substantive progress has been made in addressing pressing difficulties and problems that are of the greatest concern to young people. This is the most fundamental foothold. In recent years, all localities have revealed many specific policies in light of local conditions to address such issues in the fields of education, employment, entrepreneurship, marriage and fertility, support for the elderly, and housing. Take housing as an example. Young people face many difficulties in housing in big cities. Many provinces have made some explorations in this regard. For example, Guangdong Province implemented a youth settlement program in 2020 and has made constant efforts, which have helped more than 7,000 college graduates settle down in public rental housing units. Not long ago, Beijing turned more than 600 departments into public rental housing units available for fresh graduates for the first time. These are important explorations and have also satisfied real needs. 

The Central Committee of the CYLC has also played the role of a bridge that links the Party with the youth very well in these respects. More than a decade ago, we began to establish a face-to-face communication mechanism between the Communist Youth League members and the deputies to the People's Congress, and members of the Chinese People's Political Consultative Conference to propose some prominent problems in youth development in an orderly manner, and via these two channels let young people' voice be heard and carry out policy advocacy.

Fourth, in recent years, we have focused on exploring more effective ways to promote the implementation of the plans and made great efforts to integrate fragmented policies to promote youth development. For example, two years ago, we launched pilot programs in more than 400 districts and counties across China and gained a lot of inspiration. In the past more than one year, more than 90 cities across the country have explored ways of building youth-development-friendly cities conducive to young people's growth and progress. We will continue our efforts in this regard. 

Generally, thanks to our efforts over the past five years, a preliminary policy system and working mechanism for youth development with Chinese characteristics has taken shape, which we set out five years ago. But, of course, this is a long-term task. So, we will continue to take advice from all sectors and improve our work. So that's my answer, thank you. 

Youth Daily:

The white paper points out that Chinese youth live during great times with ample opportunities in the new era. They are of the highest caliber and have the opportunity to achieve all-round development. Can you introduce important achievements regarding youth development since the Party's 18th National Congress in 2012? Thank you.

He Junke:

The white paper titled "Youth of China in the New Era" mainly depicts the conditions of the contemporary youth and achievements in youth development since the Party's 18th National Congress in 2012, when socialism with Chinese characteristics entered a new era. With the cordial care of General Secretary Xi Jinping and the support of the Party and the government, China's youth development scored historical achievements since the Party's 18th National Congress in 2012, mainly in the following aspects.

First, material conditions underpinning youth development have improved markedly. China's GDP exceeded 110 trillion yuan in 2021. With rapid development as a foundation, China can provide more material support for youth development. Each year, the country's expenditures in R&D and education total more than 2 trillion yuan and 4 trillion yuan, respectively. In addition, China spends more than 200 billion yuan annually on financial aid for students of all educational stages from poor families. These conditions are the most important material foundation for youth development, which is a huge achievement. 

Second, contemporary youths enjoy colorful intellectual and cultural life. Traditional public cultural facilities such as museums and cultural centers have rapidly developed. According to a document I saw, a museum is built every two days on average, and this speed and intensity of investment are great. Cultural industries such as movies, television and artistic performance, and emerging cultural sectors such as the digital creative industry, online audio and visual, digital publishing, and online performance and broadcasting have developed fast. Young people can watch whatever they want to watch. Furthermore, the transportation and information industries are advanced, especially transportation. As the saying goes, "read thousands of books; travel thousands of miles." The youth now have the opportunities to travel everywhere conveniently and go wherever they want. The internet has been an integrated part of the youth's lives. Compared with historical records, the internet accessibility of the youth aged between 20 to 29 is almost 100%, while the number was 68% a decade ago, according to the statistics I saw. Ten years ago, the gap in internet accessibility between cities and rural areas were still obvious, but now the gap has almost been eliminated, with nearly 100% internet accessibility. These provide favorable conditions to enrich young people's intellectual and cultural life. 

Third, youth health conditions have been improved, especially the changes in their bodies, as we have basically solved the problem of malnutrition in the youth. In terms of body shapes, the youth are taller and stronger. For young people aged between 20 and 24, men are 1.6 centimeters higher and four to five kilograms heavier on average than those of 10 years ago. Young women are 1.5 centimeters higher and two to three kilograms heavier on average. Generally, young people have grown taller and stronger within standard heights and weights. Besides, we have noted problems such as a high incidence of near sight in youth, and the authorities have been taking responsive measures. We have also noticed that some young people face pressures from work, study and life, and their psychological health has caught great public attention. But generally, according to our surveys, most young people are psychologically healthy. Some of them have grown more resilient after experiencing setbacks. All these show that the youth are better physically and mentally fit. 

Fourth, young people have received a higher and better education. The new additions to the workforce of 2020, which were mainly young people, had an average education of 13.8 years, equivalent to the first or second year of college. The gross enrollment rate in higher education was 57.8% in 2021, more than double the 26.9% rate in 2011. That means higher education has started to become universal in China. Compared with previous records, young people have received the highest and best education in history.

Fifth, employment opportunities for youth have become more sufficient and diversified. Notably, a great number of rural youth have to the opportunity to give full play to their talents and competencies at a higher industrial level through horizontal and vertical mobility. The number of migrant workers reaches nearly 170 million, most of who are young people. They will have opportunities to leap forward to a higher industrial level. It has been uneasy to solve this kind of employment problem on such a large scale. We have also noticed that as China's economy keeps developing – especially in the tertiary industry – the employment structures and career options have greatly upgraded and expanded for youth. The job category has become more diversified compared with the past. "Slash youth" we have spoken about are defined as young people with multiple titles, jobs, and ways of working and living. All these have led to the greater range of opportunities and choices available to young people.

Regarding the employment of college graduates, our country has always attached great significance to this issue over recent years. This year, the number of graduates of China could surpass 10 million, which is good news for our country as we continue to have many well-educated students joining the workforce every year. It's most welcome news. Of course, there are many difficulties when they seek jobs. However, that's an issue for another field. Thanks to the concerted efforts from various parties, the first-time employment rate of China's graduates has stayed above 77%in past years and then reached over 90 percent by year end, underpinning a fairly good employment in China.

Therefore, generally speaking, since the 18th CPC National Congress in 2012, youth development in China has achieved great progress. All of these achievements are ultimately attributed 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 and demonstrate the advantages of the system of socialism with Chinese characteristics.

Phoenix TV:

The white paper has published the percentage of young permanent urban residents, which for the first time is much higher than that of the overall permanent urban residents. The government has also issued the Opinions on Launching the Pilot Program of Youth Development-Oriented Cities. I would like to know what are the major concerns in building such cities? What kinds of measures will be taken in the future? Thank you.

He Junke:

Thank you. Mr. Fu will answer your questions.

Fu Zhenbang:

The youth are attracted to cities, and the cities thrive thanks to the youth. In 2020, young permanent urban residents accounted for 71.1 percent of the total young population in the country. This percentage will keep growing in the future. In the course of China's rapid urbanization, youth are beneficiaries and contributors, and the core driving force. The building of youth development-oriented cities is an important approach to earnestly promoting the people-centered urbanization strategy, as well as a key leverage to vigorously accelerate the implementation of the Middle- and Long-term Youth Development Plan (2016-2025). It is helpful for enhancing the mutual reinforcement between high-quality development of youth and that of cities. We have the following concerns in carrying out this project:

First, it is a requirement for cities to ground efforts in the new development stage, implement the new development philosophy, and build new development patterns. The overall development of youth is an important component of high-quality economic and social development of cities, as well as an important driving force for building cities' new development patterns. As the population size and structure of youth have both undergone historical changes in China, youth as the key factor in promoting the development of cities have become more valuable. Advocating and practicing the concept of giving top priority to youth development will promote their roles in urban development and further stimulate the vitality of cities.

Second, this is an inevitable choice to adapt to the strategic trend of new urbanization and promote youth development. China's urban development has shifted from high-speed development to high-quality development. Over the past decades, great achievements have been made in China's urban development, but problems have also accumulated. Cities are the place where the youth are most concentrated and also where the pressure and contradictions of youth development congregate. Some cities face prominent problems where youth find it hard to secure employment, housing, and living. It is fair to say that without the high-quality development of young people, there would be no high-quality development of cities.

Third, this is a summary and improvement of some cities' pioneering exploration. During the implementation of the Middle- and Long-term Youth Development Plan (2016-2025) in recent years, more than 90 cities, including Shenzhen, Chengdu, Jinan, Ningbo, Suzhou, and Luoyang, have proposed to build themselves into youth-development-friendly cities and promoted relevant work. Shandong, Guizhou, Zhejiang, and other provinces have proposed to build themselves into youth-development-friendly provinces. These local explorations and practices have laid a foundation for us to deploy this work at the national level.  

Fourth, this draws on international urban development experience. In recent years, some Western countries have promoted urban progress from the perspective of youth development and paid more attention to promoting peace and contentment in work and life for youth by making efforts in such areas as laws and regulations, development strategies, and public policies. Some countries have designed, promoted, and boosted the youth development indicator system from the perspective of urban attractiveness and public facilities supply. All these practices are useful for us to learn from to do relevant work well.

On April 1, 17 ministries and commissions, including the Publicity Department of the CPC Central Committee, the National Development and Reform Commission, and the Central Committee of the CYLC, jointly issued the "Opinions on the Pilot Construction of Youth-Development-Friendly Cities." The opinions clearly put forward the urban development philosophy of making cities more friendly to youth and enabling youth to make more achievements in cities. It champions giving priority to youth development and correctly understanding and guiding the dialectical relationship between youth development and urban development. The opinions have also made arrangements for the guiding ideology, basic principles, main contents, and work requirements of building youth-development-friendly cities.  

To make cities promote high-quality youth development, the opinions proposed that efforts should be redoubled to optimize the seven aspects: a planning environment prioritizing youth development; a fair and quality education environment; an employment environment inspiring youth to harness their talents; a residential environment ensuring youth's basic housing needs; a living environment alleviating the difficulties faced by youth in relationship, marriage, childbirth, and upbringing; a healthy environment promoting the youth's physical and mental development; and a safe environment effectively safeguarding the youth's rights and interests. In a nutshell, these efforts aim at ensuring that young people's rights to education, life, subsistence, labor, habitation, and other rights and interests are fully secured and that cities can provide better space, platforms, environment, and conditions for young people to grow, excel, and succeed.  

To make the youth contribute to the high-quality development of cities, the opinions proposed to mobilize the youth in leading cities' civility and morals, participating in innovation and entrepreneurship, making contributions to their positions, partaking in social governance in an orderly manner, and helping improve the citizens' quality of life. In other words, these proposals were designed to let the youth be the main part and masters of urban development so that they can contribute to the high-quality material, political, cultural, social, and eco-environmental progress in cities.

As we can see, the opinions have attracted wide attention and triggered heated discussion in society after its release. Many cities are actively applying for relevant pilot projects. These cities are wise and far-sighted since winning the hearts of youth means securing success both in the present and in the future. In pursuing this work, we do not apply a one-size-fits-all approach. Instead, we fully respect the realities at the community level and take the approach of conducting pilot programs before launching nationwide measures. We also welcome cities that have not taken part in the pilot projects to voluntarily engage in. We hope that after two years of implementing pilot programs, dozens of cities can be identified for pioneering exploration and give rise to a set of practices that can be replicated to facilitate young people's work, study, settling down, living, and child-raising. In this way, we hope to help solve the pressing difficulties and problems that are of the greatest concern to young people, give better play to their abilities in innovation and creativity, and promote high-quality urban development.  

We recognize that the work needs long-term efforts, so care and support and opinions and suggestions from all sectors of society, including friends from the media, are welcomed and appreciated. We also hope that Party committees and governments at all levels will attach significance to building youth-development-friendly cities by adding more efforts to their organizing work and guidance to make our cities more suitable for the youth to live and work. Furthermore, we believe that the phased-in implementation of the Opinion and the practical exploration of pilot cities, starting with individual practices that are expected to be applied in a larger scope, will surely promote the effective and in-depth implementation of the medium and long-term plan for youth development. Backed by such efforts, we will be able to continue to increase the sense of fulfillment, happiness, and security of the youth in the development of cities, reflect the Party's institutional strength of its youth work in the effective policies and deliver the care and support of the Party to the youth. Meanwhile, we will pursue a new way for high-quality city development in the new development stage. That's my answer. Thank you.

Southern Metropolis Daily:

Generation Z are internet-savvy, willing to express themselves and take the lead on various internet platforms. So what should Chinese young people do in the face of choosing between "lying flat" (a term to describe the youngsters who give up ambitions and do the bare minimum to get by) and "involution" (one buzzword that indicates irrational or involuntary competition)? What does the CYLC suggest? Thank you.

He Junke:

I'll take this question. In recent years, we often see a variety of buzzwords from the media, such as "lying flat" and "Buddha-like." We have attached much attention to them, as the focus of the CYLC's job is to serve the young people. We have carried out many surveys and research, and now I would like to share what we have achieved with you.

First, we observed that only a very few young people chose to "lie flat," instead, a majority of young people are working hard. In recent years, we have carried out a number of surveys and research on the spiritual pursuit of modern young people. We noticed they believe that success depends mainly on personal efforts, which remains the mainstream belief among modern youth. Most of them are optimistic about their future. Based on these surveys and research, we believe that terms such as "lying flat" and "Buddha-like" are often used for relieving stress and regulating emotions.

Second, our country has emphasized addressing underlying problems behind the "lying flat" and "Buddha-like" mindset. Although most young people will not choose to "lie flat" or live with a "Buddha-like" mindset, they are facing great and realistic pressures from work, study, and life, in China's unique population structure and heated population competition environment. Faced with major life choices, young people often become confused, lose their sense of direction or else feel powerless. Similar cases also existed in the old days. Therefore, in recent years, our country has intensified its policy efforts to address difficulties in youth education, employment, marriage, and love, as well as child nurturing, in a bid to help young people to solve urgent and difficult issues.

Third, we wish the whole of society could care more about mental health among youth. A small number of young people are locked in cocoons after dwelling on negative emotions for a long time. Due to various reasons, they lack a fighting spirit and have little sense of responsibility for their families and society. Some are unrealistic and dream about easy success. We need to build a sound social environment to influence them in a positive way. Happiness is achieved through hard work, while hard work itself is a form of happiness. This motto from General Secretary Xi Jinping delivered to Chinese youth is something we should all do our best to understand. 

CRNTT:

Youth volunteers made significant contributions to the successful hosting of a splendid, exceptional, and extraordinary Beijing 2022 Olympic and Paralympic Winter Games and the phrase of "Youth of China in the New Era" appears many times in this white paper. What are the distinctive characteristics of China's youth in the new era? Thank you.

He Junke:

I will take this question. About 20,000 volunteers served the Beijing 2022, showcasing quite a fine image of the Chinese youth. Volunteers serving in competition venues remained there and worked really hard for two to three months with a strong sense of devotion and sacrifice. Their outstanding performance has won applause from the International Olympic Committee and the entire society. These volunteers epitomize the youth of China. People tend to be judgmental towards younger generations. We used to doubt whether the youth born in the 1980s, the 1990s, or the 2000s could shoulder the heavy tasks of the times. Lots of observations and practices have echoed what General Secretary Xi Jinping said about the vigorous youth: they are the most vibrant and the most creative group of society.

The youth of China today impress me in the following aspects: First, they are firmer in ideals. We are often touched by their love for the leader of the Party, their confidence, belief, and trust in the Party and the system of socialism with Chinese characteristics, as well as their full assurance in the future of the country's development. Both domestic and foreign surveys show that 80-90% of Chinese people, including the youth, have confidence and trust in their country and government, a ratio that remains the highest among all countries. The youth don't just say it but firmly put it into practice. Among the excellent examples of the youth we award, some are college graduates turned village officials, some are innovators and pioneers in the field of science and technology, and some are hard-working young people dedicated to ordinary jobs, all demonstrating the lofty value of pursuit.

Second, they have stronger intellectual foundations. In 2021, the gross enrollment rate in higher education reached 57.8%, which means that a majority of youth have the opportunity to receive higher education. We also notice that a large number of young people find ways to add to their knowledge base after work: Some seek continuing on-campus education for adults, while others pursue on-the-job postgraduate education, trying to keep up with the pace of knowledge renewal to enrich their thoughts. They are much more creative and are bursting with innovative ideas. Many young people have shouldered important responsibilities in implementing the country's major programs. In some emerging areas defined by innovation, such as the information technology service, cultural and sports entertainment, and sci-tech application services, more than half of the workforce is young people, exemplifying the innovative spirit and intellectual foundation of the youth.

Third, they are confident and optimistic. Frustrations and pressures surely make them dismayed or confused for a short time, yet overcoming all the difficulties only leaves them even more resilient, more candid, more self-assured, and more socially adaptive.

A questionnaire we launched on the emotions of China's young people showed that more than 80% of the respondents believed that they were capable of managing their emotions, which is very gratifying.

Fourth, they are very responsible. People used to think the youth of the 1990s and the 2000s lived an easy life and may not be able to take on heavy tasks. However, the major tests posed by the poverty alleviation campaign, COVID-19 response, as well as flood relief testified that they are responsible enough. In daily life, many youth who work hard at their posts, be it border guards, ordinary laborers, deliverymen, or ride-hailing drivers, are fulfilling their responsibilities to families and society through solid and industrious efforts.

Our work involves a fairly large number of volunteers. For 18 consecutive years, we organized volunteers to support education in remote and underdeveloped regions through the Go West program, engaging more than 400,000 virtuous, capable youth. Such experiences enabled them to develop in an all-around way. We have established a national database for youth volunteers, and so far, over 90 million are in the pool. Each year, many volunteers provide services to society through very good performance. As we have mentioned, most of the volunteers systematically mobilized to serve national games or exhibitions are college students who demonstrate a very good image of the youth.

Fifth, they have a broader vision. Nowadays, the post-figurative, co-figurative, and pre-figurative culture has become a topic. The youth today know much more than their elders. Every year, hundreds of thousands of youth study abroad, which might affected slightly due to the COVID-19 pandemic. And we also see roughly the same number of overseas returnees start their careers in China. Also, the youth get to know the world better and develop a broader vision through surfing the internet and making acquaintances with some of the hundreds of thousands of foreigners studying in China. They can value the relations between China and the world in a more objective and comprehensive way. To sum it up, we need to carefully protect and respect the youth of the new era and tap into their full potential. Thank you.

Jiemian.com:

A record 10.76 million new graduates are expected to enter the job market this year, adding to the challenges the market is already facing due to COVID-19. What support measures are there to solve the employment difficulties of young people? Thank you.

Fu Zhenbang:

Employment is the cornerstone of youth well-being and development. The Party and the State have been attaching great importance to employment and strengthening the implementation of the employment-first policy. Different departments, including the Ministry of Finance, the National Development and Reform Commission, the Ministry of Education, and the Ministry of Human Resources and Social Security, have made concerted efforts to take various measures to promote the full employment of young people. Based on its own responsibilities, the CYLC has also done its best to promote youth employment. Faced with great employment pressure this year, China has increased finance input and policy support. The authorities have made great efforts in easing the difficulties of businesses, keeping the operations of market entities stable, and stabilizing employment. Great efforts have also been made in expanding the implementation of programs such as "San Zhi Yi Fu" and "Xibu Jihua" (through which graduates take community-level posts in education, agriculture, health care and poverty relief in the rural area and in western China) to continuously increase employment opportunities in the public sector. Much effort has been made in the introduction of special projects for the promotion of employment of college graduates, including the introduction of public employment services to campuses and visits of Party secretaries and presidents of colleges and universities to enterprises to expand job opportunities and bolster employment, to further improve the youth employment service system. Guided by the core principle of serving the youth and making full use of our organizational strength, the CYLC gives priority to the following four areas of work.

First, we guide young people to establish a positive outlook on employment, career choice, and how to strive for goals. More than a year ago, we published a book about interactions between Xi Jinping and college students . Recently, China Youth Daily serialized the stories from the 26th to 50th issue of the book, telling many vivid stories about choices of life paths and careers, offering valuable experiences for our contemporary college students to learn from.

Second, we have strengthened our work on ensuring employment for key youth groups. Since the end of last year, we have promoted the employment of college students, with a focus on providing targeted assistance and support for students from low-income households in non-key colleges and universities. This year, we have organized and mobilized league cadres at all levels, especially cadres of the youth league committee in colleges and universities, to offer one-on-one assistance to 72,000 such students. We do this by finding out about their basic situation before providing employment guidance and job matching. So far, we have found jobs for 25,000 disadvantaged students. We strive to provide targeted assistance and support for more than 50,000 students from low-income households in non-key colleges and universities this year.

Third, we promote youth entrepreneurship to boost employment. The CYLC has initiated a program for promoting youth entrepreneurship in China since 1998. This year, with mass entrepreneurship and innovation as the backdrop, we have further deepened the promotion of youth entrepreneurship and driven more youth employment through youth entrepreneurship. We encourage young people to start their own businesses, and place special focus on supporting college students' entrepreneurship, young people returning to their hometowns to start their own businesses, and technology-based entrepreneurship.

Fourth, we safeguard the legitimate rights and interests of youth in employment. On one hand, we cooperate with the authorities to strengthen policy advocacy, actively promoting the protection of employment and labor rights and interests of people working in new business forms and occupations. On the other hand, we pay special attention to the unfair treatment and infringement on rights and interests that college graduates may encounter during job hunting and provide necessary legal aid to support and guide graduates to consciously and effectively protect their rights and interests in employment.

We believe that, with the attention and support of the government and the care and support of the society, the Chinese youth in the new era will strive on their own, have their talents fulfilled, and create a fabulous life through hard work and wisdom. Their young lives will shine brilliantly as they participate in the great efforts of building a modern socialist country in all respects and realizing the Chinese Dream of national rejuvenation. Thank you.

Xing Huina:

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

People.cn:

The white paper specifically refers to the International Youth Sustainable Development Index Report. As far as I know, this is the first time China has released such a report on the international index ranking of youth development. What's the original intention of conducting this research? How will this research promote youth development in China? Thank you.

He Junke:

Thank you. I will answer your question. The Middle- and Long-term Youth Development Plan (2016-2025) lists 10 key areas of youth development. These key areas concerning youth development are similar in other countries, including employment, education, social participation, etc. How do we measure youth development among countries with simplicity? Drawing on the design of the Human Development Index by the United Nations Development Program, we integrated the relevant data into a concise indicator system to evaluate youth development and related policy impact in various countries. We have also noticed that organizations such as the Commonwealth Secretariat, the European Youth Forum and the Social Progress Imperative have conducted similar studies based on their own positions and information.

The main purpose of our research was to conduct an in-depth analysis of the institutional and policy factors behind the different levels of youth development in different countries and also to better learn from the good practices of other countries in the formulation of youth development policies. Since February last year, a joint project group comprising China Youth and Children Research Center, China International Youth Exchange Center, the Center for Youth Moral Education, Tsinghua University, and the Research Center for Contemporary China at Peking University has been conducting in-depth research on this issue, and the research findings were presented in the International Youth Sustainable Development Index Report 2021, which was released last year. After its release, the report has attracted some attention in various fields and has received relatively positive feedback. This is the first international comparative study of youth development published by China. In terms of research methodology, by focusing on the key areas of youth development, the research selected five primary indicators and 17 secondary indicators, involving five domains of health and living, education and culture, employment and entrepreneurship, family and society, and social participation. The data we used was publicly available and comparable worldwide. In this way, the study finally picked 85 countries for objective, fair, and balanced data processing and evaluation.

China ranks 23rd, around the top 27%, of the 85 countries, higher than its positions in per capita GDP and Human Development Index rankings, which are 34% and 45%, respectively. This shows that the level of youth development in our country is ahead of the overall level of economic and social development, which also reflects the achievement China has made by prioritizing youth development. The excess is actually due to the superiority of the Chinese system and the correctness of the philosophy of youth development. Admittedly, we have also seen that there are still gaps in the rankings in some indicators. For example, in the education and culture domain, China ranks around the top 40%, which is relatively low. This prompts us to continue to improve the availability and quality of education for young people. As for youth health, although China ranks relatively high, around the top 15%, there are still many issues such as strength and myopia. And we also need to promote social public service among our young people.

In general, we will continue to learn from the valuable experiences of other countries in the world, based on the reality of our country, guided by the youth development index, to make China's youth policy more effective. Thank you.

Xing Huina:

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

Translated and edited by Yang Xi, Liu Sitong, Xu Xiaoxuan, Zhang Rui, Zhou Jing, Wang Yanfang, Li Huiru, Chen Xia, Liu Jianing, He Shan, Qin Qi, Wang Qian, Wang Yiming, Zhu Bochen, Duan Yaying, Xu Kailin, David Ball, Jay Birbeck, and Tom Arnstein. 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:

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

Chairperson:

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

Date:

April 18, 2022

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 2022 and then take your questions.

Next, I'll give the floor to Mr. Fu.

Fu Linghui:

Friends from the media, good morning. 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 multiple tests of an increasingly grave and complex international environment and frequent outbreaks of COVID-19 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 have strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, coordinated COVID-19 prevention and control efforts and economic and social development in a reasonable way, made economic stability the top priority, and pursued progress while ensuring stability. As a result, the nation's economic recovery was sustained and the operation of the economy was generally stable.

According to preliminary estimates, gross domestic product (GDP) in the first quarter reached 27.02 trillion yuan, up by 4.8% year on year at constant prices, or up by 1.3% compared with the fourth quarter of 2021. By industry, the value added of the primary industry was 1.1 trillion yuan, up by 6% year on year; that of the secondary industry was 10.62 trillion yuan, up by 5.8%; and that of the tertiary industry was 15.3 trillion yuan, up by 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 4.8%. With generally favorable weather conditions and stronger agricultural production services, spring farming and preparation were carried out in a steady and orderly manner. According to the year-round planting intentions survey, the nationwide planting area intended for wheat and rice was generally stable and that for soy beans increased considerably. In the first quarter, the output of pork, beef, mutton and poultry was 23.95 million metric tons, up by 8.8% year on year. Of this total, the outputs of pork, beef and mutton were up by 14%, 3.6% and 1.4%, respectively. The output of milk increased by 8.3% and that of eggs went up by 2.5%. At the end of the first quarter, the number of pigs registered in stock was 422.53 million, up by 1.6% year on year, of which 41.85 million were breeding sows.

Second, industrial production grew quickly and the mid-to-high end manufacturing industry enjoyed sound growth.

The total value added of industrial enterprises above designated size grew by 6.5% year on year in the first quarter. In terms of sectors, the value added of mining increased by 10.7% year on year, that of manufacturing increased by 6.2%, and that of the production and supply of electricity, thermal power, gas and water increased by 6.1%. The value added of high-tech manufacturing and equipment manufacturing increased by 14.2% and 8.1%, respectively, which were 7.7 percentage points and 1.6 percentage points faster than that of industrial enterprises above designated size. An analysis by types of ownership showed that the value added of state holding enterprises was up by 5% year on year; that of share-holding enterprises was up by 7.8%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 2.1%; and that of private enterprises was up by 7.6%. In terms of products, the production of new-energy vehicles, solar cells and industrial robots rose by 140.8%, 24.3% and 10.2%, respectively. In March, the value added of industrial enterprises above designated size grew by 5% year on year, or 0.39% month on month. In March, the Manufacturing Purchasing Managers' Index stood at 49.5%, and the Production and Operation Activity Expectation Index was 55.7%. In the first two months, the total profits by industrial enterprises above designated size reached 1.16 trillion yuan, up by 5% year on year.

Third, the service sector continued to grow and modern services registered a solid growth momentum.

In the first quarter, the service sector continued to recover. Specifically, the value added of information transmission, software and information technology services and financial intermediation grew by 10.8% and 5.1% year on year, respectively. The Index of Services Production increased by 2.5% year on year in the first quarter and decreased by 0.9% year on year in March. In the first two months, the business revenue of service enterprises above designated size grew by 13.6% year on year. In March, the Business Activity Index for Services stood at 46.7%, and the Business Activity Expectation Index was 53.6%. Industries involving the close contact and gathering of people, such as railway transportation, air transportation, lodging and catering, were greatly impacted by the pandemic. The Business Activity Index for industries including telecommunication, broadcast, television and satellite transmission services, monetary and financial services, and insurance services stayed within the high expansion range of 55% and above.

Fourth, market sales maintained growth and online retail sales were active.

In the first quarter, the total retail sales of consumer goods reached 10.87 trillion yuan, up by 3.3% year on year. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 9.43 trillion yuan, up by 3.2%, and that in rural areas reached 1.44 trillion yuan, up by 3.5%. Grouped by consumption patterns, the retail sales of goods were 9.8 trillion yuan, up by 3.6%; the income of catering was 1.07 trillion yuan, up by 0.5%. Goods related to people's basic living enjoyed good sales, with the retail sales of grain, oil and food, and daily necessities by enterprises above designated size up by 9.3% and 6.6%, respectively. The sales of upgraded consumer goods grew fast. The retail sales of cultural and office supplies, and gold, silver and jewelry by enterprises above designated size grew by 10.6% and 7.6%, respectively. Online retail sales reached 3.01 trillion yuan, up by 6.6%. Specifically, the online retail sales of physical goods were 2.53 trillion yuan, up by 8.8%, accounting for 23.2% of the total retail sales of consumer goods. In March, the total retail sales of consumer goods reached 3.42 trillion yuan, down by 3.5% year on year and 1.93% month on month.

Fifth, investment in fixed assets increased, and investment in high-tech industries and social sectors grew fast.

In the first quarter, the investment in fixed assets (excluding rural households) reached 10,487.2 billion yuan, up by 9.3% over that of the previous year. Specifically, the investment in infrastructure was up by 8.5% year on year; that in manufacturing was up by 15.6%; and that in real estate development was up by 0.7%. The floor space of commercial buildings sold stood at 310.46 million square meters, down by 13.8%. The total sales of commercial buildings were 2,965.5 billion yuan, down by 22.7%. By industry, the investment in the primary industry went up by 6.8%, that in the secondary industry up by 16.1%, and that in the tertiary industry up by 6.4%. Private investment totaled 5,962.2 billion yuan, up by 8.4%. The investment in high-tech industries grew by 27.0%. Specifically, the investment in high-tech manufacturing and high-tech services grew by 32.7% and 14.5%, respectively. In terms of high-tech manufacturing, the investment in the manufacturing of electronic and communication equipment and in the manufacturing of medical equipment, measuring instruments, and meters grew by 37.5% and 35.4%, respectively. Regarding high-tech services, investment in information services and services for the transformation of scientific and technological achievements went up by 21.3% and 19.0%, respectively. Investment in social sectors increased by 16.2%. Specifically, the investment in the health sector and education sector increased by 23.8% and 17.2%, respectively. In March, the investment in fixed assets (excluding rural households) went up by 0.61% month on month.

Sixth, imports and exports of goods witnessed rapid growth, and the trade structure continued to optimize.

In the first quarter, the total value of imports and exports of goods was 9,415.1 billion yuan, an increase of 10.7% over that of the previous year. The total value of exports was 5,226.0 billion yuan, up by 13.4%, while that of imports was 4,189.1 billion yuan, up by 7.5%. The trade balance was 1,036.9 billion yuan in surplus. The imports and exports of general trade increased by 13.9%, accounting for 63.2% of the total value of imports and exports, 1.8 percentage points higher than that of the same period of the previous year. Imports and exports by private enterprises accounted for 48% of the total value of imports and exports, 1.4 percentage points higher than the same period of the previous year. In March, the total value of imports and exports was 3,206.5 billion yuan, up by 5.8% year on year. The total value of exports was 1,753.5 billion yuan, up by 12.9%, and that of imports was 1,453 billion yuan, down by 1.7%.

Seventh, consumer price experienced mild growth, and the year-on-year growth of producer prices for industrial products slowed down.

In the first quarter, the consumer price index (CPI) grew by 1.1% over that of the previous year. Specifically, the CPI in urban areas went up by 1.2%, and that in rural areas went up by 0.7%. Grouped by commodity categories, prices for food, tobacco, and alcohol went down by 1.3% year on year; clothing up by 0.5%; housing up by 1.4%; articles and services for daily use up by 0.6%; transportation and communication up by 5.5%; education, culture, and recreation up by 2.6%; medical services and health care up by 0.6%; and other articles and services up by 0.7%. In terms of food, tobacco, and alcohol prices, the price of grain went up by 1.7%, fresh fruit up by 6.9%, fresh vegetables up by 3.7%, and pork down by 41.8%. The core CPI, excluding the price of food and energy, grew by 1.2% over that of the previous year. In March, the consumer price index went up by 1.5% year on year, 0.6 percentage points faster than that of February, and maintained the same level month on month.

In the first quarter, producer prices for industrial products went up by 8.7% year on year. Specifically, the prices in March went up by 8.3% year on year, 0.5 percentage points lower than the growth in February, or up by 1.1% month on month. In the first quarter, the purchasing prices for industrial producers went up by 11.3%. Specifically, the prices in March went up by 10.7% year on year, 0.5 percentage points lower compared with the growth in February, or up by 1.3% month on month.

Eighth, newly increased employment in urban areas expanded, and surveyed unemployment rate increased. 

In the first quarter, the newly increased employed people in urban areas numbered 2.85 million, and the urban surveyed unemployment rate averaged 5.5%. In March, the urban surveyed unemployment rate was 5.8%, 0.3 percentage points higher compared with that in February. The surveyed unemployment rate of the population with local household registration was 5.6%, and that of the population with non-local household registration was 6.3%, among which the rate of the population with non-local agricultural household registration was 5.9%. Specifically, the surveyed unemployment rates of the population aged from 16 to 24 and from 25 to 59 were 16.0% and 5.2%, respectively. The urban surveyed unemployment rate in 31 major cities was 6%. The employees of enterprises worked 47.3 hours per week on average. At the end of the first quarter, the number of migrant workers who left their hometowns and worked in other places totaled 177.8million. 

Ninth, residents' income increased stably and urban-rural per capita income ratio narrowed. 

In the first quarter, the nationwide per capita disposable income of residents was 10,345 yuan with nominal growth of 6.3% year on year, or a real growth of 5.1% after deducting price factors. In terms of permanent residence, the per capita disposable income of urban households was 13,832 yuan with nominal growth of 5.4% year on year and real growth of 4.2%; the per capita disposable income of rural households was 5,778 yuan with nominal growth of 7.0% year on year and real growth of 6.3%. In terms of income source, the nationwide per capita salary income, net operative income, net property income, and net income from transfers saw a growth of 6.6%, 5.4%, 6.1%, and 6.3% in nominal terms, respectively. The per capita disposable income of urban households was 2.39 times that of rural households, 0.04 less than the ratio of the same period last year. The median of nationwide per capita disposable income of residents was 8,504 yuan with nominal growth of 6.1% year on year. 

Generally speaking, the national economy in the first quarter continued the momentum of recovery, performing within the reasonable range. However, we must be aware that with the domestic and international environment becoming increasingly complicated and uncertain, economic development is facing significant difficulties and challenges. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and fully implement the guiding principles of the Central Economic Work Conference and the arrangements made by the government work report. We must coordinate the COVID-19 response and economic and social development, make economic stability our top priority, and pursue progress while maintaining stability, ensuring stable growth in an even more prominent position. We must further strengthen the implementation of macro policies, take solid steps to ensure stability on six key fronts (employment, the financial sector, foreign trade, foreign investment, domestic investment, and expectations) and security in six key areas (job security, basic living needs, operations of market entities, food, and energy security, stable industrial and supply chains, and the normal functioning of primary level governments), focus on maintaining stable macroeconomic performance, continue to stabilize employment and prices, ensure basic living needs are met, and keep the economy performing within an appropriate range. 

Thank you.

Shou Xiaoli:

Thank you for your introduction, Mr. Fu. Let's move on to the question-and-answer session. Please identify the media outlet you represent before asking a question. 

CNR:

According to the newly-released major economic indicators for the first quarter, industrial production has maintained rapid growth. What are the reasons? What are your expectations for its performance in the days to come? Thank you. 

Fu Linghui:

Thanks for your questions. Industrial production has maintained stable overall this year due to the policies and measures to promote a stable performance of the industrial sector. As a result, the total value-added of industrial enterprises above the designated size grew by 6.5% year-on-year in the first quarter, higher than that of the fourth quarter of last year, and it has maintained rapid growth. Such rapid growth in industrial production results from economic recovery both domestically and globally, and it is also due to industrial innovation as an enhanced driving force and industrial upgrading as a continued driver. Moreover, ramped-up efforts to ensure market supply and rapid growth in relevant sectors have also contributed. 

First, the industrial upgrading has been outstanding as a driving force. Market demand for medium- and high-end products has increased due to the changes in our stage of development. Moreover, industrial upgrading has been accelerated thanks to the effective implementation of the innovation-driven development strategy. As a result, the equipment manufacturing industry has seen sound development, and the high-tech manufacturing sector has witnessed rapid growth, greatly supporting the development of the industrial sector. The value-added of the equipment manufacturing industry increased by 8.1% year-on-year in the first quarter. Among these, the value-added of the electrical machinery and equipment manufacturing sector and the electronic equipment manufacturing sector, such as computers and telecommunications, increased by more than 10%, boosting the value-added growth of industrial enterprises above the designated size by around 1.7 percentage points. The value-added of the high-tech manufacturing industry increased by 14.2% year-on-year in the first quarter, which is also markedly higher than the overall growth of the industrial enterprises above the designated size. 

Second, the output of the consumer goods manufacturing industry has increased. Given the sustained economic recovery, people's demand for consumer goods has grown, leading to growth in the relevant manufacturing sector. The value-added of the consumer goods manufacturing sector climbed 8.1% year-on-year in the first quarter, along with that of the agricultural and sideline food processing sector, the food manufacturing sector, as well as the sector of wine, beverage, and refined tea manufacturing, and the sector of the pharmaceutical manufacturing rising 6.4%, 6%, 12.1%, and 11.8%, respectively. These four sectors have boosted the value-added growth of industrial enterprises above the designated size by around 1 percentage point.

Third, the exports of industrial products have witnessed rapid growth. China has a complete industrial system with strong industrial supporting capability, facilitating it to adapt to changes in global market demands quickly. The increased demand for our industrial products exports to the international market has boosted China's industrial output. The export delivery value of the industrial products climbed 14.4% year-on-year in the first quarter, maintaining rapid growth. The auto manufacturing sector and the specialized equipment manufacturing sector both rose by more than 20%. 

Fourth, the production of the coal and power industries has seen an increase. We have stepped up efforts to ensure the supply of energy and raw materials. Thereby the output of the relevant sectors has witnessed rapid growth. The value-added of the mining sector increased by 10.7% year-on-year in the first quarter, with that of the coal mining and dressing sector climbing 13.2%. Moreover, the sector of production and supply of electricity and thermal power and the gas production and supply sector has also maintained rapid growth. According to preliminary calculations, the increase in the sectors regarding mining, electricity, thermal power, and gas has boosted the growth of industrial added value above designated size by around 1.4 percentage points.

Moreover, those measures and policies to help enterprises alleviate their difficulties have also played a positive role in stabilizing the industrial output. In the first quarter, enterprises' satisfaction with the preferential policies rose 2.7 percentage points compared with the fourth quarter of 2021, with their satisfaction with the tax and fee reduction policy surpassing 85%, according to the results of a survey of nearly 110,000 industrial enterprises above the designated size nationwide.

However, the growth of the production of the industrial enterprises above the designated size slowed down in March due to the growing impact of the pandemic, with their difficulties in production and operation being increased. Given the new situation and changes, we need to take the challenges seriously, and adopt proactive measures to address them. We should also bolster confidence, as the industrial production is generally stable with solid resilience, capable of withstanding the pressure, and maintaining stable performance. 

Going forward, we will ensure the implementation of the support policies to promote industrial economic development. We will step up efforts to support the manufacturing sector and micro and small enterprises, and increase the support for those enterprises severely affected by the pandemic. We will also ensure the supply of energy and raw materials, stabilize the prices, maintain the stability of industrial and supply chains, and promote the stable and healthy development of the industrial sector. Thank you. 

China Daily:

Recently, due to the complex international environment and the sporadic COVID-19 outbreaks in China, the country's economy is also facing greater pressure. What do you think about this? In addition, what were the characteristics of the economic performance in the first quarter? What's your comment on this? Thank you.

Fu Linghui:

Thanks for your questions. China's economy has attracted much attention, especially the economic performance in the first quarter. Since the beginning of this year, the international situation has become more complex and severe, and the country has seen multiple, sporadic COVID-19 outbreaks at home, which have made greater impact on economic performance. Faced with the complex situation, all localities and government departments have thoroughly implemented the decisions and plans of the CPC Central Committee and the State Council, insisted on seeking progress while maintaining stability, focused on stabilizing the macroeconomic market, and effectively responded to risks and challenges. The national economy continued to recover, and got off to a steady start. This was mainly reflected in the following aspects.

First, the main macro indicators remained within a reasonable range. From the perspective of growth, the economy continues to maintain a momentum of expansion. In the first quarter, the GDP increased 4.8% year on year, 0.8 percentage point higher than that in the fourth quarter of the previous year, and the month-on-month growth rate was 1.3%. In terms of employment, despite the impact of the pandemic, the country's surveyed unemployment rate in urban areas increased in March, but in general, the overall stable employment situation has not changed. In the first quarter, the national urban surveyed unemployment rate stood at 5.5%, basically the same as the first quarter of last year. In terms of commodity prices, the supply of goods and services in the market was generally sufficient, and consumer prices rose moderately. In the first quarter, consumer prices rose 1.1% year on year. In terms of the balance of payments, the trade surplus in goods expanded, the trade deficit in services narrowed, foreign exchange reserves remained stable at around $3.2 trillion, and the balance of payments remained stable.

Second, industrial and agricultural production was generally stable. Spring plowing and preparation for plowing were carried out in an orderly manner, and animal husbandry production grew steadily. The agricultural situation remained steady. In the first quarter, the added value of agriculture, forestry, animal husbandry, and fishery industries increased 6.1% year on year, the meat output including pork, beef, lamb and poultry increased 8.8%, and the industrial production grew rapidly. In the first quarter, the added value of industrial enterprises above designated size increased 6.5% year on year, among which the equipment manufacturing industry saw a year-on-year growth of 8.1%.

Third, the trend of innovative development continued. New industries continue to grow. In the first quarter, the added value of the high-tech manufacturing industry increased 14.2% year on year, and the added value of the information transmission, software, and information technology service industry increased 10.8%, both maintaining rapid growth. New business forms and models continued to grow strong. In the first quarter, the online retail sales of physical goods increased 8.8% year on year, maintaining growth from an already high number and accounting for 23.2% of the total retail sales of consumer goods.

Fourth, the economic structure has been adjusted and optimized. The proportion of the manufacturing industry continued to increase. In the first quarter, the added value of the manufacturing industry increased 6.1% year on year. It accounted for 28.9% of the GDP, 1.3 percentage points higher than the same period last year. The leading role of consumption is obvious. In the first quarter, the contribution rate of final consumption expenditure to economic growth was 69.4%, an increase of 18.7 percentage points over the same period last year and higher than the contribution rate of gross capital formation. The income ratio of urban and rural residents declined. In the first quarter, the per capita disposable income ratio of urban and rural residents was 2.39, down 0.04 from the same period of last year.

Fifth, green transformation kept steadily advancing. Green and low-carbon products grew rapidly. In the first quarter, the output of new energy vehicles and solar cells increased 140.8% and 24.3%, respectively. The proportion of clean energy consumption continued to rise. In the first quarter, the proportion of clean energy consumption, such as electricity generated by natural gas, water, nuclear, wind, and photovoltaics, increased 0.8 percentage point over the same period of the previous year. Energy consumption per unit of GDP continued to decline. In the first quarter, energy consumption per 10,000 yuan of GDP dropped 2.3% year on year.

Sixth, people's livelihood kept improving, and residents' income continued to grow. In the first quarter, the country's per capita disposable income increased 5.1% year on year in real terms. Specifically, the per capita disposable income of rural residents increased 6.3% in real terms, and the per capita disposable income of urban residents increased 4.2% in real terms. The income growth of rural residents continued to be faster than that of urban residents, and the basic living consumption of residents was guaranteed. In the first quarter, the added value of the consumer goods manufacturing industry increased 8.1% year on year, maintaining relatively rapid growth. The retail sales of commodities in grain, oil and food, and beverage commodities by enterprises above designated size increased 9.3% and 11.8%, respectively. Investment in the people's livelihood sector continued to increase. In the first quarter, investment in education and health increased 17.2% and 23.8%, respectively.

I want to point out that the global situation has become more complex since March. As the impact of the domestic epidemic continues, some unexpected factors have exceeded expectations. Some major indicators have seen slower increases, and the downward economic pressure has increased. However, the fundamentals of China's long-term positive economic growth have not changed, the continuous recovery of the economy has not changed, nor have the characteristics of great potential, sufficient resilience, and broad space in development. China is fully capable and well-placed to overcome difficulties and challenges and achieve sustainable and healthy economic development.

In the next stage, we will fully implement the spirit of the Central Economic Work Conference and the deployment of the government work report and scientifically coordinate epidemic prevention and control and economic and social development. We will make economic stability our top priority and seek progress while maintaining stability. We will put the steady growth in a more prominent position, intensify the execution of macro policies, pay close attention to the implementation of policies, and strive for early implementation and early results. We will effectively deal with prominent problems, stabilize the fundamentals of the economy, safeguard basic people's livelihood, keep the economy operating within a reasonable range, and continue to make new progress in promoting high-quality economic development.

Thank you.

CNBC:

I have two questions. The first is about employment. The newly added jobs in the first quarter were fewer than in the same period last year. Have you analyzed the reasons behind the decrease? Can you introduce the employment prospects for people aged above 35? My second question is about production. Considering the recent epidemic prevention and control measures, some businesses owners are worried that their businesses could be affected if production does not resume in May. What is your evaluation of the impact of halting production on the economy? Thank you.

Fu Linghui:

Thank you for your questions. Your questions are mainly about employment and the impact of epidemic on production. Since the beginning of this year, the international landscape continues to face grave challenges, while domestically, the impact of the epidemic still persists. Both have resulted in rising pressure on employment. Against this backdrop, the employment-first policy continues to produce effects, and the efforts for easing businesses' difficulties have been intensifying. Overall employment therefore remains stable. In the first quarter, the average surveyed urban unemployment rate stood at 5.5%, 0.1 percentage point higher than the same period last year. The unemployment rate among those aged between 25 and 59, the majority of the labor market, stood at 4.9%, unchanged from the same period last year.

While analyzing monthly trends, the surveyed urban unemployment rate rose in January and February, mainly because more people wanted to seek new jobs around the Chinese New Year. Based on our past experience, as those jobseekers would usually find new positions around March, the surveyed urban unemployment rate would gradually fall. However, the epidemic resurgence since March of this year has posed challenges for some jobseekers, stopping them from participating in job fairs. Therefore, the surveyed urban unemployment rate continued to rise in March to 5.8%, 0.3 percentage point higher than that in February. This reflected the increasing difficulty in production and business operations as well as mounting pressure on employment. 

Although faced with difficulties, China still has many favorable conditions for stabilizing employment. Policies and measures to coordinate epidemic control and economic and social development will continue to produce effects, and the adverse impacts of the epidemic will be gradually brought under control. This year, the Chinese government will further the scale of tax-and-fee reductions and provide more effective support to the real economy so as to help ease the difficulties of businesses and ensure job opportunities. The robust environment for starting businesses and engaging in innovation is conducive to increasing jobs. Meanwhile, we have provided better vocational skills training and improved policies for employment support to facilitate supply-demand matching in the job market.

In the next stage, we will make full use of those favorable conditions to coordinate epidemic prevention and control with economic and social development. We will strive to maintain stable employment by strengthening the employment-first policy, easing the burdens of businesses to stabilize and expand employment, keeping the operations of market entities stable, and maintaining job security. We'll do this especially by improving policies on employment support for key groups such as college graduates and rural migrant workers.

As for the second question regarding the impact of the epidemic on production, since the beginning of this year, and March in particular, due to the COVID-19 resurgence in some areas, face-to-face sectors, especially the face-to-face service sector, have faced grave challenges. Consumption in catering, hospitality, retail, transport, and tourism has declined, which has had a negative influence on the production of the sectors involved. In areas with more severe epidemic situations, enterprises have reduced or even halted production. Fettered transport and logistics services also impeded industrial production. Despite those problems and pressure, we must see that there are favorable conditions for the Chinese economy to continue to recover.

First, the country's economy enjoys strong resilience, and the fundamentals sustaining its long-term economic growth remain unchanged, as does its economic recovery trajectory. China has a full-fledged industrial system, ever-improving infrastructure, and a super-sized domestic market. Efforts to promote innovation-driven development are paying off. All of these have laid a sound foundation for promoting sustained and healthy economic growth.

Second, the country has the requisite conditions to contain the epidemic in a scientific manner. Since the epidemic outbreak, China has conducted science-based and targeted prevention and control and developed a string of effective measures which agree with the actual conditions to ensure overall economic and social stability. Since the beginning of this year, the transmission of coronavirus has demonstrated new traits. However, as long as we stick to science-based prevention and control, we will gradually halt the spread of the epidemic and lower the negative impact of the epidemic on economic and social development.

Third, the country has rolled out a series of supportive policies. Since the beginning of this year, all local authorities and government departments have made economic stability our top priority, pursuing progress while ensuring stability and proactively introducing pro-stability policies. We will take further steps to cut taxes and fees, and tax and fee reductions this year are expected to reach 2.5 trillion yuan. In the face of the complex situation, we will further strengthen macro policies and encourage the financial sector to provide more effective support to the real economy. The People's Bank of China recently announced it would lower required reserve ratios to reduce financing costs of businesses, which will help enterprises resolve difficulties and promote stable economic performance.

In the next stage, we will continue to promote economic recovery by responding to the COVID-19 epidemic and pursuing economic and social development in a well-coordinated way. We will put into effect all measures for routine epidemic prevention and control and ensure that policies that have been introduced are implemented and deliver results at an early date. We will continue to expand domestic demand, help enterprises ease their difficulties, and ensure people's basic living needs. Thank you.

Hong Kong Bauhinia Magazine:

Since the start of this year, global commodity prices have stayed firm. What does the NBS predict for the trend of this year's commodity prices? Thank you.

Fu Linghui:

Thanks for your question. Since the start of this year, the international situation has been undergoing multiple changes, and global commodity prices have soared to a new high. According to the statistics of the World Bank, in March, the global energy price index rose 24.1% month-on-month, and the non-energy price index increased 8.1% month-on-month, resulting in the general index reaching a new high in recent years.

Global commodity prices may remain high in the next stage and are prone to fluctuations. From the point of supply, Russia is a major country exporting energy, grains, and chemical fertilizers, while Ukraine's corn and wheat export account for a larger global share. The geopolitical conflict between Russia and Ukraine will lead to a decline in the output of related products and an increase in export controls, which will affect the global commodity supply. From the perspective of demand, the sustained recovery of the global economy will support the growth of commodity demand. However, amid expectations of a supply shortage, the hoarding demand of some commodity importers has increased, exacerbating the imbalance between supply and demand. Meanwhile, the geopolitical conflict has led to the sanction and anti-sanction practices between some countries and affected the efficiency of the global supply chain. Due to these factors, commodities' transportation and transaction costs have increased, putting further upward pressure on prices.

Therefore, against the backdrop of a tightening supply-demand relationship and increasing uncertainties in the global commodity market, high prices prone to fluctuations will be more likely to be witnessed.

Thank you.

Bloomberg:

My question is about industrial output. Crude steel output in the first quarter fell 10.5%, cement fell 12.1%, and yet fixed asset investment (FAI) rose 9.3%. How do you explain the difference, or the massive divergence, between the collapse in industrial output for these products that are used for investment but the continued rise in investment? Thank you.

Fu Linghui:

Thank you for your question. More attention has been paid to the date this year. In general, with the development of China's economy in recent years, which is changing to high-quality development from the high-speed growth, we can see new changes in the driving force of economic growth compared with the past. In industrial production, we have seen that high-tech manufacturing and equipment manufacturing have maintained rapid growth, offering increased support for industry . In industrial investment, high-tech and equipment manufacturing investment has also maintained rapid growth. Therefore, the mode driving economic growth through industrialization and urbanization has changed dramatically compared with the past. You just mentioned that the output of crude steel and cement has dropped. However, industrial production has maintained rapid growth mainly due to the change of driving force of economic development. Now, the industrial sector is moving towards medium and high-end in the value chain. This year, among the three major investment areas, the manufacturing investment has seen a rapid increase, significantly driving the development of traditional industrial products, such as steel and cement. We should treat it objectively and conduct conscientious analyses to draw an accurate conclusion about such an economic phenomenon. Thank you.

The Paper:

Recently, the social life and economy of Shanghai and other Chinese regions have been impacted by the COVID-19 pandemic. How does the NBS view this impact? Will it diminish China's possibility of achieving its economic growth target this year? Thank you. 

Fu Linghui:

Thanks for your questions. Since the beginning of this year, the world has been suffering from disturbances; the COVID-19 pandemic has continued to sprawl, and geopolitical conflicts have worsened, adding to instability and uncertainty in China's external environment. Domestically, the pandemic has arisen sporadically, and some emergency factors have gone beyond our expectations. All these have compounded the downward pressure on the Chinese economy. However, despite all these unfavorable factors, under the strong leadership of the CPC Central Committee, all localities and departments in China, following a principle of upholding stability as the top priority and pursuing progress on the basis of ensuring stability, have adopted a scientific approach to coordinate pandemic control and social development, intensified efforts to stabilize economic growth, and managed to keep the economy operating within a reasonable range on the whole. 

In terms of the next stage's economic trend, though pressure will continue to exist in the short run, China still has many favorable conditions for sustaining steady growth for the whole year. 

First, consumption is expected to maintain its recovery momentum. Though the recent pandemic resurgence has restrained consumption growth, recovery momentum will not change, and consumption will still demonstrate its role as the ballast of the Chinese economy. In the first quarter, final consumption contributed 69.4% to China's GDP, still the highest among the three major economic drivers of consumption, investment and exports. As China gradually reins in the impact of the pandemic over time and the employment-first policy continues to pay off, the consumption power and desire of the Chinese people are bound to increase. Meanwhile, China will take other measures to sustain consumption growth, including efforts to promote spending on new energy vehicles, green and smart home appliances, and other big-ticket items. We will also facilitate in-depth integration of online and offline consumption, foster new forms and models of consumer spending, and upgrade and expand the rural consumer market. 

Second, the role of investment as a growth driver is expected to grow. Since the beginning of this year, all localities have actively pushed ahead with the construction of major projects, thus stimulating rapid investment growth. In the first quarter, manufacturing investment grew 15.6% year on year, and infrastructure investment by 8.5%. As China continues to scale up support for the real economy and upgrade its traditional industries, and emerging industries continue to gather momentum for innovative development, more favorable conditions will be created for industrial investment growth. Meanwhile, the efforts to make infrastructure investments in an appropriately forward-looking manner centering on China's major strategic initiatives and the 14th Five-Year Plan will also drive investment growth. 

Third, industrial upgrading has picked up pace. In recent years, China has taken a slew of measures to promote industrial upgrading, including efforts to further implement its innovation-driven development strategy, grow its strategic scientific and technological strength, enhance its capacity for scientific and technological innovation, beef up incentives for corporate innovation, and raise the proportion of R&D expenses for additional tax deductions. The results of these measures have continued to show. In the first quarter, the added value of high-tech manufacturing expanded by 14.2% year on year, and equipment manufacturing 8.1%, signifying a steady rise in the application of industrial technologies.  

Fourth, green and intelligent transformation has become a stronger growth driver. As China makes steady progress in green development, the transition toward green and low-carbon energy accelerates, the demand for new energy products expands, and the requirement for conventional industries to conserve energy and reduce carbon emissions increases, helping to boost the growth of related industries. In the first quarter, the output of new energy vehicles and solar cells increased by 140.8% and 24.3% year on year, respectively. The rapid growth in 5G networks, information technology, and artificial intelligence have also given birth to new sources of industrial growth. In the first quarter, the manufacturing of intelligent consumer equipment grew by 10% year on year. 

Fifth, opening up continues to pay dividends. In spite of complicated and challenging international circumstances, the world economy is still recovering on the whole, and demand for China's exports will continue to grow. In the face of the pandemic, Chinese export enterprises have shown strong adaptability to the changes in external demand. Meanwhile, China's policies to stabilize foreign trade have continued to work, the Belt and Road Initiative has continued to deliver benefits, and new forms of business for foreign trade have developed rapidly, all creating favorable conditions for foreign trade growth. In the first quarter, China's imports and exports expanded by 10.7% from a high base last year, showing the resilience of the foreign trade. 

Sixth, China's macro-economic policies have continued to pay off. Since the beginning of this year, in the face of the complex situation, all localities and departments have implemented the spirit of the Central Economic Work Conference and the deployments of the government work report. Following the principle of upholding stability as the top priority and pursuing progress while ensuring stability, they have adopted policies to ensure economic stability and increased support for the real economy. China will continue to increase market supply to stabilize prices. In response to the mounting economic downward pressure recently in particular, China will further intensify the implementation of macro policies with early and paced-up arrangements to support market entities, guarantee grain and energy security, maintain the stability of the industrial and supply chains, and meet basic living needs. The policies, as their effects gradually show, will promote steady economic performance. 

In general, our country is able to effectively handle all risks and challenges with a complete industrial system, large market scale and broad market space, ample benefits of reform and opening up, and strong economic governance ability. Throughout 2022, the national economy is expected to maintain recovery and development. Certainly, we should pay much attention to the problems we face. According to the decisions and arrangements of the CPC Central Committee and the State Council, we will continue to conduct pandemic prevention and control and pursue economic and social development in a well-coordinated way, enhance the implementation of macro policies, stabilize the macro-economy, and strive to accomplish this year's projected targets and tasks. 

Thank you.

Cover News:

As of this year, sales in the real estate sector have declined, but the real estate investment has registered a certain amount of growth. What is your opinion on that? What do you expect the future real estate market to look like? Thank you.

Fu Linghui:

Thank you for your questions. People are concerned about the real estate market, and there has been much discussion on the recent changes of real estate indexes. According to historical records, in general, the growth of real estate investment is directly proportional to that of sales in commercial buildings, but the change in growth of real estate investment is markedly less than that of the commercial building sales. That is because once the construction of a real estate project begins, real estate companies continue construction to ensure they get their money back from the project's sales, and thus real estate investment is more stable than the sales. Therefore, even though market sales are sluggish and declining, it is still possible for real estate investment to maintain certain growth, as was the case in 2012, 2014, and 2015.

In the first quarter of 2022, the investment in real estate development increased by 0.7% year on year, but sales of commercial buildings by floor area declined by 13.8%, and sales volume by 22.7%. Therefore, real estate investment continued to increase while sales decreased. That was mainly due to the following reasons. 

First, the effect of relevant policies, such as ensuring delivery. Since the end of 2021, all regions have stuck to the policy of “ensuring delivery, people's basic living needs, and stability,” promoted the resumption of real estate projects previously halted or delayed, and advanced the construction of ongoing projects. In the first quarter, real estate projects with a construction period lasting more than one year saw a rate of investment growth exceeding 10%. With the advancement of real estate projects, in the first quarter, investment in building installation projects in real estate development grew by 0.9% year on year, driving the growth of real estate investment by more than a 0.5 percentage point.

Second, the impact of counting in land purchase expenses. Earlier land purchase expenses are gradually counted into the investment of real estate development while construction of real estate projects advances, which partly accounts for the growth of real estate investment. In the first quarter, land purchase expenses grew by 0.6% year on year, increasing the real estate development investment by more than a 0.1 percentage point.

We should also notice that although the sales of real estate dropped, the sales volume of real estate still exceeded the total investment in the real estate market, and so sales could still support the investment to some extent. Meanwhile, the growth of real estate investment was influenced by prices. Since 2022, prices of construction materials and project installation fees have increased substantially, which drove the nominal increase in the real estate investment to some extent. 

As for the real estate sector's prospects, though real estate sales are declining, as many regions moderately release restrictions on house purchases, lower thresholds for using housing funds, and accelerate approvals of loans for purchasing houses, the housing demands of some cities are released, and the decline of sales by floor area slows. 

Going forward, all regions will stick to the principle that houses are for living in, not for speculation, and continue to stabilize land prices, housing prices, and expectations. The long-term mechanism of the real estate market will be improved to meet reasonable housing demands, and the declining sales of commercial buildings in China is likely to be moderated. With the improvement of the long-term rental market and the accelerated development of government-subsidized housing, the real estate market is expected to be gradually stabilized. Thank you.

Hong Kong Economic Herald:

We recently noted that the Guideline of the CPC Central Committee and the State Council on Accelerating the Establishment of a Unified Domestic Market was released. How should we understand the unified domestic market? In what aspects shall we build the market? Thanks.

Fu Linghui:

Thank you for your questions. The Guideline of the CPC Central Committee and the State Council on Accelerating the Establishment of a Unified Domestic Market was officially released. The guideline stipulates the acceleration of the development of mechanisms and rules for the unified national market, the breaking of local protectionism and market division, and the unblocking of key sticking points restricting economic circulation in order to promote the smooth movement of commercial goods as a production factor in a larger scale. It also stipulates that we should speed up the construction of an efficient and standardized unified domestic market featuring fair competition and sufficient opening-up, and comprehensively advance our domestic market to transform from growing bigger to stronger in a bid to provide a solid support for building a high-standard market system and a high-standard socialist market economy. All these will promote the improvement of relevant systems and advance high-quality economic development. 

First, the building of a unified domestic market is the shoring of the foundation and internal requirement of fostering the new development pattern. As China's economy has entered a high-quality development stage, in the face of the profound and complex changes in the international environment and the unbalanced and inadequate development inside of China, in order to realize the sustainable and sound economic growth, we have to implement the new development philosophy and accelerate the fostering of a double development dynamic, with the domestic economy and international engagement reinforcing each other, and the former as the mainstay. To promote the development of the domestic economy is inseparable from the building and improving of a unified domestic market. Only by accelerating the building of an efficient and normative unified domestic market can we promote the smooth flow of factors and resources and make the domestic economy more dynamic.

Second, the building of a unified domestic market is conducive to creating a stable, fair, transparent, and predictable business environment. In recent years, China has deeply implemented reforms to streamline administration and delegate power, improve regulation, and upgrade services, as well as actively built a market-orientated, law-based, and internationalized business environment. These efforts have provided a sound ecology for various types of market entities to invest and foster businesses, increased the number of market entities, injected vitality into the market, promoted the employment, and accelerated the development. In the next step, with the building of a unified domestic market and further improvement of the fair, transparent, and predictable business environment, we will further stimulate the potential of entrepreneurship and innovation, create more high-quality jobs, and promote the emergence of new industries and models in a bid to inject strong vitality into China's development. 

Third, the building of a unified domestic market is beneficial for promoting scientific and technological innovation and industrial upgrading. With a population of 1.4 billion, China has a distinctive advantage in utilizing its huge market. Building a unified domestic market, ensuring the decisive role of the market in resource allocation and allowing market demand to lead the efficient allocation of innovative resources and orderly flow and reasonable allocation of innovative factors, will encourage innovation, optimize the division of labor, promote competition, boost enterprises' willingness and capabilities to partake in scientific and technological innovation, promote the vigorous development of emerging industries, and encourage companies to go big. This is all in a bid to accelerate the reforms in quality, efficiency, and driving forces and provide strong support for China's high-quality economic development.

Meanwhile, the building of a unified domestic market will be helpful in further reducing market transaction costs and fostering new advantages in engaging with international competition and cooperation.

In the next step, we will earnestly implement the guideline on accelerating the establishment of a unified domestic market, which was jointly released by the Communist Party of China Central Committee and the State Council. We will strengthen the unification of basic market systems and rules, increase high-standard connectivity among market facilities, build a unified factor and resource market, promote high-standard unification between the commodity and service markets, advance fairness and unification in market regulation, and regulate inappropriate competition and acts of market intervention in a bid to accelerate the formation of a high-standard market system and promote sustainable and sound economic development.

Thank you.

Reuters:

In the face of downward economic pressure, especially in April, as more cities have tightened anti-pandemic management and control while prices continue to increase, will there be rising stagflation risks? In addition, could you please provide the contribution statistics of the capital formation to as well as imports and exports to the economic growth in the first quarter? Thank you.

Fu Linghui:

I will answer the second question first. Regarding the contributions of the three key demands to economic growth, in the first quarter, the final consumption expenditure contributed 69.4% to GDP and added 3.3 percentage points to GDP growth; the capital formation contributed 26.9% to GDP and added 1.3 percentage points to GDP growth; net exports of goods and services contributed 3.7% to GDP and added 0.2 percentage points to GDP growth.

Regarding the issues of growth and prices that you are concerned about, I introduced the growth previously. Generally speaking, stable economic recovery and growth will be sustained. I would like to respond to the issue of prices. Since the beginning of this year, the price of global bulk commodities has continued to increase, enlarging its impact on our domestic prices. However, in general, China's strong market supply capacities for goods and services have laid a favorable foundation for stabilizing prices. Since the beginning of this year, consumer prices have increased modestly. In the first quarter, CPI increased by 1.1% compared with the same period of last year, slightly higher than that of the first two months. Meanwhile, core CPI increased by 1.2% on a yearly basis, flat with that of the first two months. The rise of CPI in March has slightly expanded as it increased by 1.5% compared with last March and 0.6 percentage points higher than that of February. Among this, the core CPI in March increased by 1.1% compared with last March, equal to that of February. Generally speaking, it demonstrates the following characteristics.

First, the year-on-year decrease of food prices has narrowed. In March, food prices decreased by 1.5% year on year, narrowing by 2.4 percentage points from the previous month's decrease. Among this, the price of pork fell by 41.4%, 1.1 percentage points lower than that of the previous month.

Second, the increase of industrial consumables has expanded. In March, the prices of industrial consumables increased by 3.5% year on year, 0.4 percentage points higher than that of the previous month.

Third, the increase in service prices has slightly decreased. In March, service prices increased by 1.1% year on year, 0.1 percentage points lower than that of the previous month. 

The expanding growth rate of CPI in March is mainly attributed to the rising prices of vegetables and energy. Due to the pandemic and the weather, vegetable prices saw a year-on-year increase of 17.2% in March from a year-on-year decrease of 0.1% in the previous month. Domestic energy prices increased by 13.4% compared with the same period of last year, 1 percentage point higher than that of the previous month. The two factors added 1.32 percentage points to the growth of CPI, accounting for nearly 90% of the total increase of CPI.

Judging from the trend, despite the international imported factors and supply pressures of some fresh food in the short term, there are many favorable conditions for the CPI to maintain a moderate rise. In terms of demand, consumption and investment demand are still recovering, with limited influence on driving the price. From the perspective of supply, grain production has scored consecutive bumper harvests, and stocks are abundant; the production capacity of live pigs has generally recovered, the supply of pork is generally sufficient, and prices are still falling. This is because the supply capacity of China's commodity and service market is relatively sufficient. In March, the cost of industrial consumer goods excluding energy was relatively low; the price of services rose by 1.1% year-on-year, and the increase was a 0.1 percentage point lower than the previous month. Meanwhile, the measures to ensure market supply and stabilize prices will continue to be effective, which is also conducive to keeping prices stable. Therefore, there are foundations and conditions for prices to maintain a generally stable and moderate upward trend. Thank you.

Shou Xiaoli:

Due to limited time, the last question, please.

The Beijing News:

Since the beginning of this year, the global energy and food supply have been tight under the influence of the international situation. What is the current condition of energy production and agricultural production in China? Can we meet market needs in the next stage? Thank you.

Fu Linghui:

Thanks for your questions. The international situation has undergone significant changes this year, which have had a major impact on global food and energy production and supply. In general, domestic food production and energy supply are generally stable. In recent years, China has attached great importance to agricultural development. It has introduced a series of measures to encourage and support agricultural development, speed up the protection of cultivated land, promote the construction of high-standard farmland, give play to the role of agricultural technologies, and promote the increase of grain production and harvest. Positive results have been achieved as a result. China's grain production has been more than 1.3 trillion jin (650 billion kg) for seven consecutive years, and live pig production has also returned to the level of normal years.

This year, agricultural production has remained generally stable. In the first quarter, the added value of the primary industry increased by 6% year-on-year, maintaining rapid growth. Regarding the planting industry, the total output value increased by 4.8% in the first quarter. Affected by the severe flood last autumn, the winter wheat planting season in some areas was significantly prolonged. The winter wheat planting area was stable and slightly decreased, and the seedlings were weak. Since the spring of this year, the climate in the main winter wheat-producing regions has been generally favorable. All localities have stepped up efforts to do an excellent job in farmland management, and the seedling situation has gradually improved. At the same time, the northwest region is also actively expanding the planting area of spring wheat, and the total planting area of the wheat is basically the same. Regarding livestock farming, the production remained stable. In the first quarter, the total output value of livestock farming increased by 8% year-on-year, and the output of beef, mutton, and poultry increased by 8.8% compared with the same period of the previous year.

For the next stage, the stability of food production can be guaranteed.

First, we will see responsibilities are fulfilled by all stakeholders at all levels and ensure the equal responsibility of the Party and government for grain production. The production areas and output should be ensured in all main producing and marketing areas,, and areas with a balance between production and marketing. We will strengthen the management of arable land and ensure stable grain production.

Second, we will scale up support for food production. The minimum purchase price for rice and wheat will be increased, subsidies for corn and soybean producers and rice subsidies will continue to be stabilized, and a 20-billion-yuan subsidy for agricultural materials will be issued to mobilize farmers' enthusiasm for growing grain.

Third, we will improve planting efficiency. Since 2021, grain prices have remained stable and risen slightly, farmers' income from grain cultivation has increased, and their willingness to plant has increased. But, of course, we must also see that the cost of growing grain has risen, and there are uncertainties such as meteorological disasters, diseases, and insect pests. Therefore, we still need to do an excellent job in grain production to ensure food security.

Regarding energy, energy production has also remained generally stable this year. In the first quarter, the output of major energy products such as coal, gas, and electricity continued to grow, and China's energy supply was generally stable.

First, raw coal production maintained rapid growth. Coal production enterprises have thoroughly implemented the task of increasing coal production and ensuring supply, accelerating the release of high-quality coal production capacity, and effectively increasing coal supply. In the first quarter, the output of raw coal of industrial enterprises above the designated size reached 1.08 billion tons, a year-on-year increase of 10.3%.

Second, oil and gas production grew steadily. We have stepped up efforts in increasing storage and production capacity. In the first quarter, crude oil production of industrial enterprises above the designated size increased by 4.4% year-on-year, and natural gas production increased by 6.6% year-on-year.

Third, electricity production continued to grow. In the first quarter, power generated by industrial enterprises above the designated size increased by 3.1% year-on-year, of which clean energy power increased by 8.3% year-on-year, driving the growth of power production in industrial enterprises above the designated size by 2.1 percentage points.

Influenced by geopolitical conflicts, recently, the price of international energy commodities rose rapidly, the instability of the global energy market increased, and China's energy security is under certain pressure. Still, we have the conditions, capabilities, and methods to ensure a safe, reliable and stable supply of energy. Therefore, in the next stage, in accordance with the decisions and deployments of the Party Central Committee and the State Council, we will further implement the policies and measures that have been introduced to ensure energy supply and price stability, actively increase the supply of major energy products such as coal, oil, gas, and electricity, actively respond to the risks brought about by rising international energy prices, and resolutely meet basic living needs of people in energy consumption, and ensure the safe and stable supply of energy and the stable and healthy development of the economy and society. Thank you.

Shou Xiaoli:

Thank you, Mr. Fu, and friends from the press. That's all for today's press conference.

Translated and edited by Xu Xiaoxuan, Ma Yujia, Gong Yingchun, Liu Sitong, Zhang Rui, Wang Wei, Zhou Jing, Li Huiru, Yuan Fang, Liu Jianing, Qin Qi, Wang Yiming, Zhang Junmian, Wang Qian, Zhu Bochen, Yang Xi, Huang Shan, David Ball, Jay Birbeck and Tom Arnstein. 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:

Hao Chun, director general of the China Manned Space Agency

Yang Hong, academician of the Chinese Academy of Engineering, chief designer of the space station system of the China Manned Space Program (CMSP), and researcher at the China Academy of Space Technology

Huang Weifen, chief designer of the astronaut system of the CMSP and researcher at the China Astronaut Research and Training Center

Sun Jun, chief designer of the space station mission at the Beijing Aerospace Control Center

Zhong Hong'en, deputy chief designer of the space utilization system of the CMSP and researcher at the Technology and Engineering Center for Space Utilization of the Chinese Academy of Sciences

Chairperson: 

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

Date: 

April 17, 2022

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Yesterday, Shenzhou-13's return capsule touched down safely, marking the complete success of the Shenzhou-13 manned mission. Today, we are delighted to have with us Mr. Hao Chun, director general of the China Manned Space Agency; Mr. Yang Hong, academician of the Chinese Academy of Engineering, chief designer of the space station system of the China Manned Space Program (CMSP) and researcher at the China Academy of Space Technology; Ms. Huang Weifen, chief designer of the astronaut system of the CMSP and researcher at the China Astronaut Research and Training Center; Mr. Sun Jun, chief designer of the space station mission at the Beijing Aerospace Control Center; and Mr. Zhong Hong'en, deputy chief designer of the space utilization system of the CMSP and researcher at the Technology and Engineering Center for Space Utilization of the Chinese Academy of Sciences. They will introduce China's progress on the construction of its space station and answer your questions.

Next, I will give the floor to Mr. Hao.

Hao Chun:

Ladies and gentlemen, friends from the media, good afternoon.

It is a great pleasure to meet you, and I would like to thank you for your attention and support of China's manned space program. Yesterday, Shenzhou-13's return capsule safely touched down at the Dongfeng landing site and the crew returned to Beijing in the afternoon. Entrusted by the general headquarters of the space station phased mission, today we will report to you about the Shenzhou-13 manned mission and the progress in the construction of China's space station and answer your questions.

First, let me briefly review the Shenzhou-13 mission: On Oct.16, 2021, the Shenzhou-13 manned spacecraft took off from the Jiuquan Satellite Launch Center, and later docked with the space station core module. After the docking, the three astronauts entered the core module and began their stay in space. During the mission, the crew took care of and maintained the facilities and equipment of the space station as planned, performed extravehicular activities (EVAs) twice, conducted a number of scientific and technological experiments, and carried out a series of science popularization and education activities such as two "Tiangong Class" lectures. The crew of Shenzhou-13 stayed at the space station for a total of 183 days, setting a record for the country's longest single-flight space mission. At present, the trio are in good health and are recovering following their return to Earth at the China Astronaut Research and Training Center.

The construction of China's space station includes two phases, which are the key technology verification phase and construction phase, respectively, with six missions planned for each phase. Among them, the main objectives of the key technology verification phase is to make breakthroughs in and comprehensively master key technology related to the construction and operation of the space station. Since 2020, we have successfully carried out six missions: the maiden flight of the Long March 5B launch vehicle, the launch of the space station's Tianhe core module, the Shenzhou-12 and Shenzhou-13 manned spacecrafts, and the Tianzhou-2 and Tianzhou-3 cargo spacecrafts. All of the missions achieved complete success and accomplished the mission objectives in the key technology verification phase, laying a solid foundation for the construction phase.

Since the 18th National Congress of the Communist Party of China (CPC), the CPC Central Committee with Comrade Xi Jinping at its core has paid great attention to the manned space program. General Secretary Xi Jinping has visited the mission site many times to take command and cordially met representatives of the space scientists and engineers who participated in the research and experiment. The general secretary also took part in a "space-Earth" talk with the crew. All members of the program have always kept in mind the care, trust and expectations of General Secretary Xi Jinping, and made every effort to tackle key problems, overcome the impact of COVID-19 on the development, experiments and flight missions, and achieved consecutive victories. The implementation of the mission has received strong support and full participation from relevant ministries and commissions of the central and local governments at all levels, as well as relevant forces. Here, on behalf of the mission headquarters, I would like to express my heartfelt thanks to all sectors of society for their concern and support, and journalists for their attention and reports.

According to the mission arrangements, we will complete the construction of the China's orbital space station in 2022. A total of six missions are planned, which are as follows: in May, the Tianzhou-4 cargo spacecraft will be launched; in June, the Shenzhou-14 manned spacecraft carrying three astronauts will be launched and the crew will also stay in orbit for six months; in July, the Wentian lab module will be launched, followed in October by the Mengtian lab module. The three modules of the space station will form a T-shaped space station. Then, we will launch the Tianzhou-5 cargo spacecraft and the Shenzhou-15 manned spacecraft. The crew of Shenzhou-15 will also be composed of three astronauts. These three astronauts will take over from their Shenzhou-14 predecessors, living and working in orbit for six months.

The year 2022 will mark the decisive victory of the construction of the space station and the 30th anniversary of the initiation and implementation of China's manned space program. The construction of China's space station and national space laboratory is an essential objective in the "three-step" development strategy and an important sign of the country's enhanced strengths in aerospace and science and technology in general. We deeply understand our glorious mission and great responsibility while embarking on a new journey in a new era. Throughout the program, we will firmly implement General Secretary Xi Jinping's instructions and requirements, be meticulous with the preparation, organization, and implementation, and ensure that all tasks are completed successfully, thus paving the way for a successful 20th CPC National Congress. 

Now, we start taking questions. Thank you!

Shou Xiaoli:

Now we entered the Q&A part. Please state the news outlets you work for before raising a question.

China Media Group:

Mr. Hao, the astronauts successfully returned yesterday, and this marked the successful completion of the key technologies verification phase for the space station project. Can you please shed light on the achievements we have accomplished and where we are on completing the set targets?

Hao Chun:

Thank you for your questions. We just mentioned that the main goal in the key technologies verification phase was to realize comprehensive breakthroughs of key technologies in the construction and operation of the space station. We think that comprehensive breakthroughs in relevant key technologies have been realized by implementing six missions. We have achieved many results through the six missions, which I will lay out.

First, we have achieved comprehensive breakthroughs in key technologies of space station construction. For example, astronauts' long-term in-orbit stays used to be one month at the longest, but now the living support and work support technologies allow them to remain in orbit for three months or six months. It makes a huge difference. These technologies have been thoroughly verified and reached a new level. Many other technologies, such as regenerative environmental control and life support, driving mechanisms for large-scale flexible solar arrays, transfer of modules aided by robot arms, and rendezvous and docking by remote control of astronauts, have seen breakthroughs, solving technological difficulties for future space station construction. 

Second, we have improved organization and command system for conducting various missions. Since we started the space station project, the frequency of missions has stepped up, and five missions were conducted within six months last year, which posed new challenges for the organization and implementation of missions. To ensure successful organization and implementation of missions, we further improved the organization and command system. For example, we established the mechanism for emergency launching of manned spacecraft and the mechanism for astronauts' emergency return, and search and rescue. By improving the systems and mechanisms, we can ensure the efficient and smooth implementation of every launch to ensure the in-orbit safety of astronauts and the stable operation of the space station.  

Third, the operation and management system for manned spaceflight with Chinese characteristics was initially established. Hugely different from the discontinuous launchings and short-term in-orbit operations in the past, spacecraft were in long-term continuous operations after entering the space station period. Astronauts worked and lived for longer terms while staying in orbit. These required the ground team to fully monitor and deal with emergencies throughout the whole process and in all states. To meet the new requirements, we explored and formulated a new flight-control model that combines centralized and distributed functions and developed a distributed system for ground control. They were put into use after the space station's core module was launched into orbit and have stood the tests during practical operations. A solid foundation has been built for long-term in-orbit space station operation and management in the future. 

Fourth, high-level research results of space science and significant comprehensive benefits have been achieved. By utilizing experimental facilities for space science on the core module, we conducted scientific experiments, mainly containerless and high microgravity experiments, and accomplished many world-class achievements. We have insisted that the project's purpose is to serve the national economy and people's livelihoods, drive scientific and technological development, and boost comprehensive benefits. The manned missions of the Shenzhou series spacecraft carried a large number of seeds, including various characteristic plant seeds, experimental samples such as microorganisms and electronic components, and many experimental facilities and equipment for future development of aerospace technologies. We also carried out a series of science popularization and educational activities, including the "Tiangong classroom" space lecture activities, the exchange events that Chinese astronauts in space station Tiangong held a video chat with people in Beijing, Hong Kong and Macao, and a youth painting exhibition staged on the space station. We have reached rich results in both space science research and comprehensive benefits. 

In general, in the space station's key technology verification phase, we have made comprehensive breakthroughs and mastered the key technologies of space station construction, and fully verified the functions and performance of various systems for follow-up missions, as well as the coordination and compatibility between systems. We have also tested the project's ability to implement missions on a frequent and regular basis, and accumulated rich experience in operation and management, laying a solid foundation for the construction of the space station. Thank you.

Red Star News:

China's space station has a designed lifespan of 10 years. Ensuring the long lifespan of spaceflight products and their high reliability is a rigorous test for every system and even every component. The core module assembly of the space station has been in orbit for nearly a year. What is its current status? Has it reached its goal as expected? Among multiple eye-catching parts in the phase of verifying key technologies of the space station, the robot arm is the focus and the highlight. How do you evaluate its performance? Thank you.

Hao Chun:

The questions are of much concern to all of us. We'd like Mr. Yang Hong, the chief designer of the space station, to answer them. 

Yang Hong:

Thank you for your questions. After the successful return of the Shenzhou-13 manned spacecraft, the assembly of the Tianhe core module and Tianzhou-3 cargo spacecraft are currently in orbit and in normal operation, with stable in-orbit operation parameters.

The core module has been in orbit for nearly a year, and all missions have been carried out smoothly as planned. We completed the rendezvous and docking with two manned spacecraft and two cargo spacecraft, as well as the three-month in-orbit stay of the Shenzhou-12 crew and the six-month stay of the Shenzhou-13 crew. We also carried out a number of special missions, including extravehicular activities, the test using the robotic arm to reposition cargo spacecraft, and manual remote operations.

During this period, we carried out a number of key technology verifications, mainly including physical and chemical regenerative life support, control of large complex, and large flexible solar panel wings and driving technologies. The evaluation results are in line with expectations, and the current functional performance is better than in the designs. Here are some examples: during the in-orbit stay of the Shenzhou-12 and Shenzhou-13 crews, the regenerative life support system of the Tianhe core module provided a good environment for astronauts to meet their material metabolism needs in orbit. The system collects the moisture discharged by the astronauts into condensed water and recycles and reprocesses urine into drinking water and electrolytic oxygen, making the water recycling efficiency higher than 95%, and the water utilization efficiency more than 83%, both meeting the requirements of the index. This technology greatly reduces astronauts' need for drinking water and oxygen to be carried by cargo spacecraft. As for the large flexible solar panel wings and their power supply technology, since the launch of the core module last year, they have been supplying power for the core module and its complex. The evaluation shows that their power generation capacity has reached around 10 kilowatts – far beyond the expected design. They have provided adequate power supply for power-consuming missions, including extravehicular activities, rendezvous and docking, and the test using the robotic arm to reposition cargo spacecraft. 

Currently, we have successfully completed four extravehicular activities, covering the operations, installation, and maintenance of extravehicular electronics, machines, pipelines and other typical equipment. This proves that the whole spacewalk procedures and support systems, as well as space-ground collaboration meet the requirements, laying a solid foundation for astronauts to take care of, install and maintain the extravehicular facilities during the follow-up long-term operation period after the completion of the space station. At present, we are carrying out a capacity assessment to further tap the potential of the core module and make full and best use of it.

The robot arm played an important role during the whole key technology verification phase. It completed a number of key tasks, such as astronauts' extravehicular activities, transfer of cargo spacecraft, and extravehicular status inspection, with perfect performance throughout the whole process. Extravehicular operations by the robot arm prove its joint motion ability, terminal positioning accuracy and other functions meet design expectations. Its stiffness in operating loads indicates it is able to transfer large loads. We also obtained the kinematic model parameters of the robot arm while weightless in orbit. All of these have laid a solid foundation for future missions, such as using the robot arm to grab and transfer the lab modules and taking care of large extravehicular loads. In a word, we have completed the mission of the key technology verification phase for the core module of the space station and achieved expected goals. Thank you.

Reuters:

I have two questions. My first question is, will the COVID-19 outbreaks in China this year delay the completion of the space station by the end of 2022. And my second question is, how much has China spent on building the space station so far, and how much does China expect to spend in the coming months? Thanks. 

Hao Chun:

Since the outbreak of the COVID-19 pandemic in 2020, according to China's general arrangements, the whole project team has overcome many difficulties and taken many targeted and effective measures, and secured the support and coordination of relevant departments and local governments at all levels, so that we have managed to minimize the effect of the pandemic on the project. Currently, the research and the manufacturing of the project are proceeding as schedule, so the construction plan of the space station will not be delayed. 

The investment in planning and implementing the space station project has been generally moderate and in line with economic and social development of our country. In general, China's manned space project has blazed a sustainable development path with Chinese characteristics suitable to China's national conditions, with lower input, fast development, and fruitful results. 

Thank you.

The Beijing News:

In manned spaceflight, the tracking, telemetry, and command and communication systems are likened to an invisible kite string. In the verification period of the space station's key technologies, the space station was larger and the system more complicated. How can we accurately track, telemeter, and guide the space station into the right orbit and ensure its secure and stable operation? Thank you.

Hao Chun:

Let's invite Mr. Sun to answer this question. 

Sun Jun:

Thank you for your question. Over the past two years, our task mainly involved the assembly of the space station. Since last year, with the practice and technologies we gained during the five tasks of testing and verifying the key technologies needed for the construction of the space station, we have made breakthroughs in several flight control technologies, including its rapid rendezvous and docking modes, separation and returning, automatic task planning, complicated spacecraft accurate orbiting, forecasting, and robot arm remote control. We have developed a domestically constructed stable flight-control system platform as well as a set of systems for flight control management of the in-orbit space station with Chinese characteristics. It can be said that we have grasped and initially verified core flight control technologies in the assembly of the space station, which will provide a solid guarantee for the successful in-orbit assembly of the space station this year.

While pushing forward assembly and construction tasks, we have continued to improve the efficiency of the space station's in-orbit operation, optimize the space station's long-term organization and management model, and the support model for in-orbit astronauts. We have promoted automatic and intelligent technologies in the flight control system and expanded and improved the application and experiment models of space science so as to comprehensively enhance the in-orbit performance of the space station and give better play to the role of the large-scale space science experiment platform.

The Shenzhou-13 flight crew set a record in terms of the orbital stay of China's astronauts. In the future, Chinese space stations and astronauts will continue extended in-orbit flights. According to the planning of the project tasks and demands for science experiments, our center is in charge of the organization, arrangement, and implementation of the space station's long-term operation control. We have taken various measures to ensure the secure and stable in-orbit operation of the space station and the astronauts' health.

First, we constructed a complete ground verification system. We delicately designed the space station assembly plan and key flight control plans for in-orbit management. We made more than 3,000 fault pre-plans and constructed a full-loop ground verification environment that allowed communication among spacecraft, the tracking and command network, and the tracking and command center. We organized staff to conduct a full-course coordination rehearsal and comprehensively verified flight control plans, flight control systems, and performance in normal and emergent conditions so as to ensure the security and reliability of the flight control. 

Second, we conducted strict organization and command. Following the principle of "unified command, professional support" in major and core control phases, we organized experts of all fields to provide professional and technical support on the flight control site. In the operation of the robot arm, extravehicular activities of astronauts, and other complex space science experiments, we arranged for multiple systems from space and the ground to coordinate and cooperate closely. We supervised, studied, and judged the situations with close attention, made decisions and arrangements on-site with science-based approaches in conducting major control tasks, and ensured the successful implementation of all tasks.

Third, precise monitoring and control. Beijing Aerospace Control Center deployed the land-sea-space telemetry, tracking and command network, mainly composed of relay satellites, to conduct large-scale measurement and control of the space station and effectively monitor the space station for each lap. In addition, we established an automated flight control system, which can conduct automatic planning and execution of in-orbit flight events, use the digital space station for auxiliary health management, conduct intelligent fault diagnosis, conduct regular check-ups for the space station to assess the overall health status, carry out timely and effective disposal of abnormal situations, and carry out regular emergency exercises such as the emergency evacuation of astronauts to hold the bottom line of safety firmly. 

Fourth, we properly handled space security risks. We conducted full-time monitoring of space station equipment and the health status of astronauts, enhanced monitoring and early warning of the space environment and collisions of space objects, and took necessary avoidance measures. Since February this year, the space station's orbit has been released to the world for collision warning calculations by space entities around the world. I would like to express my heartfelt thanks to our foreign counterparts for building a harmonious and safe environment for China's space station. Thank you. 

Southern Metropolis Daily:

The six-month mission of the Shenzhou-13 crew has refreshed the record of flight duration of Chinese astronauts on a single task. What tests did the Shenzhou-13 crew survive during the mission? Are our targeted support systems in place? How about the physical condition of the three astronauts after their return? Thank you. 

Hao Chun:

Let's invite Ms. Huang to answer your questions. 

Huang Weifen:

Thanks for your questions. The Shenzhou-13 crew lived and worked in the space station for 183 days, completed various tasks, and set many records. For example, they carried out two extravehicular activities, gave two science lectures, conducted manual rendezvous and docking tests, and performed other more than 40 in-orbit experiments and tests in the fields of aerospace medicine, aerospace psychology, space ergonomics, and space material science as well as over 80 items of in-orbit data collection and analysis. In addition, the Shenzhou-13 crew also conducted a large number of inspection tests of the station assembly platform, equipment maintenance and care and management of materials and the space station, conducted health monitoring, in-orbit protection exercises, training, and drills, recorded a large number of science education videos, took a lot of photos and recorded a large number of videos, and obtained valuable and rich materials.

Generally speaking, the three astronauts maintained good physical and mental conditions during the mission. They cooperated very well, worked in a tight and orderly manner, lived a rich and colorful life, and successfully completed various tasks. They have stood the test of body and mind and the ability to accomplish tasks. They have returned to the Space City in Beijing and are carrying out recovery work as planned, and they are in good physical and mental condition.

The Shenzhou-13 crew spent six months in orbit for the first time, a new challenge for the China manned spacecraft program's astronaut system. According to the characteristics of the mission, on the one hand, the astronauts carried out targeted intensive training before their flight, including physical fitness training, psychological adjustment training, and intensive training involved in emergency handling ability and extravehicular activity. Personalized health protection measures were also improved. On the other hand, supporting measures for astronauts' stay in the space station were enhanced based on the Shenzhou-12 mission. 

In terms of health protection, personalized in-orbit health protection measures have been improved, increasing the supply of relevant medicine and diagnostic and treatment equipment. Weightlessness protection exercise measures have been improved, increasing convenience and enjoyment. Personalized exercise regimens have been made to strengthen dynamic assessment and adjustment, enhance endurance and cardiovascular reserves, improve cardiopulmonary functions, strengthen exercises of core muscles such as back, neck, and lower limb strength, and promote the continuous improvement of gravity readjustment ability. The supply of fresh fruit and vegetables has been increased, and personalized electrolyte drinks have been provided to improve nutritional support. Methods of in-orbit psychological support were also diversified. 

In terms of ensuring lives, in response to the more extended stay in the space station, the supply of food and water was increased, outfits were diversified, and the allocation of articles of daily use and hygiene supplies was optimized. In addition, according to the individual characteristics and needs, more in-orbit entertainment items were added. 

In terms of work support, we have further standardized the astronaut in-orbit work system, work-rest schedule and duty system, and revised the astronaut flight manual, strengthening measures such as dynamic adjustment and update of flight plans and timely assessment. We have also optimized the EVA procedures, support mode and collaborative procedures to improve efficiency.

Generally speaking, the success of the Shenzhou-13 manned mission further confirms that China's astronaut selection and training techniques are scientific and effective, and that China is fully capable of providing support for astronauts' long-term in-orbit stays, which provides a foundation for follow-up missions and accumulates more abundant and valuable experience. Thank you.

TASS:

China's space station has established cooperation with around 20 countries, including Russia. China expects to complete the building of its space station by the end of this year and to put it into operation next year. Will the international cooperation on the space station go smoothly amid the complex international situation? Will there be any obstacles or problems in this regard? What are your expectations or concerns? Thank you.

Hao Chun:

Exploring the unknown universe and developing space technology are a common cause of humanity, which requires the concerted effort of all nations. Throughout the development of manned spaceflight, international cooperation is also a historical trend that promotes continuous progress toward a higher level. China has been upholding the principles of peaceful utilization, equality, mutual benefits and shared development in its development of manned spaceflight. It has signed space cooperation agreements with many countries and international organizations, carried out a series of cooperation and exchanges, and implemented a range of cooperation programs, yielding fruitful research results. We will certainly keep acting under the guidance of the principles and carry out more in-depth exchanges and cooperation with countries committed to the use of outer space for peaceful purpose. We hope to make China's space station a platform which promotes the building of a community with shared future for mankind. We would like to work with astronauts and teams of space scientists all over the world to explore the vast universe and bring more benefits to humanity. Thank you.

Phoenix Satellite Television:

Mr. Hao just mentioned that the Wentian and Mengtian lab modules will be sent into space later this year in July and November, and the in orbit construction of the space station will be finished then. How is work on the two lab modules currently progressing? What roles will they play in the future? Thank you.

Yang Hong:

Thank you for your questions. After the construction of the space station is completed, the two lab modules will become the central working area for astronauts in orbit. Astronauts can carry out intravehicular and extravehicular scientific and technological experiments in the two modules, both of which are equipped with experiment cabinets and an installation platform for extravehicular payloads, together with information support, as well as power supply and heat dissipation. In the two lab modules, astronauts will be able to conduct research into space science, space materials, space medicine and space exploration.

Next, let me briefly introduce the two lab modules. The Wentian lab module is equipped with the same living facilities as the Tianhe core module, including three sleeping areas, a toilet and a kitchen, ensuring the basic living requirements of astronauts. Wentian and Tianhe can support six astronauts living in space during the shift rotations of two spacecraft crews. A small mechanical arm is installed on the Wentian lab module. This can be used either alone or along with the larger robotic arm on the Tianhe core module to assist astronauts in tasks including EVAs, extravehicular facility maintenance and patrol inspections. Additionally, an airlock cabin in the Wentian lab module will serve as the main exit-entry point for EVAs once the construction of the space station is completed. The node cabin in the Tianhe core module will then serve as a backup. The Wentian lab module can also serve as a backup for the management and control of the space station complex in the case of a malfunction in the Tianhe core module, thereby increasing the overall reliability of the space station.

The Mengtian lab module is equipped with a cargo airlock cabin and a deployed extravehicular platform. In the future, the scientific equipment that needs to be installed outside the module will first be sent to the space station by cargo craft, then transferred outside through the cargo airlock cabin, and then installed on the extravehicular platform by mechanical arms or astronauts. In this way, the extravehicular research projects can be updated continuously. 

So far, the development of the Wentian and Mengtian lab modules is going smoothly on the ground. The Wentian lab module has completed the entire module integrated assembly, testing, and large-scale experimental work in Tianjin, and is ready for launch. The Mengtian lab module has completed part of its integrated assembly and experimental work, and is currently undergoing on-the-ground testing. Further experimental work such as thermal testing of the entire module and return testing will be completed as planned. Thank you.

Guangming Daily:

What achievements have been made to the space application system during the key technology verification phase of the space station? In addition, the Wentian and Mengtian lab modules will launch this year. What arrangements will be made for the space application system, and what achievements can be expected?

Zhong Hong'en:

Thank you for your questions. The core module has been operating in orbit for nearly one year, and the newly developed payloads of the space application system have been working stably and in good condition in orbit. The payloads are coordinated and matched with interfaces of relevant systems, and a large number of scientific experimental data and samples have been collected. We have made fruitful achievements mainly in the following aspects.

First, the scheme of the space-ground integrated system – a new-generation application mission – has been verified, including a globally advanced scheme that supports in-orbit sharing, a construction scheme of large-scale scientific research facilities, and a space-ground supporting scheme for low-latency broadband applications. These have laid a solid technical foundation for the in-orbit construction of application missions for the two lab modules.

Second, for the first time, China has in-orbit access to an advanced-communication-protocol-based optical fiber communication network. This highly reliable, wide-bandwidth network, with a large-capacity distributed storage system, is capable of computing at high speed in orbit. We have made breakthroughs in key technologies such as the globally advanced mechanical, electrical, and thermal integration of scientific experiment cabinets and created high-level supporting conditions for in-orbit application sharing.

Third, the container-free experiment cabinet has become China's first and the world's second research facility of its kind to work in orbit. Compared with other countries, this cabinet has higher-standard indicators and stronger capacities and has successfully completed experiments involving multiple material sample types and batches. Its heating temperature can reach above 2,000 degrees Celsius. It has discovered a variety of new phenomena and is undertaking in-depth scientific research on collected samples.

Fourth, for the first time, we have used our high-quality microgravity experiment cabinet to offset the influence of air disturbances and platform vibrations with air spray and magnetic levitation techniques. This achievement means that, with this cabinet, we can conduct microgravity experiments that are two to three orders higher in magnitude than that of the space station platform. We have achieved the world-leading microgravity level of 1E-7g for the first time and have the conditions to support and carry out frontier research such as those related to relativity theory and gravitational physics.

Fifth, for the first time, we have achieved telescience experiment ability, enabling the space-earth round-trip time with a delay of less than two seconds. We have established advanced digital twin models and a new experimental mode comparing objects with images, which has efficiently supported the in-orbit scientific experiments.

Next, the space application system will carry out in-depth container-free material science and high-quality microgravity experiments in accordance with its core module missions. We will successively complete the delivery, test launch, and in-orbit testing of the payloads of the two lab modules and complete the construction mission as planned. 

A total of 14 high-level scientific experiment cabinets of the space application system have been installed inside the modules of the space station, with each cabinet serving as a miniature space lab. On the outside of the space station's modules, we have deployed three large payload hanging points and two experimental exposure platforms along with flagship research facilities such as the Xuntian space telescope, which will fly in the same orbit as the space station. All of these will support the development of nearly 100 research programs and thousands of scientific research projects in multiple fields, such as space life science, microgravity physics, and space astronomy, as well as earth sciences, new space technologies, and applications. Major discoveries are expected regarding fundamental and cutting-edge scientific issues such as the origin and evolution of the universe and celestial bodies, material structure, and the origin of life. Scientific breakthroughs can also be expected in key research directions such as basic physics, space life science, space materials science, microgravity fluid physics, and combustion science. All these will help promote China's space science research and applications to reach a world-leading level. Thank you.

Xinhua News Agency:

With the completion of the verification stage of the key technologies of the space station, the project has officially entered the construction stage. Could you please share with us what is to be expected for the manned space flight project after the complete construction of China's space station? Thank you.

Hao Chun:

Thank you for your concern for the future development of the project. After the in-orbit construction of the space station this year, the project will proceed to its application and development stage, which will last more than a decade. Our preliminary plan is to launch two manned spacecraft and two cargo spacecraft every year. The astronauts will stay a long time in orbit to conduct scientific space experiments and technology tests and take care of the space station. In a bid to further improve the comprehensive abilities and technological level of the project, we will develop a new generation of manned carrier rockets and manned spacecraft, and the new-generation carrier rockets and the return capsule of the new-generation manned spacecraft will be reusable. The comprehensive abilities of the new generation of manned spacecraft will be greatly enhanced as it will be able to take up to seven astronauts with stronger ascending and descending payload capacity. Meanwhile, we are thinking of expanding the module of the space station in a bid to further support in-orbit scientific experiments and provide better working and living conditions for the astronauts. 

Additionally, during the application and development stage, we will use the laboratory cabinets inside of the module and large payload facilities outside of the module to conduct larger-scale space research experiments and new technology tests, which will mainly be in such fields as space life-science and human body research, microgravity physics science, and space astronomy and geoscience. Notably, next year, we plan to launch China's first large space survey telescope to conduct wide-area space surveys and undertake cutting-edge scientific research in the formation and evolution of the cosmic structure, dark matter and dark energy, exoplanets and solar bodies, and so on. We are looking forward to a batch of major innovative results.

Also, we will actively explore the commercial development model of manned spaceflight and introduce social forces to participate in the construction, operation, and maintenance of the space station in order to constantly improve its comprehensive benefits and promote the high-quality development of China's manned spaceflight engineering.

Throughout the development history of manned spaceflight around the world, the moon has always been a favored place for manned spaceflight to move towards deep space. China's manned spaceflight project will move from near-earth to earth-moon space and then to deeper space. In the process of building the space station, we have also strived to make key technological breakthroughs and conducted studies and research on the plan for a manned lunar probe. I believe that the millennia-long romantic dream of the Chinese nation for a trip to the moon represented by the tales of Chang'e and others will become reality in the near future. 

Thank you.

CGTN:

After the successful return of the Shenzhou-13 crew, there is growing anticipation toward the following manned spaceflight missions. It is understood that there are two batches of six astronauts to carry out missions this year. I would like to ask, what are the missions of the Shenzhou-14 and Shenzhou-15 space crews, and what preparations have been completed? Thank you.

Huang Weifen:

Thank you for your questions. According to the task arrangement during the construction stage, the crews for the two manned missions have been selected. At present, the crews of Shenzhou-14 and Shenzhou-15 are in good condition and are actively carrying out relevant training and mission preparations.

Both crews will stay in orbit for six months, and they will for the first time rotate in orbit to realize uninterrupted manned residence. The two crews, totaling six astronauts, will live together in orbit for five to 10 days, which will bring more serious challenges to the astronaut system.

The Shenzhou-14 crew will cooperate with ground control to complete the assembly and construction of the space station and gradually develop it from a single-module space station into a three-module combination. In this process, nine assembly formations, five rendezvous and docking missions, three separation and evacuations, and two transposition missions will be undertaken. They will enter the Wentian and Mengtian lab modules for the first time to build a manned environment. They will also cooperate with ground control to carry out tests on the two-module complex, the three-module complex, the station's large and small mechanical arms, and the exit function of the airlock cabin in the lab modules. They will use the airlock cabin to carry out extravehicular activities for the first time and complete the unlocking and assembly of the 14 cabinets in the Wentian and Mengtian lab modules. The Shenzhou-15 crew will also carry out several extravehicular activities; assemble, test, and debug the payloads inside modules; and control the mechanical arms to install extravehicular payloads. They will also operate, manage, and maintain the largest complex composed of three modules and three spacecraft. The two crews will undertake science popularization and other public activities, in-orbit scientific research experiments and engineering technology tests, and will collect flight mission data. They will also carry out in-orbit health monitoring, protective exercises, in-orbit training and drills, station platform inspections and tests, equipment maintenance, and station and material management.

Based on the characteristics of the missions in the construction stage, the astronaut system has designed and implemented more than 200 training programs in eight categories in accordance with the principle of "strict and demanding training under combat conditions and integrating tests with training." By doing so, we aim to prepare our astronauts for missions in various aspects of mind, body, psychology, knowledge, and operation skills. On the basis of comprehensive and systematic training, we have intensified efforts in the following aspects:  

First, we have carried out intensive training for the setting of the Wentian and Mengtian lab modules when astronauts first enter them, as well as the operation management, equipment operation, maintenance and repair, material management, and station management of various combination configurations.  

Second, to prepare for missions such as robot arm verification and extravehicular activities through the airlock, we have completed training in robot arm operation, extravehicular activity procedures, coordinated cooperation, weightlessness simulation and low-pressure environment, among others.

Third, we have enhanced the training in malfunction emergency response and the rendezvous and docking of the lab modules through remote control and manual operation.  

Fourth, we have strengthened physical and strength training, psychological adjustment training, and supporting skills training for in-orbit health, life, and work stay.  

Fifth, we have finished dozens of training programs concerning space experiments, tests and platform operation.  

Sixth, relevant astronauts have participated in nearly 100 engineering development tests, such as the man-ship combined test, man-station combined test, and ergonomics evaluation test, and been deeply involved in the writing of the flight manual and plan. While giving full play to the role of astronauts, we have constantly improved their comprehensive capabilities under combat conditions.  

In addition, personalized training and personalized health security work have been reinforced. Multiple arrangements have been made for the Shenzhou-14 and Shenzhou-15 crews to communicate with the crews of Shenzhou-12 and Shenzhou-13. On the basis of the Shenzhou-13 mission, we have further improved the supporting measures for astronauts' long-term in-orbit stay so as to ensure that they can live healthily and work efficiently in orbit, and complete their missions successfully. Thank you.

Cover News:

After 30 years of development of China's manned space program, the Tiangong space station will finish its construction this year and begin large-scale application. What role will the achievements in space technologies and experiments play in improving people's well-being? Thank you.

Hao Chun:  

The manned space program is a lofty but practical cause. Through its development, we can also promote the upgrading of relevant industries and advance economic and social development, which are closely related to the national economy and people's livelihood. I think this is mainly reflected in the following aspects:  

The first is to promote scientific and technological development. The manned space program is a scientific and technological activity involving the most complex system, the most intensive technology, and the most active innovation. As sci-tech achievements continue to emerge in the process, they will be directly applied to various fields related to the national economy and people's livelihood. For example, relevant technologies, such as the space liquid rocket engine's combustion and heat transfer system control, can drive the upgrading of pulverized coal pressurized gasification industry, help solve the problem of domestic waste disposal, and effectively improve the efficiency of hydrogen cells. In addition, technologies related to such fields as control, measurement, image processing, and components involved in the development of rockets, spacecraft, the space station, and other aircrafts can help upgrade the industrial intelligent control system. The heat-resistant base technology of the manned spacecraft has been used to make heat insulation materials for civil use. The just-concluded Beijing 2022 Winter Olympics applied a host of space technology outcomes to the opening ceremonies, the closing ceremonies, and the athletes' training equipment, among other areas. 

The second is to serve economic growth. Over the past 30 years, preliminary statistics show that more than 4,000 technological achievements of China's manned space program have been widely applied across diverse industries in the national economy, driving technological and technique innovation as well as industrial upgrading in raw materials, microelectronics, machinery manufacturing, communication, and the seed industry, among others. For instance, according to preliminary estimates, space breeding technology has not only promoted crop improvement, but has also been widely used in food processing, bacteria cultivation, biomedicine, and other fields, which has generated direct economic benefits of more than 200 billion yuan so far, and contributed to food security and ecological protection. 

The third is to improve people's livelihood. As you all know, some of the convenience food and daily necessities like diapers that we are so familiar with all came from the transformation of manned space technologies. Nowadays, more space technologies will be applied for civil use. For example, space protein crystallization is being researched to develop new drugs to fight against osteoporosis and muscular dystrophy. Furthermore, the manned space environmental control and life support technology, microgravity combustion mechanism research, and new materials research can also be translated and applied in various fields related to people's livelihood and deliver more benefits.  

In the future, many scientific experiments and new technology tests in such fields as space life science, space material science, microgravity fluid physics, space technology, and space medicine will be conducted in China's space station, which is expected to make major achievements and breakthroughs in scientific exploration and applied research. At the same time, we believe that more relevant technologies will be transformed to serve social and economic development, the national economy, and people's livelihood.  

Thank you.

Shou Xiaoli:

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

Translated and edited by Wang Yiming, Wang Qian, Liu Sitong, Wang Yanfang, Duan Yaying, Zhang Junmian, Liu Jianing, He Shan, Yang Xi, Yuan Fang, Xu Kailin, Li Huiru, Zhou Jing, Qin Qi, Xu Xiaoxuan, Chen Xia, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Wang Hesheng, vice minister of the National Health Commission (NHC) and administrator of the National Administration of Disease Control and Prevention 

Zeng Yixin, vice minister of the NHC

Jiao Yahui, director of the Bureau of Medical Administration of the NHC

Chairperson:

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

Date:

March 18, 2022

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). To implement the major directives of the Central Committee of the Communist Party of China (CPC) on COVID-19 prevention and control, today the SCIO is holding a press conference on the rigorous COVID-19 response, and we will also answer your questions. We are joined by Mr. Wang Hesheng, vice minister of the National Health Commission (NHC) and administrator of the National Administration of Disease Control and Prevention; Mr. Zeng Yixin, vice minister of the NHC; and Ms. Jiao Yahui, director of the Bureau of Medical Administration of the NHC. 

Now, I will give the floor to Mr. Wang Hesheng.

Wang Hesheng:

Friends from the media, good afternoon. Thank you for your interest in and support for the COVID-19 prevention and control work. First, I will introduce the current priorities of the COVID-19 response, and then my colleagues and I will take your questions.

The CPC Central Committee and the State Council attach great importance to COVID-19 prevention and control. General Secretary Xi Jinping has taken personal command, planned the response, and made a series of important instructions. He has emphasized adherence to the overall strategy of "preventing inbound cases and domestic resurgence" and the dynamic zero-COVID approach, as well as the need to coordinate the COVID-19 response with economic and social development.

Yesterday, on March 17, General Secretary Xi Jinping presided over a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee to analyze the latest COVID-19 developments and arrange for better and more stringent epidemic control measures. General Secretary Xi Jinping emphasized that victory comes from perseverance, and all local authorities and government departments must be fully aware of the complex, arduous and enduring nature of COVID-19 control both at home and abroad, further social mobilization, build consensus, proceed with greater confidence and perseverance, and carry out all the epidemic control work in a more solid and meticulous manner. He emphasized the need to always put people and their lives first, adhere to the dynamic zero-COVID approach with science-based and targeted measures, and contain the spread of the virus as soon as possible. He said that efforts must be taken to make the epidemic response more science-based and targeted and keep optimizing the response measures. He also called for maintaining strategic focus, pursuing progress while ensuring stability, coordinating the COVID-19 response with economic and social development, adopting more effective measures, striving to achieve the best results in epidemic control with minimum costs, and minimizing the epidemic's impact on the economic and social development.

The NHC and the National Administration of Disease Control and Prevention have been earnestly implementing General Secretary Xi Jinping's important instructions. In response to multiple local case clusters in parts of China, we have worked with relevant authorities to strengthen guidance for key regions. We have worked to ensure "early detection, reporting, isolation and treatment," implement stringent epidemic prevention and control, and resolutely take more effective and targeted measures. These steps are aimed at suppressing local outbreaks as soon as possible and providing an enabling environment for people's lives and economic and social development.

First, we have worked swiftly on the emergency COVID-19 response. Recently, China has seen cluster infections spreading widely and occurring frequently in multiple regions. The comprehensive working group under the State Council's inter-agency task force immediately sent national working groups to provinces including Jilin, Shandong, Guangdong and Heilongjiang to guide their COVID-19 response. The groups worked with local authorities to assess the COVID-19 situation, develop response measures, accelerate screening through nucleic acid testing, investigations and regional checks, ensure "early detection, reporting, isolation and treatment," provide the best possible treatment for patients, and curb the spread of the virus.

Second, we have consolidated the defense line against inbound infections. We worked to ensure sound prevention for people, objects and environments, tighten personnel management at points of entry, implement strict closed-loop management, and increase the frequency of nucleic acid tests; guard against risks from imported cold-chain food and high-risk non-cold-chain objects; step up the management of border areas and points of entry, and intensify the crackdown on illegal entries and exits. We worked vigorously with our land neighbors to build a joint prevention and control mechanism and ensure sound epidemic prevention and customs clearance for cargo at border areas.

Third, we have increased capacity for preventing, controlling and handling infections. We improved COVID-19 response plans on monitoring, epidemiological investigation, quarantine for medical observation, community (village)-based epidemic prevention and control, sample collection and testing. We worked to ensure those who test positive are reported and investigated immediately and control measures are taken before screening. We regulated work on the screening of people at risk, the management of close contacts, and identification of risk areas. We attached equal importance to both traditional Chinese medicine and Western medicine and provided standard and regulated treatment. We worked to guarantee the implementation of the first consultation responsibility system and strengthen prevention of hospital-acquired infections. We carried out record-based management of more than 7,000 fever clinics and over 800 designated hospitals. We also enhanced our testing capacity, with national testing capacity reaching over 40 million samples per day.

Fourth, we work hard to implement vaccination programs. In line with the plans of the State Council joint prevention and control mechanism, we have guided local authorities to step up COVID-19 vaccination and booster vaccination efforts in a proactive, prudent, and orderly manner and further raise the overall vaccination rates.

Our achievements in epidemic prevention and control are not easily attained, and it is important to fully recognize their value. Next, we will work together with relevant departments to fully implement the decisions and plans of the CPC Central Committee and the State Council and further step up our efforts in key epidemic control tasks.

First, we will bring local cluster infections under control as soon as possible. We will guide key regions to accelerate nucleic acid testing and speed up identification, epidemiological investigation, and management of at-risk groups so as to achieve dynamic zero-COVID in communities as soon as possible.

Second, we will reinforce the line of defense against imported cases. We will adopt remote prevention and control measures on inbound arrivals, prioritize close-loop management, and expand monitoring coverage of key groups. We will also see that special working teams at port-of-entry areas fulfill their responsibilities for COVID-19 control by stepping up patrols along river banks and coastlines and strengthening the deployment of anti-epidemic personnel.

Third, we will strengthen routine epidemic control and management in key places and key regions. Guidance will be given to schools, nursing homes, detention centers, passenger terminals, shopping malls, supermarkets, and other key venues and densely populated places, as well as cold-chain workers, shopping mall and supermarket staff, logistics workers, and people from other key sectors, for them to strictly implement anti-epidemic measures. 

Fourth, we will make the epidemic response more science-based and targeted. We will strictly implement pre-examination triage, and the first consultation responsibility system. We will also improve the mechanism for issuing early warnings through multiple channels and promote a monitoring model that uses antigen testing for earlier detection and the nucleic acid test for diagnosis. Guidance will be given to local authorities to ensure that their epidemic control work will be more science-based and targeted, minimizing the epidemic's impact on economic and social development.

That's all for my introduction. Thank you.

Shou Xiaoli:

Thank you for your introduction, Mr. Wang. Let's move on to the question-and-answer session. Please identify the media outlet you represent before asking a question. Now the floor is open for questions.

China Media Group:

The recent infections feature outbreaks in multiple regions, a wide spread of the virus, and a large number of confirmed cases. What is your assessment of this round of infections? What features have you found from virus origin tracing? What do you think is the reason for the recent resurgence? Thank you.

Wang Hesheng:

Thank you. Now I will answer your questions. Just as you said, we have indeed seen recent infections spreading widely and occurring frequently in multiple regions. There are four main reasons: 

First, since December 2021, the world has witnessed the fourth pandemic peak of COVID-19, which has lasted for 11 consecutive weeks up to now, with more than 10 million cases reported each week. These figures show that the world is still at a pandemic peak. Since the start of this year, in particular, the virus has spread rapidly in our neighboring countries and regions, producing an increasing "pressure difference" in COVID-19 spread between China and its neighbors. In the first two months of this year, the average number of daily imported infections reached 91 cases, far more than 22 cases in 2020 and 32 cases in 2021. In March 2022, the average number of daily imported infections exceeded 200, with the highest daily number exceeding 300 cases. All these indicate a significant increase in the pressure caused by the recently imported infections.

Second, the Omicron variant of the coronavirus that is now dominant worldwide, especially the Omicron BA.2 sub-variant, is more contagious and less detectable than other strains. So this makes it harder to detect the virus at an early stage. When discovered, the Omicron variant may have already spread to a wide area. And this means that it has become more difficult for us to handle and control the coronavirus.

Third, in late February, Spring Festival ended, the spring semester began, and companies and workers resumed normal work, which brought a massive flow of population. And there was also an increase in gatherings, such as meetings, training activities, weddings, and funerals. All of these have magnified and amplified the spread of COVID-19, leading to the fast spread of coronavirus and even the transmission across regions.

Fourth, some may think the Omicron variant appears to have relatively mild symptoms and is no different from the flu, then they relax their vigilance in guarding against the coronavirus and are not fully prepared to respond to COVID-19, lowering requirements for regular containment measures and emergency responses. 

According to analyses and assessments by experts, this wave of global COVID-19 outbreak is still at a high level and will not come to an end soon. China will continue to face a situation where Omicron-dominated infections may occur in multiple locations simultaneously. It means that epidemic prevention and control will be even more serious and complex.

Epidemiological tracing results also show that the recent cluster infections in multiple regions of China were all caused by inbound cases. In addition, most of the people infected with the Omicron variant present mild symptoms or are asymptomatic, so it is hard to detect the source of the virus and the means of transmission vary significantly. We have discovered multiple transmission routes in different regions and found the source of the coronavirus diverse and complex. This brings huge challenges to the epidemiological tracing work and COVID-19 response.

The characteristics of this wave of the coronavirus outbreak require us to further increase sensitivity in our monitoring and early warning efforts, improve the multi-point trigger mechanism for monitoring, and effectively improve our capacity to detect the coronavirus at an early stage. Thanks. 

Kyodo News:

We know that China's dynamic zero-COVID policy has been successful. However, the recent COVID-19 containment measures may restrict China's manufacturing sector and consumption and make it difficult to communicate with the overseas market, which triggers worries from foreign-invested enterprises. Will the dynamic zero-COVID policy see any changes in the first half of this year? Thanks. 

Wang Hesheng:

Thank you, I will answer your question. Since the outbreaks, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China has always put people's lives and health first. We have strengthened our COVID-19 response on all fronts, which delivered outstanding performance and protected the safety and health of the public to the utmost. 

The dynamic zero-COVID approach was put forward under the principle of preventing the coronavirus from entering the country and stemming its domestic resurgence, and is based on summarizing our experiences and learning from lessons. The approach requires us to detect cases at an early stage, contain small outbreaks, and focus on work at a primary level so as to improve our COVID-19 response and our capacity to detect COVID-19 cases early. We act swiftly to detect the people infected and outbreaks at an early stage. When discovered, we take immediate actions to cut off virus transmission so as to reduce infections and achieve dynamic zero infection. The goal of the dynamic zero-COVID approach is to bring the epidemic under control in the shortest possible time with a minimum cost to society. The essence of the approach is to act swiftly and take targeted measures to prevent and control the coronavirus. When we say "act swiftly," we mean to detect and handle the virus rapidly and cut off its transmission quickly. When we say "targeted measures," we mean that the measures are put in place throughout all links, including epidemiological tracing, quarantine, community-level disease prevention and control, and clinical treatment.

We should be aware that China has well balanced COVID-19 prevention and control and its economic and social development. The country has become the world's only major economy to register positive growth. This progress did not come easily. It has been proven that China's practice in responding to COVID-19 has safeguarded people's lives and health and ensured economic growth. 

In fact, COVID-19 has affected the economic and social development of all countries across the world to different degrees. But the results of different COVID-19 response strategies and measures may vary in easing and controlling those negative impacts. When assessing the impact on the economy or the cost of prevention and control measures, we should figure out what kind of impacts are caused by COVID-19 itself, what is brought by economic development, and what impacts the COVID-19 response strategy and containment measures will have. I don't think we can solely owe the economic impacts to the COVID-19 response strategy and epidemic prevention and control measures.

Second, when assessing the cost and effect of COVID-19 response measures, we should take a scientific approach. They can be assessed in four dimensions.

The first is the cost and result of prevention and control; that is, how much cost is spent, how many infections, severe cases and deaths are reduced. I think the prevention and control concept of our Party and government is that people come first, life comes first, and that we must protect the lives and health of the people to the greatest extent possible. Therefore, we can see that the total number of infected individuals, the number of cases, the number of severe cases, and the number of deaths in China are very small, which shows that the cost-effectiveness ratio of prevention and control in China is high.

The second is cost-efficiency; that is, the speed with which the pandemic can be contained and extinguished. China's prevention and control work is basically within the one or two longest incubation periods to quickly deal with and quickly extinguish the pandemic, which shows that the cost-efficiency ratio is high.

The third is cost-utility; that is, through the dynamic zero-COVID approach and precise prevention and control. China has ensured the normal production and life of the vast majority of regions and people, reducing inconveniences caused by the pandemic and even reducing psychological and other health problems. This shows that, by limiting the normal activities of a very small portion of people and controlling the population movements within a very small part of the country, we ensured the normal production and life of the broadest areas and people.

The fourth is cost-benefit; that is, the economic benefits achieved at the cost of prevention and control. In this regard, the key is to look at the big picture and do not only focus on the current situation. It is neither comprehensive nor objective to calculate cost-benefit only based on the costs incurred at the location and time of an outbreak. We should take the entire country as a whole and consider the general benefits to the entire economy, the entire society and the overall well-being of the people.

Facts have proven that the practice of the dynamic zero-COVID approach is in line with China's national conditions and scientific laws. The approach is correct and the result is good. Although the prevention and control measures of the dynamic zero-COVID approach will have some impacts on production and life in some areas, these impacts are short-term and limited in scope. We should say, any prevention and control measures will have certain costs, but for protecting people's lives and health, these costs are worth it. Here I would like to express my special thanks to our broad masses of the people for their understanding, support, and cooperation with the pandemic prevention work.

China's anti-pandemic practice shows that adhering to the dynamic zero-COVID approach is the current pandemic defense line that we as a great country with a population of more than 1.4 billion must guard. This is our best way to embody the idea of "people first" and "life first". This is also the biggest contribution to the international fight against the pandemic. Thank you.

Southern Metropolis Daily:

What is the current progress of vaccination in China? What is the difference between sequential booster immunizations using vaccines from different technical routes and homologous booster immunizations using vaccines from the same technical route? What is the next step for implementation? Thank you.

Wang Hesheng:

We'd like Mr. Zeng Yixin to answer these questions.

Zeng Yixin:

Thank you for your interest in vaccinations. According to the decision-making and deployment of the CPC Central Committee and the State Council, and the unified arrangements of the Joint Prevention and Control Mechanism of the State Council, all parts of the country are steadily and orderly advancing the vaccination of the COVID-19 vaccines. As of March 17, China has reported more than 3.21 billion doses of vaccinations and the total number of people vaccinated is more than 1.27 billion, among whom more than 1.24 billion people have completed the full course of vaccination, accounting for 87.85% of the total population, while 644.68 million people completed booster immunizations.

According to the pandemic situation, the needs of prevention and control, and the progress of vaccine development and use in China, starting from October 2021, the Joint Prevention and Control Mechanism of the State Council launched the work for COVID-19 vaccine homologous booster immunizations. That is to say, the same vaccine used for the full course of vaccination will also be used for the booster shot. We call this the "homologous booster." Recently, we have made some additional supplements and improvements to the COVID-19 vaccine booster immunization strategy, adding sequential booster immunization. The sequential booster immunization means that the booster immunization can choose a vaccine different from the original basic immunization. What is currently approved is that on the basis of inactivated vaccines, the vaccination can be boosted with adenovirus vector vaccines, or it can be boosted with recombinant protein vaccines. Next, we will probably add more options based on the progress of vaccine research and development in China.

According to the current policy, all people who meet the requirements for booster immunizations can receive booster immunizations six months after the full course of basic immunization. The booster immunization includes homologous or sequential immunization. For eligible populations, choosing one immunization option is enough for each person, be it either homologous or sequential vaccination. You all are also concerned about the differences between homologous and sequential vaccinations. Some relevant studies have been carried out at home and abroad on this issue, and some reports have been published. These studies show that both the homologous booster and sequential booster can significantly improve the immune protective efficacy, which is very clear. I just said that more than 600 million doses of booster immunization have been completed in China. Since the sequential booster immunization was carried out a little later, of the more than 600 million doses, most are homologous. However, from the adverse reaction data we have collected, there is no significant difference in adverse reactions between the two methods, so please feel free to vaccinate. We hope that people who meet the requirements for booster immunization, especially the elderly and those with underlying diseases, can take the initiative to vaccinate and get vaccinated in a timely manner so as to increase the protection of their own health and contribute to the pandemic prevention of the whole society. Thank you.

Red Star News:

The NHC has released the ninth version of the COVID-19 diagnosis and treatment guidelines, making important adjustments in the management of people with mild COVID-19 infections and the cycle threshold value of a nucleic acid test. What are the reasons for the adjustments? Does it mean that prevention and control measures have been relaxed? Is it necessary for all localities to continue to implement strict prevention and control measures?

Jiao Yahui:

Thanks for your questions. First, I would like to make it clear that revisions to China's COVID-19 diagnosis and treatment guidelines do not mean relaxed prevention and control measures. All localities should continue to carry out COVID-19 prevention and control work with caution constantly. The revisions are based on our country's anti-epidemic experience over the past two years, especially the observation and research of clinical cases infected with the Delta and Omicron variants. The main adjustments involve the detection and reporting of cases and the adding of antigen testing to form the "antigen test plus nucleic acid test" tactic. In addition, we proposed classified treatment. We have also made adjustments to antiviral treatment, TCM treatment, criteria for being released from isolation and discharged from hospitals, and management following discharge. The adjustments are made in accordance with General Secretary Xi Jinping's important instructions to make the COVID-19 response more scientific and targeted, and achieve maximum effect in prevention and control with minimum cost.

I would like to give a detailed explanation on changes to the admission of cases. In terms of classified treatment, people with mild COVID-19 infections will be placed at centralized isolation facilities rather than in designated hospitals, according to the latest version of the guidelines. Mild, severe, and critical cases, as well as cases with other high risks, will be admitted to designated hospitals. In other words, asymptomatic and mild cases will be placed in centralized isolation. Here I want to clarify that centralized isolation facilities for asymptomatic and mild cases must be strictly separated from those designated for close contacts and overseas travelers because mild and asymptomatic cases have positive nucleic acid test results, while close contracts usually have negative nucleic acid test results, so isolation facilities for them must be strictly separated. 

In response to the pandemic, some regions use special isolation facilities, such as Shandong province and Jilin province, where temporary treatment centers have been built. That doesn't mean that people with mild COVID-19 infections and asymptomatic cases placed in centralized isolation will go uncared. The revised guidelines require that the centralized isolation facilities where these cases are treated should also be staffed with medical personnel. What are the duties of those medical personnel? On the one hand, they should provide therapies to the mild cases, such as cases with symptoms of nasal obstruction, a cough, and fever. On the other hand, they should monitor the patients' conditions. Based on our practice, about 95 percent of patients in the latest outbreak are asymptomatic or only show mild symptoms. Although there are fewer treatment and intervention measures for them, it does not mean that we will leave them unattended. If their condition worsens, they will be timely transferred to designated hospitals for further treatment. 

The other thing that people are concerned about is the CT (cycle threshold) value — part of the discharge criteria. In the ninth version of the diagnosis and treatment plan, we proposed that patients can be discharged from hospitals or centralized isolation when their two consecutive CT values are both 35 or above with at least 24 hours between the two tests and that the COVID-19 symptoms relieved, with some hospitalization-required symptoms gone. The adjustment is also based on our practical research. Research showed that the live virus cannot be isolated from samples of convalescent patients whose CT value is 35 and above, meaning that these patients are no longer infectious. Therefore, such patients can be discharged from hospitals and return home. These adjustments have been made to improve the utilization efficiency of medical resources. For one thing, we can concentrate in-need cases in hospitals to ensure effective medical treatment. For another, it also leaves us more medical resources to provide normal medical services for the public. The adjustment has fully embodied implementing the principle of putting the people and their lives first.  

As for post-discharge management, we changed the previous 14-day isolation into seven-day health monitoring at home. Thus, the adjustments made to the latest diagnosis and treatment plan does not mean the pandemic prevention and control policies have been relaxed. Instead, they are more scientific, precise, and targeted. Thank you.

Bloomberg News:

I have two questions. One of the biggest impacts the dynamic zero-COVID policy has on the economy is that factories have to shut down and people have to quarantine for long periods. What can the government do to reduce that impact? Do you have any plans to introduce foreign vaccines or other foreign medicines to aid with the treatment of coronavirus? Thank you. 

Wang Hesheng:

I'll answer these questions. First, thanks for your attention. Since the outbreak of COVID-19, the NHC and the National Administration of Disease Prevention and Control have resolutely implemented the decisions and arrangements made by the CPC Central Committee and the State Council, actively guided the localities to strengthen scientific prevention and control to take targeted measures, and firmly adhered to the overall strategy of preventing case imports and domestic resurgence as well as the general dynamic zero-COVID policy. With our continuously deepening understanding of how the novel coronavirus behaves, our anti-pandemic policies and measures have been consistently adjusted and improved in accordance with the changing epidemic situation and actual needs of the prevention and control work so as to make the work more scientific and accurate.  

Since the anti-epidemic work entered the dynamic zero-COVID stage of targeted prevention and control across the whole chain, we have focused on early detection of sporadic cases to enhance the capacity of epidemic prevention and control and early spotting. Our work is mainly carried out in the following aspects:  

First is to highlight prevention and improve the ability to prevent case import. We issued the Notice on Strengthening COVID-19 Prevention and Control in Port Cities and put forward clear requirements from multiple aspects to further rationalize mechanisms and clarify responsibilities. The aspects include improving the pandemic prevention and control mechanism in port cities; ameliorating the epidemic monitoring and early warning system; strengthening land and maritime border control; ensuring personal protection and closed-loop management of personnel in high-risk positions; enhancing prevention and control of each link of the cold chain; standardizing the monitoring, disinfection, and disposal of high-risk articles and environment at ports; increasing the capability of epidemic prevention, control, and handling; and securing people's livelihood. 

Second is to emphasize early detection. We have further ensured that all those in need are tested, and made efforts to increase the frequency of nucleic acid tests and health monitoring of personnel working in port-of-entry areas, centralized isolation sites, designated medical institutions, and other key areas. We have fully leveraged the sentinel role of fever clinics, implemented the first consultation responsibility system, and regulated the reception and treatment procedures for patients with fever in individual clinics and community-level medical institutions. We have set up multi-channel and multi-spot trigger mechanisms in pharmacies, educational institutions, and community-level medical institutions, among others.  

Third is to underline real results and upgrade the preparedness for dealing with the pandemic. All localities have been required to establish and maintain an emergency response command mechanism during both normal and emergency periods and apply the horizontal management model. At the national level, we have set up 16 national expert teams of epidemiological investigation responsible for eight regions nationwide. All localities have been required to set up sufficient epidemiological investigation teams composed of various departments of health, disease control, public security, and industry and information technology, and carry out exercises and training to effectively improve the epidemiological investigation capacity. We have also demanded that local governments effectively enhance the reserve capacity of nucleic acid test teams and coordinate and allocate resources to ensure that the nucleic acid test tasks are fully completed within a specified time.  

Fourth is to accentuate speed and boost early handling of the pandemic. In the "golden 24 hours" after the detection of positive cases, while the positive samples in the preliminary screening are retested, emergency preparedness including epidemiological investigation, nucleic acid test, quarantine site arrangement, and community management and control will be simultaneously activated in accordance with the principle of reporting any positive case immediately, conducting investigation immediately after receiving the report, and controlling first before screening. We have ensured that multiple tasks of command system construction, nucleic acid test, isolation, medical treatment, and press release can be carried out in parallel.  

Fifth is to underscore "strictness" by intensifying installation and management over designated hospitals. We have strengthened prevention and control over hospital infections, and reinforced installation and management over fever clinics, making sure that all hardware facilities meet the requirements for the prevention and control of respiratory infectious diseases. We have strictly implemented closed-loop management over the staff working at those fever clinics which receive high-risk groups, including fever patients from overseas and from medium-high risk areas and centralized quarantine locations in China. We have strengthened installation and management over designated hospitals, reinforced equipment and training over the prevention and control personnel against hospital infections, intensified screenings of medical workers before entering isolation wards, and earnestly put every prevention and control measure against hospital infections in place.

Next, the NHC and the National Administration of Disease Control and Prevention will jointly work with other relevant departments to conduct training and drills on a regular basis to improve practical emergency response abilities and multi-department collaboration abilities, and intensify risk monitoring and screening at key links. We have to prevent misinterpretation of policies, one-size-fits-all solutions, excessive implementation of policies, and other problems at local level while ensuring the full implementation of all measures, in a bid to create a sound environment to ensure people's wellbeing and promote economic and social development. 

Regarding the question raised by this journalist on whether more foreign-developed vaccines and medicines will be introduced, I suggest you consult relevant departments. Thank you.

China Daily:

As Ms. Jiao mentioned, according to the ninth edition of China's COVID-19 diagnosis and treatment guidelines, recovered patients only need to monitor their condition at home for seven days after being discharged from quarantine locations or hospital, instead of conducting health monitoring and 14-day quarantine after being discharged from hospital. Could you please tell us the reasons for those modifications?

Jiao Yahui:

Thank you for your question. As we mentioned before, relevant studies have shown that the live virus can not be separated from samples if a patient's cycle threshold value is greater than or equal to 35. Given that, we have made such a modification. First, it is no longer contagious when the cycle threshold value is greater than or equal to 35. On the other hand, given on our study on reconfirmed positive cases in China, the epidemiological survey has demonstrated that those cases had not caused any transmissions or infections. Therefore, patients can be discharged from hospital when their cycle threshold values reach 35.

Second, the previous requirement that patients should spend 14 days in centralized quarantine or go to rehabilitation hospitals was based on our general experience. Now that we have proved it's non-infectious, it's reasonable to adopt at-home isolation and monitoring rather than centralized quarantine. Another adjustment is the change from 14 days to seven days. According to hospitals' observation on recovered patients infected with the Delta variant as well as those infected with the Omicron variant, their body functions can recover within seven days basically; thus, the time has been shortened from 14 days to seven days. Given our observations, research, and analysis of clinically diagnosed cases, we cut the time and adopted at-home isolation instead of centralized quarantine. Notably, in spite of staying at home, the patients still have to strictly implement health monitoring. Thank you.

New York Times:

Other countries and territories have found the elderly are the most vulnerable, and the only reliable way to protect them is through vaccination. What percentage of people in China who are 80 or older have had one vaccine, or have had two vaccines, or have had three vaccines for the coronavirus? And what are you doing to encourage these elderly people to be vaccinated fully if they have not already received two or three vaccines? Thank you.

Zeng Yixin:

It's a problem of great importance. The Joint Prevention and Control Mechanism of the State Council has always attached great significance to promoting vaccination among the elderly population in China by repeatedly making arrangements and plans. Additionally, the local departments have actively taken multiple measures to boost the vaccination rate among the elderly. You only mentioned people older than 80; I will introduce the general vaccination situation of people who are 60 or older. As of March 17, for people aged 60 to 69, the first dose rate, the full vaccination rate, and the booster vaccination rate hit 88.8%, 86.6%, and 56.4%, respectively. Among people aged 70 to 79, the numbers are 86.1%, 81.7%, and 48.4%, respectively. As for the group who are 80 or older, which you are mostly concerned, those three figures are 58.8%, 50.7%, and 19.7%, respectively. Generally speaking, of the 264 million people aged 60 or older, 211.76 million have been fully vaccinated, which means there are still 52 million people who have not received full vaccination. Among those, those aged 80 or older account for the largest proportion as their full vaccination rate and booster vaccination rate are a mere 50.7% and 19.7%, respectively. Both are relatively low percentages. As for the elderly, full vaccination and booster vaccination are of great importance, especially for people aged 80 or older. Therefore, we will step up efforts to vigorously promote vaccination among the elderly. 

The immune system of the seniors is weaker than that of the young, and most of them have various underlying medical conditions. Once infected with the coronavirus, the risk of severe illness and death is much higher than that of the young. As we all know, there have been many clusters in China since last year, but very few of the infected became seriously ill. In particular, in the cases caused by the Omicron variant, the proportion of severe cases is even fewer. However, in the Yangzhou cluster outbreak that was caused by the Delta variant in August last year, the elderly cases accounted for a high proportion and thus more severe cases were found. There was a total of 1,388 cases in Yangzhou, of which 67 severe cases were among the elderly over 60 years old. Because there are many elderly people, the incidence of severe cases is also relatively high. Among the 1,388 cases, the proportion of people who had a complete course of vaccines was 38%. Among the 67 severe cases, 65 cases were not vaccinated or did not complete the full course of vaccination. In the recent Hong Kong outbreak, it is reported that the mortality rate of vaccinated people is 0.04%, and the mortality rate of those who have not been vaccinated or not fully vaccinated is 1.25%, which is a dramatic difference of dozens of times. Also, in the Hong Kong outbreak, 90% of those who died were elderly people.

From these two examples, two conclusions can be drawn. The first is that vaccines are highly effective at preventing severe illness and death. In Yangzhou, the vaccines used were mainly produced on the mainland. In Hong Kong, mRNA vaccines and inactivated vaccines were mainly used, accounting for about 60% and 40%, respectively. The second is that, the elderly and people with underlying diseases are the most in need of protection and vaccination. I think two conclusions can be drawn from these two examples.

Therefore, in order to further increase vaccination rate among the elderly, the next step is to scale up publicity and mobilization in two aspects. For one thing, we should raise their awareness. We must not only emphasize the principle of vaccination on a voluntary basis, but also emphasize the sense of responsibility. We often say that one should hold the primary responsibility for his or her own health. In the context of the pandemic, vaccination is not only to protect oneself, but also to protect the family, and to contribute to society. For another, we must also actively respond to the concerns of the elderly. Why do the elderly have so many concerns and worries? Why do they lack the motivation to receive vaccinations? It is necessary to figure out the causes and respond to their concerns and questions. For example, how about the safety of vaccines, which is something the elderly are concerned about. What are the side effects, and how is vaccine efficacy? How about the protective effect on the elderly? Will vaccination aggravate underlying diseases? Given that many elderly people have underlying diseases, will they get worse after being vaccinated? There are also elderly people who think that they don't leave their homes frequently and so wonder if it's necessary to get vaccinated? Only when we bring clarity to their unease can we encourage them to get vaccinated. Therefore, relevant units and experts must attach great importance to informing the public about data and relevant information. The media should spread relevant information widely in a way that the elderly like to see. In these ways, the whole of society works together to form a favorable environment that is conducive to increasing the vaccination rate among the elderly.

Second, we should give full play to the role of local relevant departments. Grid management systems can be employed to enable the elderly to get vaccinated. Relevant departments can also actively mobilize key groups such as the elderly and key places such as nursing homes so as to increase the vaccination rate among the elderly.

Third, we should ensure the safety of the elderly getting vaccinated. The vaccination unit should arrange for medical staff who are familiar with the physical condition and the diagnosis and treatment of diseases of the elderly to stand by to provide health care. Before an elderly person gets vaccinated, the medical staff should carry out health assessments on them. After the vaccination, the healthcare professionals should carry out surveillance of the vaccine recipients for signs of adverse events and be particularly prepared for an emergency. Because the elderly may have underlying health conditions, we must ensure prompt and proper medical treatment in case of emergencies.

Fourth, more convenient measures should be taken to facilitate vaccination among the elderly. Mobile vaccination vehicles and other equipment can be used to set up temporary vaccination sites to shorten their round-trip route. Housecalls can also be made for those having difficulty getting about, and more green channels can be set up to shorten the waiting time for old people. We should also make flexible arrangements at vaccination spots according to their demands. By implementing such measures, we believe that the vaccination rate among the elderly is sure to rise soon. Thank you!

Thecover.cn:

According to a document recently released by the State Council joint epidemic prevention and control mechanism, residents can buy antigen COVID-19 test kits themselves as an additional test method to nucleic acid tests. Do the self-purchased test kits need to be put on record? If a positive test result is not reported, are there any corresponding regulatory measures?

Jiao Yahui:

Thank you for your questions. First of all, residents buying antigen COVID-19 test kits do not need to be put on record. As stipulated in the antigen testing plan, anyone who tests positive using the self-test kits should report the results to their community, and the community will arrange a special vehicle to transport the case to a medical institution for further nucleic acid testing for confirmation. The whole process is a closed loop. The State Council joint prevention and control mechanism has made specific regulations for all localities to make detailed arrangements for the discovery, report and closed-loop management of cases. Provinces have been required to clarify their detailed plans. 

Just now, you mentioned whether the reporting of self-tested positive results needs supervision or not. I'd like to remind the general public: on the one hand, as Mr. Zeng has explained, everyone is the first person responsible for their own health as well as the health of their families. On the other hand, the pandemic prevention and control regulations stress responsibilities from four aspects, of which one is personal responsibility. Therefore, we call for timely reporting if a positive result is found through the use of a self-testing kit. In addition, the Law on Prevention and Treatment of Infectious Diseases and other laws and regulations also clearly stipulate that citizens have the responsibility and obligation to report a positive case, and if they violate the rules and cause the spread of infectious disease, they should shoulder the corresponding legal liability.

In our practice of epidemic prevention and control, we can see that some violators in many places have been investigated for legal liability. So, I'd like to remind the public that if they test positive, they should first report it according to the local requirements.

Shou Xiaoli:

Due to time constraints, we'll take one last question.

China News Service:

Recently, China has seen frequent flare-ups of COVID-19 cases in multiple places, with a large swathe of areas affected. Locally transmitted cases and cluster infections have been reported in a number of provinces. Given the circumstances, what suggestions do you have for strengthening personal precautions? Thank you.

Wang Hesheng:

Thank you. I'm glad to take this question. In my opinion, we need to remind people to strengthen personal precautions throughout every stage of COVID-19 response, not just when the epidemic situation is severe. We need to step up self-protection both when there is no significant resurgence and amid routine epidemic prevention and control. I would like to offer a few suggestions. 

First, I would like to continue with the issue of vaccination for senior citizens that Mr. Zeng mentioned earlier. I believe that boosting vaccination and strengthening personal precautions should be the top priority. According to classic theories of infectious disease, controlling the sources of infection, cutting off transmission routes, and protecting vulnerable groups are the top three methods of prevention and control. In this sense, vaccines are the most effective ways to protect vulnerable groups. Vaccination has seen remarkable results based on our practices, especially among senior citizens. The COVID-19 resurgence in Hong Kong is a poignant lesson for us, and the situation proves that a low vaccination rate among the elderly will lead to a high mortality rate. A question raised just now also mentioned that some senior citizens didn't get vaccinated because they thought they rarely went out, which was inconvenient in nursing homes.

Nevertheless, please remember that the vaccinated and unvaccinated will face utterly different consequences once infected, and what happened in Hong Kong is an example. Therefore, while we all treat the elderly with respect and strive to be role models in this regard, we must encourage our senior family members to get vaccinated because they most need personal precautions. China has provided extraordinary vaccines and inoculation services, and every sector is proactively working to implement the work. As far as I know, China's civil affairs departments have made plenty of effort to step up collective prevention and control in nursing homes. This is because many senior citizens also understand the importance of vaccination and are actively applying for inoculation. Therefore, departments associated with vaccines and civil affairs government bodies should work closely together and provide good services for these senior citizens following relevant requirements. All of these are my first-hand experience. We need first of all to make better use of vaccines to strengthen epidemic prevention.

Second, we need to maintain good personal hygiene habits. We have gained good experience after this long epidemic. When staying at home, we need to enhance ventilation and disinfection and maintain personal hygiene. When going outdoors, we must wear face masks, strengthen personal precautions, and keep our hands clean. We also need to practice social distancing and avoid crowded places, gatherings, and group dining activities.

Third, we should do our part in implementing the requirements of COVID-19 response. We should proactively assist in the epidemiological investigation and nucleic acid tests, especially in public spaces' prevention and control requirements. There are many anti-virus requirements in public areas, and we must refrain from acting willfully, playing petty tricks, or refusing to scan health QR codes and follow relevant rules. Cooperating with anti-epidemic work is essential, and it is good to all of us.

In addition, we need to pay close attention to our health status. We must seek medical help and report to the community promptly in case of fever and dry cough. Let's work together to establish a solid society-wide defense line. Thank you.

Shou Xiaoli:

Thank you to all three speakers and friends from the media. Today's press conference is at this moment concluded. Goodbye.

Translated and edited by Zhang Liying, Li Huiru, Li Xiao, Zhang Rui, Cui Can, Wang Wei, Liu Sitong, Yang Xi, Zhang Junmian, Xu Xiaoxuan, Huang Shan, Zhu Bochen, Liu Qiang, Chen Xia, Qin Qi, Yuan Fang, Zhang Tingting, Wang Yiming, David Ball, Jay Birbeck and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.